Custom, Excise & Service Tax Tribunal
M/S Ranaudyog (P) Ltd vs Commissioner Of Central Excise, Kol.Ii on 5 September, 2013
THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Ex. Appeal No.474/06
Arising out of O/O No.17/Commr./CE/Kol.II/Denovo/Adjn./2006-07 dated 16.05.2006 passed by Commr. of Central Excise, Kol.II
For approval and signature:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
DR. I. P. LAL, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s RanaUdyog (P) Ltd.
APPELLANT(S)
VERSUS
Commissioner of Central Excise, Kol.II
RESPONDENT (S)
APPEARANCE
Shri S. P. Majumdar, Advocate for the Appellant (s)
Shri S. P. Pal, Appraiser (A.R.) for the Department
CORAM:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
DR. I. P. LAL, HONBLE TECHNICAL MEMBER
DATE OF HEARING &PRONOUNCEMENT : 05. 09. 2013
ORDER NO.FO/A/71122/2013
Per Dr. D. M. Misra :
This appeal is filed against the Order-in-Original No. 17/Commr./CE/Kol.II/Denovo/Adjn./2006-07 dated 16.05.2006 passed by Commr. of Central Excise, Kol.II
2. Briefly stated the facts of the case are that the Appellants are engaged in the manufacture of Rolls, Pusher, Ejector, Speed Increaser, Roller Table, Cold Shear, Pinch Roll etc.and also parts of Rolling Mills. The Appellants had submitted a statutory declaration under Rule 173B of the Central Excise Rules, 1944 classifying the said product under the Tariff Sub-heading 8455.10 and for parts under the Tariff Sub-heading 8455.90 of CETA, 1985.The Appellant was issued with a demand notice on 31.12.98 for Rs.25,32,554/- alleging short payment of duty on account of mis-classification of their aforementioned goods as All goods other than parts under chapter sub-heading 8455.10 attracting Central Excise duty @ 10% Adv. instead of parts under chapter sub-heading 8455.90 attracting Central Excise duty @ 15% Adv. for the period from 16.03.1995 to February, 1997. It is alleged that the Appellant did not declare the manufactured goods as parts, but cleared the same declaring as for use in the Rolling mills. This has resulted in mis-declaration by way of mis-classification of the goods with intent to evade payment of duty. The said notice, on adjudication, was confirmed. Hence the present appeal.
3. The ld. Advocate, Shri S. P. Majumdar, appearing for the Appellant, submitted that the Appellant had filed classification Declaration No.1/RV/96-97 dated 30.04.96 declaring the manufactured goods being Annexure A to the said Declaration, as falling under Chatper Sub-heading No.8455.10 and parts (Annexure B) to the said list under Chapter Sub-heading 8455.90 of CETA, 1985. The ld. Advocate further submitted that prior to the said declaration,all these products were classified under Chapter sub-heading 8455.00 of CETA, 1985. The ld. Advocate further submitted that the said Sub-heading, prior to 16.03.1995, readas Metal Rolling Mills and Rolls there for. This Sub-heading had been bifurcated in 1995 Budget into two sub-headings, namely, All goods other than parts (Sub-heading No.8455.10) and parts(Sub-heading No. 8455.90), attracting duty at the rate of 10% & 15%, respectively. Consequently the goods manufactured by the Appellant, were declared accordingly. The ld. Advocate contended that each of the items mentioned under Annexure A to thesaid classification Declaration, has beena machine by itself having independent function and used in metal rolling mills and hence, ought to be treated as a metal rolling mill. He has, however, fairly accepted that during the period in dispute, they were not placed with an order for supply of a complete metal rolling mill and accordingly, these goods were cleared not in piecemeal of a metal rolling mill. The ld. Advocate also fairly contented that the Appellants, before this Tribunal, now choose not to seriously contest the classification of the said goods, as claimed earlier.But on behalf of the Appellant, he has vehemently argued that the demand is barred by limitation. The ld. Advocate submitted that on a bonafide belief that each of these machines being capable of and discharging its function independently and invariably beingused in rolling mills, therefore, filed declaration under Chapter sub-heading 8455.10 being All goods other than parts. The ld. Advocate further submitted that the same set of machines were also enclosed with their classification list prior to 16.03.1995 and duly approved