CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
COURT
Appeal No. : E/919/2010-DB
Arising out of : OIO No.18/Commissioner/2010, dt. 27.04.2010.
Passed by : Commissioner,
Central Excise, Customs & Service Tax, Rajkot.
For approval and signature :
Mr. M.V. Ravindran, Hon ble Member (Judicial)
Mr. H.K. Thakur, Hon ble Member (Technical)
1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No
2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes
3Whether their Lordships wish to see the fair copy of the Order? Seen
4 Whether Order is to be circulated to the Departmental authorities? Yes
Appellant (s) : M/s. Senor Metals P. Ltd.
Represented by : Shri P.V. Sheth (Advocate)
Respondent (s) : C.C.E. & S.T. Rajkot
Represented by : Shri S.K. Mall (A.R.)
CORAM :
Mr. M.V. Ravindran, Hon ble Member (Judicial)
Mr. H.K. Thakur, Hon ble Member (Technical)
Date of Hearing: 01.07.2014
Date of Decision: 24.07.2014
ORDER No. A/11421/2014, dt. 24.07.2014
Per: Mr. H.K. Thakur;
This appeal has been filed by the appellant with respect to OIO No.18/Commissioner/2010, dt. 27.04.2010 passed by the Commissioner of Central Excise and Customs, Rajkot. Appellant is engaged in the manufacturing of goods falling under Chapter 26 and 27 of the Central Excise Tariff Act, 1985. In addition to manufacturing their own products the appellant is also undertaking job work of other parties who are availing the benefit of SSI exemption notification no.8/2003-CE, dt. 01.03.2003. For the job work activities brass scrap is received by the appellant under challans as per the notification no.83/1994-CE, dt. 11.04.1994 and notification no.84/1994-CE, dt. 11.04.1994. The required intimations regarding job work being done are also filed with the jurisdictional central excise authorities by the persons getting the job work done from the appellants.
2. Shri P.B. Sheth (Advocate) appearing on behalf of the appellant argued that under notification no.83/1994-CE job worker will not be required to pay any central excise duty with respect to specified goods manufactured by the appellant when such goods are manufactured from the raw materials supplied and the finished specified goods are also sent back to the suppliers of the raw material. Ld. Advocate argued that as per the undertakings given by the suppliers of the raw materials the entire duty liability of the goods manufactured by the appellant is required to be discharged by the supplier of the raw material and no duty can be demanded from the appellant. Another argument taken by the Ld. Advocate was that the extended period of limitations cannot be invoked against appellant as there is no suppression / misstatement with intention to evade payment of duty as all the intimations / declarations were filed by the appellant and raw material suppliers from time to time. That the raw materials received and the finished specified goods were cleared under proper challans and none of the billets / rods, coming into existence in the manufacturing activity of specified goods, are cleared clandestinely by the appellant. It was thus the case of the appellant that the entire demand is time barred as the period involved is from 2003-04 to 2005-06 and the show cause notice was issued on 24.04.2008. Ld. Advocate made the bench go through various intimations filed with the jurisdictional central excise authorities by the raw material suppliers and also the challans under which the raw materials were received and the finished specified goods supplied back to the raw material suppliers. It was the appellant s case that the required periodical returns were filed with the jurisdictional central excise authorities by the appellant and as per CBEC Excise Manual of supplementary instructions departmental officers are required to scrutinize the returns. He relied upon following case laws in support of his argument that the entire demand is time barred:
(i) Automative Stampings & Assemblies Ltd. Vs. CCE, Vadodara 2009 (247) ELT 712 (Tri. Ahmd.),
(ii) CCE, Mumbai-IV Vs. Raptakos Brett & Co. Ltd. 2006 (194) ELT 101 (Tri. Mumbai),
(iii) Nestle India Ltd. Vs. CCE, Chandigarh 2009 (235) ELT 577 (SC),
(iv) Amrit Foods Vs. CCE, U.P. 2005 (190) ELT 433 (SC),
3. Shri S.K. Mall (A.R.) appearing on behalf of the revenue argued that the billets / bars, which come into existence in the factory premises of the appellant, are not specified goods under notification no.8/2003-CE, dt. 01.03.2003 and that the benefit of exemption notifications no.83/1994-CE, dt. 11.04.1994 and 84/1994-CE, dt. 11.04.1994 will not be available to manufacturing goods that come into existence in the appellant s factory premises. It was revenue s case that the undertaking given by the raw material suppliers will not be applicable to the non-specified goods that come into existence in the appellant s factory premises. For this argument he relies upon the following case laws:
(i) Astron Engineers (I) Pvt. Ltd. Vs. CCE, Pune-III 2013-TIOL-1274-CESTAT-MUM,
(ii) Super Polyfabriks Ltd. Vs. CCE, Chandigarh 1994 (114) ELT 1019 (Tribunal).
