Custom, Excise & Service Tax Tribunal
M/S. Dynacon Equipment (P) Ltd vs Cce, Chennai on 23 April, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/488/2001
(Arising out of Order-in-Appeal No.172/2000 (MIII) dated 26.12.2000 passed by the Commissioner of Central Excise (Appeals), Chennai)
For approval and signature:
Honble Mr. P. G. Chacko, Member (Judicial)
Honble Mr. P. Karthikeyan, Member (Technical)
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 the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. Dynacon Equipment (P) Ltd. Appellants
Vs.
CCE, Chennai Respondent
Appearance Shri M. Masilamani, Consultant for the Appellants Shri N.J. Kumaresh, SDR, for the Respondent CORAM Honble Mr. P. G. Chacko, Member (J) Honble Mr. P. Karthikeyan, Member (T) Date of Hearing: 23.04.2008 Date of Decision: 23.04.2008 Final Order No. ____________ Per P. G. CHACKO This appeal filed by the assessee is against an order of the Commissioner of Central Excise (Appeals), Chennai 34, upholding an order of the Assistant Commissioner of Central Excise, Chengalpet Division, Chennai 45, confirming demand of duty of Rs.9,75,000/- in respect of bought-out items classified under SH 8431.00 of the First Schedule to the Central Excise Tariff Act and valued at Rs.65.00 lakhs and another demand of differential duty of Rs.2,60,400/- on items [classified under the same entry] manufactured by the assessee and supplied to their customer under a contract. The appellate authority, however, allowed the benefit of MODVAT credit to the assessee for payment of the above duty on the product covered by the contract. The assessee had entered into a contract with M/s. Marico Industries Ltd., Kanjikode (Kerala) for supply of equipments and materials for copra handling system and for oil mill modification at the premises of the said company. This contract was made on 31.8.1995 and the same was disclosed to the department on 26.12.1995. The equipments and materials manufactured by the assessee in their factory at Maraimalai Nagar (Tamilnadu) were removed on payment of duty, to the Kanjikode premises of the customer. The bought-out items were directly brought to the said premises. Some of these items were assembled into copra handling system and the remaining items were used for oil mill modification at the customers premises. The entire work was covered by the aforesaid contract. The relevant show-cause notice dated 14.2.1996, which was issued by the Superintendent of Central Excise, Maraimalai Nagar I Range, demanded differential duty of Rs.14,30,345/- on that part of the value of the contracted product which was relatable to the bought-out items. It also demanded differential duty of Rs.1,54,490/- on certain amount of interest [held to be financial flow-back to the assessee] which was not included in the assessable value of the said product. The notice also made further demand of differential duty of Rs.1,67,200/- alleging that the assessee had cleared machinery in knocked-down condition from their factory and that the same were chargeable to duty at the rate of 15% as applicable to SH 8431.00 and SH 8479.90. All these demands were contested by the party on numerous grounds. The Assistant Commissioner of Central Excise, Chengalpet Division, held against them and his decision was partly sustained by the Commissioner of Central Excise (Appeals), Chennai.
2. In the present appeal, the main objection raised by the assessee is that the Assistant Commissioner had no jurisdiction to demand duty on the product which emerged at the customers premises at Kanjikode. It is submitted that, on this very ground, the Order-in-Original and the Order-in-Appeal are not sustainable. Other grounds have also been raised in this appeal, one of these being that the Assistant Commissioner had no pecuniary jurisdiction inasmuch as he was not authorized to deal with cases involving an amount of duty exceeding Rs.2.00 lakhs. We have heard the consultant for the appellants and SDR for the Revenue.
3. The impugned demand of duty is on the contracted product. A major part of this demand is on the ground that a part of the value of the contracted works was left out of the assessable value of the equipments and materials cleared from the assessees factory to Kanjikode. Another part of the demand is on the ground that certain amount of interest, held to be representing financial flow-back to the assessee from the customer, was not included in the assessable value. Yet another part of the demand is based on the CKD concept. At the end of the story, the entire demand of duty is on the product contracted between the assessee and the Kanjikode party. Undisputedly, this product emerged in the premises of the customer at Kanjikode. The demand of duty, which is based on the premise that an excisable product emerged at Kanjikode in terms of the said contract, could not have been raised by the Superintendent of Central Excise, Maraimalai Nagar Range, nor taken up for adjudication by the Assistant Commissioner of Central Excise, Chengalpet Division. It would follow that the lower appellate authority also had no jurisdiction over the subject-matter of the dispute. In the circumstances, we need not examine any other ground of this appeal. The orders of the Assistant Commissioner and the Commissioner (Appeals) are set aside for want of jurisdiction and this appeal is allowed.
(Dictated and pronounced in open court)
(P. KARTHIKEYAN) (P.G. CHACKO)
Member (T) Member (J)
Rex
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