by the Department. In support, he has placed before this Tribunal the approved classification list No.70/RE/HND/R-V/91-92 dt.17.09.1991. Hence, in his submission, the Department is fully aware of the fact that these goods were manufactured and cleared by them prior to 16.03.1995 under sub-heading 8455.00 of CETA, 1985. Thus, there is no mis-declaration, mis-statement of description of goods manufactured and cleared by them on payment of duty on the basis of a classification declaration duly filed by them. In support, he has referred to various judgements, which are as follows : (i)DensonsPultretaknik Vs. CCEx. : 2003 (155) ELT 211 (SC) ;(ii) Tata Iron & Steel Co. Ltd. Vs. Union of India and Others : 1988 (35) ELT 605 (SC) ;(iii)Ballarpur Industries Ltd. Vs. Union of India : 1994 (74) ELT 795 (Del.) ;(iv)ShahnazAyurvedics Vs. CCEx., Noida : 2004 (173) ELT 337 (All.) ;(v)Sumeet Industries Ltd. Vs. CCEx., Surat : 2010 (259) ELT 152 (Tri.-Ahmd.) ; (vi) Alpha Lab Vs. CCEx., &Cus., Vadodara : 2009 (247) ELT 625 (Tri.-Ahmd.);(vii)Ranutrol Lifestyle Vs. CCEx., New Delhi : 2008 (232) ELT 272 (Tri.-Del.) ; (viii) Cipla Ltd. Vs. CCEx., Mumbai II : 2006 (205) ELT 652 (Tri.-Mumbai).
4. Per contra, the ld.A. R. for the Revenue, reiterated the findings of the ld. Commissioner and submitted that all these goods mentioned in Annexure A to the classification Declaration, were not cleared by the Appellants as a Rolling Mill, but were cleared from time to time as parts of rolling mills. It is his submissions that these items were cleared to various rolling mill for replacement of damaged or worn out parts and the Appellants could not establish through documentary evidences that the dispatch of individual machines was against the Purchase Order of a Metal Rolling Mill. On the issue of limitation, the ld. A.R. contended that even though, the goods were claimed as parts of Rolling Mill, appropriate duty was not paid and hence, extended period of limitation is applicable, and the Appellant were required to pay the differential duty.
5. Heard both sides and perused the records. The issues involved are : (i) whether the product manufactured by the Appellants and declared at Annexure A to the Classification declaration dated 30.04.1996, would fall under Chapter Sub-heading 8455.10 or under Chapter Sub-heading 8455.90 of CETA, 1985, and (ii) whether the demand issued on 31.12.1998 for the period 16.03.1995 to February, 1997, is barred by limitation.
6. Undisputedly, the Appellants had declared the product manufactured by them by filing the classification declaration as required under Rule 173B of the erstwhile Central Excise Rules, 1944. In the said declaration, at Annexure A, the description of the items mentioned are as: billet pusher, billet runout pusher, mill stand, cold mill stand, roller table, approach table, tilting table, twisting table, pinion stand, coiler, billet ejector, chain transfer, furnace runout table, recuperator, re-heating furnace, rotary shear, scrap shear, alligator shear, crop shear, billet shear, cold shear, cobble shear, straightening machine, hot shear, rolls (C.I.steel& forged steel), Pinch rolls, pusher with drive, coil conveyor, flywheel assy., reduction gear box, speed increaser, repeaters etc. and the classificationof these produces are declared under Chapter Sub-heading 8455.10 against the broad heading Metal Rolling Mills and Rolls there for as All goods other than parts. The Appellants had also declared in Annexure B, to the said declaration thepartsas classifiable under Chapter sub-heading 8455.90. The dispute centered around classification of products mentioned at Annexure A as All goods other than parts falling under Chapter Sub-heading 8455.10. It is the Revenues case that the said items being parts of Metal Rolling Mill and Rolls there for, hence, classifiable under Chapter Sub-heading 8455.90 attracting duty @ 15% Adv. It is not in dispute that the Appellants had been manufacturing these products earlier classifying the same under the Chapter Sub-heading 8455.00 as Metal Rolling Mills and Rolls there for. The said Heading had been bifurcated in the 1995 Union Budget, which reads as under:
8455.10 - All goods other than parts
8455.90 - Parts