4. On the issue of time bar, Ld. A.R. argued that the required declarations filed by the raw material suppliers only specified the raw materials supplied and the finished specified goods manufactured by the appellant. That against the space in the declaration forms made for manufacturing process of the job work only conversion into the finished specified goods is mentioned or in certain intimations this column of manufacturing process is kept blank. Similarly, Ld. A.R. argued that in the challans prepared by the raw material suppliers there is no indication about the process of manufacturing and whether non-specified billets / rods also come into existence at the factory premises of the job worker. It was strongly argued by the Ld. A.R. that the extended period is invokable as no parameters of non-specified goods; mentioned in annexure to notification no.8/2003-CE dt. 01.03.2003, as amended by notification no.8/2006-CE dt. 01.03.2006; are specified in the declarations filed by the raw material suppliers or the challans prepared for movement of finished specified goods.
5. Heard both sides and perused the case records. The first issue which is required to be deliberated upon whether appellant is required to discharge duty liability on certain intermediate goods which come into existence in their factory premises which are not specified goods under notification no.8/2003-CE, dt. 01.03.2003 as amended by notification no.8/2006-CE, dt. 01.03.2006. It is observed from Sr. No.(xxiv) of annexure to notification no.8/2003-CE, dt. 01.03.2003 and Sr. No.(xxxii) to (xxiv) of annexure to notification no.8/2006-CE, dt. 01.03.2006 that certain categories of copper articles are not eligible to small scale exemption. The opening paragraph of the notification nos.83/1994-CE and 84/1994-CE, both dtd. 11.04.1994 grants exemption to the job worker with respect to specified goods of small scale exemption notification, sent back to the raw material suppliers who are availing SSI exemption. Certain procedures have been prescribed by which the raw material suppliers have to give an undertaking that the specified goods will be returned back to their premises and such specified goods received from the job worker will be used in the factory of such suppliers in or in relation to the manufacture of specified goods which are exempted under small scale exemption notification. The argument taken by the appellant that for any duty liability on the intermediate goods, that come into the existence in appellant s factory, lies with the raw material supplier is not correct because as per the wording of the undertakings only duty liability with respect to the finished specified goods is required to be discharged by the raw material suppliers. The duty liability on the manufactured goods, which come into existence and are captively consumed for which exemption is not available under SSI exemption no.1/93-CE, is required to discharged the appellant / job worker. This view has already been upheld by the Cestat Delhi in the case of Super Polyfabriks Ltd. Vs. CCE, Chandigarh (supra). Paragraph nos. 2, 3 and 8 of the judgment are relevant and are reproduced below:
2. Brief facts are: M/s. Super Poly Fabrics Ltd. as? well as M/s. Fine Fabricators are manufacturers of HDPE bags and sacks falling under Chapter Heading 39 of the Central Excise Tariff Act, 1985. They paid Central Excise duty at the time of clearance of bags and sacks. They also availed the benefit of SSI exemption Notification No. 1/93.
