Custom, Excise & Service Tax Tribunal
Mumbai - Iv vs Ratnatraya Heat Exchangers Ltd on 8 March, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI CENTRAL EXCISE APPEAL NO: 2798 of 2003 [Arising out of Order-in-Appeal No: PD/149/M-IV/2003 dated 31/07/2003 passed by the Commissioner of Central Excise (Appeals), Mumbai - IV.] For approval and signature: Hon'ble Justice Shri R.M.S. Khandeparkar, President and Hon'ble Shri P.R. Chandrasekharan, 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? : Yes 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : No 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes Commissioner of Central Excise Mumbai - IV ...Appellant Vs Ratnatraya Heat Exchangers Ltd. ...Respondent
Appearance:
Shri K. Lal, Authorised Representative (SDR) for the appellant None for the respondent CORAM:
Hon'ble Justice Shri R.M.S. Khandeparkar, President and Hon'ble Shri P.R. Chandrasekharan, Member (Technical) Date of hearing: 08/03/2011 Date of decision: 08/03/2011 ORDER NO....................................................
Per: Justice R.M.S. Khandeparkar, President Heard the DR for the appellant. None present for the respondent though served.
2. This appeal arises from order dated 31/07/2003 passed by the Commissioner (Appeals), Mumbai whereby the appeal filed by the respondent against the order of the adjudicating authority was allowed and the order of the adjudicating authority was set aside. The Additional Commissioner, Mumbai by his order dated 04/042002 had confirmed the demand of Rs. 1,53,367/- along with interest and penalty of equal amount besides penalty of Rs. 20,000/- under Rule 173Q(1) read with Rule 9(2) of the Central Excise Rules, 1944.
3. The respondent were engaged in the manufacture of excisable goods, namely, radiators and parts thereof, classifiable under Chapter Heading 87.08 of the Central Excise Tariff Act, 1985. In the course of audit of the respondents records in July, 1999 it was observed that the respondents factory and office premises were affected by flood and consequently their products, finished as well as semi-finished including the furniture and machinery, was damaged and consequently they received insurance amount of Rs. 30,91,171/-. The respondents disposed of damaged finished goods as scrap and paid excise duty accordingly thereon. A show cause notice dated 8th December, 1999 came to be issued which was contested by the respondents under their reply dated 31/12/1999.
4. It was a case of the department that since insurance claim received by the respondents was in respect of the goods which were damaged in the flood and which were subsequently sold as scrap, that, therefore, insurance claim received in relation to such damaged goods should form additional consideration received by the respondents in relation to the scrap and it should be considered as vital factor to arrive at the normal price in respect of the damaged finished goods in terms of Section 4(1)(a) of the Central Excise Act, 1944. The adjudicating authority, accepting the said contention, confirmed the demand. Being aggrieved, the matter was carried in appeal before the Commissioner (Appeals) who under the impugned order, while setting aside the order of the adjudicating authority, held that the respondents though had received certain amount of compensation from the insurance company in relation to the damaged goods, they had also incurred expenses for rectification and repairs of part of the damaged goods and taking into consideration the facts and circumstances of the case the contention of the department was not justified.
5. All said done. The facts remains that the department has not been able to establish that the compensation received from the insurance company was forming part of the sale price of the ultimate product cleared and disposed of by the respondents. Admittedly, it was a compensation in relation to the damage suffered by the respondents. Being so, we do not find any justification for interference in the impugned order.
6. No justifiable ground is disclosed for interfering into the impugned order, and hence the appeal fails and is hereby dismissed.
(Dictated in Court) (Justice R.M.S. Khandeparkar) President (P.R. Chandrasekharan) Member (Technical) */as 1 2