7. The contention of the Appellant is that the aforesaid items are machines having independent functions and are used in the Rolling Mills, hence, ought to be treated as Metal Rolling Mills and Rolls there for and accordingly classifiable under Chapter Sub-heading 8455.10 as All goods other than parts attracting duty @10%. The contention of the Department on the other hand, is that all these parts might have been used in Rolling Mills, but the Appellants had not cleared the rolling mill as such and, hence, these items merit classification as Parts under Chapter Sub-heading 8455.90 attracting duty @15%. Undisputedly, the Appellants had not placed any evidence that all these items were cleared by them against a Purchase Order for supply of Metal Rolling Mill and Rolls there for. It is their contention that since each of these items are itself capable of discharging function of machines independently and used in Metal Rolling Mills and Rolls there for, hence, should fall under the category of All goods other than parts under Chapter Sub-heading 8455.10. At the first blush, the said argument may sound attractive, but on a deeper analysis, would lead to a contrary result. This issue has been examined by this Tribunal in the case of Simplex Engg. & Foundry Works (P) Ltd. Vs. Commr. Central Excise, Raipur reported in 2005 (183) ELT 492 (Tri.-Del.). After taking note of the classification of the items of this nature, the Tribunal had observed as follows :
6.1?We have considered the submissions of both the sides. Heading 84.55 reads as Metal Rolling Mills and Rolls thereof. It is thus apparent that this Heading applies only to (i) Metal Rolling Mills and (ii) Rolls therefor; it cannot apply to any other goods. The parts of Metal Rolling Mills would be classifiable under Heading 84.55 only in terms of Note 2(b) to Section XVI provided they are not included as goods in any of the Headings of Chapter 84 or Chapter 85 [Note 2(a)] or excluded from the purview of Section XVI in terms of Note 1 to Section XVI. It is not in dispute that the Appellants are not supplying the entire Rolling Mill. They are only providing mechanical plant and equipment covering handling and hoisting facilities, technological structures and special tackles, airconditioning, ventilation and fire protection system, compressed air system, de-scaling system (parts), run out and interconnecting roller tables, coiler truck way, coil conveyor, oil, grease, lubricants upto commissioning. Rule 2(a) of Rules for Interpretation of the Schedule applies only when incomplete or unfinished goods have the essential character of the complete or finished goods. The Appellants have not adduced any material on record to prove that the goods supplied by them have the essential character of complete Rolling Mills. In view of this, the impugned goods cannot be treated as complete Rolling Mill for the purpose of classification under sub-heading 8455.10 of the Tariff. Accordingly the decision in the case of Flat Products Equipments (I) Ltd. would not be applicable to the facts of the present matter as in the said matter it was not in dispute that the parts when assembled constitute a complete rolling mill. There is no force also in the submissions of the learned Advocate that from the wordings of sub-heading 8455.10 All goods other than parts it means that all goods other than parts of Metal Rolling Mill would be classifiable under sub-heading 8455.10. It is for the reason that the phrase All goods will be restricted to Metal Rolling Mills which is the Heading and goods for being classified under 8455.10 has to be metal Rolling Mill. This view is strengthened when we refer to Heading 84.55 as given in H.S.N. which reads as under :-
84.55
-
Metal - Rolling Mills and Rolls therefore 8455.10
-
Tube Mills,
-
Other rolling Mills, 8455.21
-
Hot or combination hot and cold 8455.22
-
Cold 8455.30
-
Rolls for rolling mills, 8455.90
-
Other Parts.
6.2?Thus different types of rolling mills are covered by separate sub-headings of HSN whereas in Central Excise Tariff there is only one sub-heading for all types of rolling mills.
8. We do not see any reason to depart or disagree with the aforesaid observation. Also, we find that the ld. Advocate for the Appellants has not seriously disputed the classification of the aforesaid items under Chapter Sub-heading 8455.90 as parts, before us. Thus, following the decision of this Tribunal in Simplex Engg.& Foundrys case (cited supra), we hold that the items in dispute merit classification under Chapter sub-heading 8455.90.