3. According to the Appellants, M/s. Fine? Fabricators (FF for short) send HDPE granules to M/s. Super Poly Fabrics Ltd. (SPF for short) for the manufacture of fabrics on job work basis in terms of Notification No. 83/94 and 84/94-CE as per declaration filed by them. SPF in turn convert the granules into fabrics and send them back to FF who thereafter manufacture sacks out of the said fabrics. According to the appellants, during the manufacture of sacks, strips emerged at the intermediate stage as an inevitable consequence.
4.
5.
6.
7.
8. We have considered the submissions. We are unable to accept the contention of the appellants. The Tribunal s majority decision in Dukart and Company case (supra) would not apply to the facts of the case before us. That decision primarily dealt with the aspect of computation of aggregate value of certain specified goods captively consumed used for further manufacture of specified goods within the factory of production of inputs. The question of clearances of goods by job worker did not arise in that case. In the facts and circumstances of the instant case, the question relates to the availability of slab exemption to job workers where certain intermediate goods are manufactured during the process of job work. Further, it is also not permissible to extend the ratio of a decision interpreting one notification to another notification, since the objects of the two notifications would differ widely. We do not also find any infirmity in the line of reasoning followed in the impugned order relating to the limited scope of the definition of job work under Notification Nos. 83/94 and 84/94. We therefore, confirm the duty demand made on M/s. Super Poly Fabrics.
6. A similar view has also been taken with respect to brass bars, which come into existence in the factory premises of the job worker, by Cestat Mumbai in the case of Astron Engineers (I) Pvt. Ltd. Vs. CCE, Pune-III (supra). In view of the above observations and the case laws relied upon by the revenue duty liability with respect to intermediate goods which come into existence, which are not specified in annexure to the small scale exemption notification, as amended, lies with the appellant and is required to be confirmed on merits.
7. So far as time barred nature of the demand is concerned, Ld. Advocate appearing on behalf of the appellant argued that the required intimations / clarifications were filed by the suppliers of raw material with the jurisdictional central excise authorities. The inputs received and the specified goods were duly cleared under prescribed challans, therefore, extended period is not invokable when such clearances of job worker are also shown in the periodical returns filed with the department. It is observed from the declarations filed by the raw material suppliers that the column in such declarations, pertaining to manufacturing process of the job work, are either kept blank by the raw material supplier or the process simply says that raw materials are converted into specified goods of notification no.1/93-CE. Similarly the challans maintained by the appellants and the raw material suppliers also give no indication of the weight or description of the intermediate billets / rods which come into existence. It is pertinent to note that certain manufacturing products mentioned in Sr. No.xxiv of annexure to notification no.8/2003-CE, dt. 01.03.2003 and Sr. No.(xxxii) to (xxxiv) of annexure to notification no.8/2006-CE, dt. 01.03.2006) give specifications of certain manufacturing goods which are not to be considered as specified goods for availment of SSI exemption. In the absence of any such details given / available in the declarations / challans by the raw material suppliers and in the absence of any such specifications mentioned in the periodical returns filed by the appellants it cannot be said that there is no suppression / misstatement. Being in the manufacturing and job work of goods of Chapter 74 of the Central Excise Tariff Act, 1985 it has to be held that appellant was aware that brass billets / rods come into existence and that brass billets weighing upto 5 Kgs. and certain other goods of copper are not specified goods. In view of the above, the extended period under Section 11A of the Central Excise Act, 1944 is invokable in the present proceedings. In view of the above observations on merits as well as on time bar, the case goes against the assessee and in favour of the revenue and accordingly appeal filed by the appellant is required to be dismissed.
8. Appeal filed by the appellant is dismissed.
(Pronounced on 24.07.2014)
(M.V. Ravindran) (H.K. Thakur)
Member (Judicial) Member (Technical)
AVSP
1
West Zonal Bench, Ahmedabad
COURT
Appeal No. : E/919/2010-DB
Arising out of : OIO No.18/Commissioner/2010, dt. 27.04.2010.
Passed by : Commissioner,
Central Excise, Customs & Service Tax, Rajkot.
For approval and signature :
Mr. M.V. Ravindran, Hon ble Member (Judicial)
Mr. H.K. Thakur, Hon ble Member (Technical)
1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No
2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes
3Whether their Lordships wish to see the fair copy of the Order? Seen
4 Whether Order is to be circulated to the Departmental authorities? Yes
Appellant (s) : M/s. Senor Metals P. Ltd.
Represented by : Shri P.V. Sheth (Advocate)
Respondent (s) : C.C.E. & S.T. Rajkot
Represented by : Shri S.K. Mall (A.R.)
CORAM :
Mr. M.V. Ravindran, Hon ble Member (Judicial)
Mr. H.K. Thakur, Hon ble Member (Technical)
Date of Hearing: 01.07.2014
Date of Decision: 24.07.2014
ORDER No. A/11421/2014, dt. 24.07.2014
Per: Mr. H.K. Thakur;
This appeal has been filed by the appellant with respect to OIO No.18/Commissioner/2010, dt. 27.04.2010 passed by the Commissioner of Central Excise and Customs, Rajkot. Appellant is engaged in the manufacturing of goods falling under Chapter 26 and 27 of the Central Excise Tariff Act, 1985. In addition to manufacturing their own products the appellant is also undertaking job work of other parties who are availing the benefit of SSI exemption notification no.8/2003-CE, dt. 01.03.2003. For the job work activities brass scrap is received by the appellant under challans as per the notification no.83/1994-CE, dt. 11.04.1994 and notification no.84/1994-CE, dt. 11.04.1994. The required intimations regarding job work being done are also filed with the jurisdictional central excise authorities by the persons getting the job work done from the appellants.
2. Shri P.B. Sheth (Advocate) appearing on behalf of the appellant argued that under notification no.83/1994-CE job worker will not be required to pay any central excise duty with respect to specified goods manufactured by the appellant when such goods are manufactured from the raw materials supplied and the finished specified goods are also sent back to the suppliers of the raw material. Ld. Advocate argued that as per the undertakings given by the suppliers of the raw materials the entire duty liability of the goods manufactured by the appellant is required to be discharged by the supplier of the raw material and no duty can be demanded from the appellant. Another argument taken by the Ld. Advocate was that the extended period of limitations cannot be invoked against appellant as there is no suppression / misstatement with intention to evade payment of duty as all the intimations / declarations were filed by the appellant and raw material suppliers from time to time. That the raw materials received and the finished specified goods were cleared under proper challans and none of the billets / rods, coming into existence in the manufacturing activity of specified goods, are cleared clandestinely by the appellant. It was thus the case of the appellant that the entire demand is time barred as the period involved is from 2003-04 to 2005-06 and the show cause notice was issued on 24.04.2008. Ld. Advocate made the bench go through various intimations filed with the jurisdictional central excise authorities by the raw material suppliers and also the challans under which the raw materials were received and the finished specified goods supplied back to the raw material suppliers. It was the appellant s case that the required periodical returns were filed with the jurisdictional central excise authorities by the appellant and as per CBEC Excise Manual of supplementary instructions departmental officers are required to scrutinize the returns. He relied upon following case laws in support of his argument that the entire demand is time barred:
(i) Automative Stampings & Assemblies Ltd. Vs. CCE, Vadodara 2009 (247) ELT 712 (Tri. Ahmd.),
(ii) CCE, Mumbai-IV Vs. Raptakos Brett & Co. Ltd. 2006 (194) ELT 101 (Tri. Mumbai),
(iii) Nestle India Ltd. Vs. CCE, Chandigarh 2009 (235) ELT 577 (SC),
(iv) Amrit Foods Vs. CCE, U.P. 2005 (190) ELT 433 (SC),
3. Shri S.K. Mall (A.R.) appearing on behalf of the revenue argued that the billets / bars, which come into existence in the factory premises of the appellant, are not specified goods under notification no.8/2003-CE, dt. 01.03.2003 and that the benefit of exemption notifications no.83/1994-CE, dt. 11.04.1994 and 84/1994-CE, dt. 11.04.1994 will not be available to manufacturing goods that come into existence in the appellant s factory premises. It was revenue s case that the undertaking given by the raw material suppliers will not be applicable to the non-specified goods that come into existence in the appellant s factory premises. For this argument he relies upon the following case laws:
(i) Astron Engineers (I) Pvt. Ltd. Vs. CCE, Pune-III 2013-TIOL-1274-CESTAT-MUM,
(ii) Super Polyfabriks Ltd. Vs. CCE, Chandigarh 1994 (114) ELT 1019 (Tribunal).