9. The ld. Advocate, however, vehemently argued on the issue of limitation. We find that the Appellants have been manufacturing these products earlier and the classification of the same were approved by the Department. After bifurcation of the Chapter Heading in March 1995, the Appellants declared the said product again and they have declared certain items at AnnextureA to their Classification declaration as falling under Chapter Sub-heading 8455.10 and other items under Chapter Sub-heading 8455.90 at Annexure B to the said declaration. We find force in the arguments of the ld. Advocate that the description of the items had not been changed, and the classification of the said items had been declared as per their bonafide understanding of the respective chapter Sub-heading. There is no dispute that the said declaration had been filed under Rule 173B of the erstwhile Central Excise Rules, 1944, and duly acknowledged by the Department. But, no action had been initiated against the Appellants for recovery of the differential duty due to wrong classification of the items mentioned in the said declaration within normal period as prescribed under Section 11A of Central Excise Act, 1944. The ld. Advocate has placed reliance on various judgements of the Honble Supreme Court and the Tribunal in support his argument that once there is no change in description of the goods and they have been declaring the items manufactured by them to the Department, then, there is no suppression of facts or any mis-declaration. We find that the Honble Supreme Court in the case of Tata Iron & Steel Co. Ltd. Vs. Union of India & Others reported in 1988 (35) ELT 605 (SC), more or less in similar circumstances, had observed as follows :
7. Regarding the question of limitation, the dispute is whether, assuming that the demand made by the Collector was valid, what is the period to which it could relate, it being common ground that as far as composite units comprising wheels, tyres and axles supplied by the appellant to the Indian Railways are concerned the demand under Item No. 68 of the Central Excise Tariff was justified. The question here is as to whether that demand could extend only to six months prior to the service of the show cause notice as contended by the appellant or upto a period of five years prior to that notice as contended by the respondent. In this regard, Section 11A is the relevant provision. The said section has been amended in 1978, but we are not concerned with that amendment. A perusal of Sub-section (1) of that Section shows that where any duty of excise has not been levied or short levied or short paid or erroneously refunded, the Central Excise Officer concerned may, within six months from the relevant date, serve notice on the person chargeable with that duty. This provision would clearly show that the period for which the demand could be made was only six months prior to the service of the notice. Now, in the present case, it has been found by the High Court and, in our opinion, rightly, that there was no suppression or mis-statement of facts or fraud by the appellant to which the alleged short levy or non-levy could be attributed. In fact, it is common ground that right from 1962 the appellant was filing classification lists containing the description of the items and showing them as liable to the payment of excise duty only under Item No. 26AA(ia) and these lists were accepted and approved by the excise authorities. In these circumstances, we fail to see how it could be said that the appellant was guilty of any suppression or mis-statement of facts or collusion or violation of the provisions of Central Excises Act as contemplated under the proviso to Section 11A of the said Act. In view of this, the period of limitation would clearly be only six months prior to the service of the show cause notice. The demand for excise duty against the appellant on the said composite units under Item No. 68 of the Excise Tariff, to the extent that it exceeds the period of six months prior to the service of the show cause notice must, therefore, be struck down.
10. The aforesaid observation of the Honble Supreme Court is squarely applicable to the facts of the present case in as much as the description of the goods declared by the Appellant remains unchanged before and after restructuring of the Chapter Heading No.84.55 of CETA, 1985. Hence, we do not find merit in the allegation of the Department that lesser duty had been paid by the Appellant resorting to suppression or mis-declaration of facts. Consequently, we have no hesitation to hold that the demand notice issued for differential duty is barred by limitation. Finally, our conclusions are:(i) the goods mentioned at Annexure A to the classification declaration filed by the Appellants, merit classification under Chapter Sub-heading 8455.90 as Parts; and (ii) the demand is barred by limitation. The appeal is allowed on the above terms.
( Pronounced in the open Court)
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(DR. I.P.LAL) (DR. D.M.MISRA)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
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Ex. Appeal No.474/06