4. On the issue of time bar, Ld. A.R. argued that the required declarations filed by the raw material suppliers only specified the raw materials supplied and the finished specified goods manufactured by the appellant. That against the space in the declaration forms made for manufacturing process of the job work only conversion into the finished specified goods is mentioned or in certain intimations this column of manufacturing process is kept blank. Similarly, Ld. A.R. argued that in the challans prepared by the raw material suppliers there is no indication about the process of manufacturing and whether non-specified billets / rods also come into existence at the factory premises of the job worker. It was strongly argued by the Ld. A.R. that the extended period is invokable as no parameters of non-specified goods; mentioned in annexure to notification no.8/2003-CE dt. 01.03.2003, as amended by notification no.8/2006-CE dt. 01.03.2006; are specified in the declarations filed by the raw material suppliers or the challans prepared for movement of finished specified goods.
5. Heard both sides and perused the case records. The first issue which is required to be deliberated upon whether appellant is required to discharge duty liability on certain intermediate goods which come into existence in their factory premises which are not specified goods under notification no.8/2003-CE, dt. 01.03.2003 as amended by notification no.8/2006-CE, dt. 01.03.2006. It is observed from Sr. No.(xxiv) of annexure to notification no.8/2003-CE, dt. 01.03.2003 and Sr. No.(xxxii) to (xxiv) of annexure to notification no.8/2006-CE, dt. 01.03.2006 that certain categories of copper articles are not eligible to small scale exemption. The opening paragraph of the notification nos.83/1994-CE and 84/1994-CE, both dtd. 11.04.1994 grants exemption to the job worker with respect to specified goods of small scale exemption notification, sent back to the raw material suppliers who are availing SSI exemption. Certain procedures have been prescribed by which the raw material suppliers have to give an undertaking that the specified goods will be returned back to their premises and such specified goods received from the job worker will be used in the factory of such suppliers in or in relation to the manufacture of specified goods which are exempted under small scale exemption notification. The argument taken by the appellant that for any duty liability on the intermediate goods, that come into the existence in appellant s factory, lies with the raw material supplier is not correct because as per the wording of the undertakings only duty liability with respect to the finished specified goods is required to be discharged by the raw material suppliers. The duty liability on the manufactured goods, which come into existence and are captively consumed for which exemption is not available under SSI exemption no.1/93-CE, is required to discharged the appellant / job worker. This view has already been upheld by the Cestat Delhi in the case of Super Polyfabriks Ltd. Vs. CCE, Chandigarh (supra). Paragraph nos. 2, 3 and 8 of the judgment are relevant and are reproduced below:
2. Brief facts are: M/s. Super Poly Fabrics Ltd. as? well as M/s. Fine Fabricators are manufacturers of HDPE bags and sacks falling under Chapter Heading 39 of the Central Excise Tariff Act, 1985. They paid Central Excise duty at the time of clearance of bags and sacks. They also availed the benefit of SSI exemption Notification No. 1/93.
3. According to the Appellants, M/s. Fine? Fabricators (FF for short) send HDPE granules to M/s. Super Poly Fabrics Ltd. (SPF for short) for the manufacture of fabrics on job work basis in terms of Notification No. 83/94 and 84/94-CE as per declaration filed by them. SPF in turn convert the granules into fabrics and send them back to FF who thereafter manufacture sacks out of the said fabrics. According to the appellants, during the manufacture of sacks, strips emerged at the intermediate stage as an inevitable consequence.
4.
5.
6.
7.
8. We have considered the submissions. We are unable to accept the contention of the appellants. The Tribunal s majority decision in Dukart and Company case (supra) would not apply to the facts of the case before us. That decision primarily dealt with the aspect of computation of aggregate value of certain specified goods captively consumed used for further manufacture of specified goods within the factory of production of inputs. The question of clearances of goods by job worker did not arise in that case. In the facts and circumstances of the instant case, the question relates to the availability of slab exemption to job workers where certain intermediate goods are manufactured during the process of job work. Further, it is also not permissible to extend the ratio of a decision interpreting one notification to another notification, since the objects of the two notifications would differ widely. We do not also find any infirmity in the line of reasoning followed in the impugned order relating to the limited scope of the definition of job work under Notification Nos. 83/94 and 84/94. We therefore, confirm the duty demand made on M/s. Super Poly Fabrics.
6. A similar view has also been taken with respect to brass bars, which come into existence in the factory premises of the job worker, by Cestat Mumbai in the case of Astron Engineers (I) Pvt. Ltd. Vs. CCE, Pune-III (supra). In view of the above observations and the case laws relied upon by the revenue duty liability with respect to intermediate goods which come into existence, which are not specified in annexure to the small scale exemption notification, as amended, lies with the appellant and is required to be confirmed on merits.
7. So far as time barred nature of the demand is concerned, Ld. Advocate appearing on behalf of the appellant argued that the required intimations / clarifications were filed by the suppliers of raw material with the jurisdictional central excise authorities. The inputs received and the specified goods were duly cleared under prescribed challans, therefore, extended period is not invokable when such clearances of job worker are also shown in the periodical returns filed with the department. It is observed from the declarations filed by the raw material suppliers that the column in such declarations, pertaining to manufacturing process of the job work, are either kept blank by the raw material supplier or the process simply says that raw materials are converted into specified goods of notification no.1/93-CE. Similarly the challans maintained by the appellants and the raw material suppliers also give no indication of the weight or description of the intermediate billets / rods which come into existence. It is pertinent to note that certain manufacturing products mentioned in Sr. No.xxiv of annexure to notification no.8/2003-CE, dt. 01.03.2003 and Sr. No.(xxxii) to (xxxiv) of annexure to notification no.8/2006-CE, dt. 01.03.2006) give specifications of certain manufacturing goods which are not to be considered as specified goods for availment of SSI exemption. In the absence of any such details given / available in the declarations / challans by the raw material suppliers and in the absence of any such specifications mentioned in the periodical returns filed by the appellants it cannot be said that there is no suppression / misstatement. Being in the manufacturing and job work of goods of Chapter 74 of the Central Excise Tariff Act, 1985 it has to be held that appellant was aware that brass billets / rods come into existence and that brass billets weighing upto 5 Kgs. and certain other goods of copper are not specified goods. In view of the above, the extended period under Section 11A of the Central Excise Act, 1944 is invokable in the present proceedings. In view of the above observations on merits as well as on time bar, the case goes against the assessee and in favour of the revenue and accordingly appeal filed by the appellant is required to be dismissed.
8. Appeal filed by the appellant is dismissed.
(Pronounced on 24.07.2014)
(M.V. Ravindran) (H.K. Thakur)
Member (Judicial) Member (Technical)
AVSP
1
No comments:
Post a Comment