Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Central ... vs M/S Paragaon Polymer Products Ltd on 30 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. E/808/2008 (Arising out of Order-in-Appeal No. 38/2008 (H-I) CE dated 31.07.2008 passed by Commissioner of Customs, Central Excise and Service Tax, Hyderabad) Commissioner of Customs, Central Excise & Service Tax, Hyderabad-I ..Appellant(s) Vs. M/s Paragaon Polymer Products Ltd., ..Respondent(s)
Appearance Shri M. Chandra Bose, Additional Joint Commissioner (AR) for the Appellant.
Ms. Radha Arun, Advocate for the Respondent.
Coram:
Honble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Honble Mr. MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Date of Hearing: 30/01/2018 Date of Decision: 30/01/2018 FINAL ORDER No. A/30138/2018 [Order per: M.V. Ravindran] This appeal is filed by the Revenue against Order-in-Appeal No. 38/2008 (H-I) CE dated 31.07.2008.
2. Heard both sides and perused the records.
3. Revenue is aggrieved by the impugned order on the ground that the First Appellate Authority incorrectly set aside the Order-in-Original that confirmed the demands by invoking extended period.
4. In the case in hand, the Adjudicating Authority confirmed the demands raised for the period 2004-2005, 2005-2006 and 2006-2007 holding that the respondents herein are ineligible to avail the benefit of SSI exemption as they have crossed the limit by manufacturing exempted products during the period. The First Appellate Authority has relied upon three letters by the respondents to the incharge of Superintendent and he set aside the demand beyond the normal period but upheld the demands within the normal period from the date of show cause notice. It is the submission of the Learned Counsel that their appeal against the demand raised within the limitation is settled by them.
5. On the other hand, Learned Counsel assails the order only on the ground that reliance has been placed on letter do not indicate the value of the clearances of the exempted products, as the respondent did not give details of the clearances of the branded or non branded goods during the period. She produces the letters before us.
6. On perusal of the said letters, we find the respondent has been regularly informing to the authorities about intention of manufacturing branded goods as well as non branded goods as their own products. We find the First Appellate Authority was correct recording the following findings:
3. Firstly, whether the demands confirmed in the impugned order are hit by limitation. Secondly, whether the value of Hawai Chappals with the brand name PARAGON and the value of Rubber Waste are to be taken into consideration for computing the aggregate value of clearances. I first take up the time bar aspect for consideration. From the records it is seen that the appellants had availed the small scale exemption in terms of Notification No. 08/2003 dated 01.03.2003 for the financial years 2004-05, 2005-06 and 2006-07 in respect of solid rubber tyres manufactured by them. A case has been made out by the Department that the appellants had not given the details of value of clearances of exempted Hawai Chappals and Rubber Waste in the ER-3 returns filed by them, and that taking the value of such clearances for the computation of the value of clearances made during the relevant financial years the appellants are not entitled to the benefit of small scale exemption. The appellant, on the other hand, are relying on their letters dated 12.05.2003, 16.01.2004 and 02.02.2004 bringing to the notice of the of the Department the fact of manufacture of chappals with the brand name PARAGON and therefore the allegation of suppression of facts cannot be held against them. In the show cause notice dated 22.12.2006, the Department had alleged suppression of facts and invoked extended time limit for demanding duties for the financial years 2004-05, 2005-06 and 2006-07 (upto October, 2006). The Department has made two grounds on which the SSI exemption has been sought to be denied. The first ground is that the Hawai Chappals with the brand name PARAGON belongs to the appellants only, contrary to the appellants claim that the brand belong to M/s Paragon Rubber Industries. The second ground is that the value of the Hawai Chappals which are exempted, has to be taken into account for computing the value of clearances made by the appellants in terms of Clause (vii) of para 2 of the Notification. As already stated above, based on the above two grounds, the Department alleged suppression of the fact of manufacture or Hawai Chappals as the details of the same were not furnished in the ER-3 Returns filed by the appellants. As against this, the appellants cite the letters written to the Department wherein the activities carried on by them were informed to the Department, and hence, no suppression of facts on their part. On going through the records of the case, it is seen that the appellants, in the three letters which are referred to above, had clearly indicated the manufacturing activity of chappals and the solid tyres and had also referred to their availing the benefit of Notification No. 08/2003. It is also on record that they had taken registration for the manufacture of the solid rubber tyres which were liable to duty but for the exemption interms of Notification No. 08/2003. In the light of these letters of the appellants, it is difficult to accept the Departments allegation of suppression of facts. When the appellants had clearly indicated the fact of manufacture and the availment of the exemption interms of Notification No. 08/2003, it was for the Department to probe or seek for further information in case it was felt that there was a need to satisfy about the entitlement of the appellants to the benefit of the Small Scale Exemption. Not only that, no questions were asked during the material time when the appellants had brought to the notice of the Department their activities. It appears that even the ER-3 Returns filed by the appellants had gone without any scrutiny despite the contents of various letters written by the appellants. The original adjudicating authority in para 16 of his order observes as follows:
I have gone through the ER-3 submitted by them to the Department. They have nowhere mentioned about hawai chappals manufacturing at all, which is nothing but suppression of fact. It is true that in their letter dated 19.01.2004 and 02.02.2004 they have mentioned about their intentions of availing the benefit but until and unless the values are shown in ER-3s, it is next to impossible to think that they have executed their intention. Clearly, this crucial fact they have hidden all along in their returns. This above finding of the adjudicating authority is unacceptable in the light of the letters written by the appellants. As the fact of manufacture of exempted Hawai Chappals and reference to Rubber Waste prominently figured in their correspondence addressed to the Department, the allegation of suppression of facts thereby attracting the larger period for demand of duty is not sustainable.
We do not find any reason interfere in such a detailed reasoning given by the First Appellate Authority. As the matter of the fact, we perused the records produced by the Learned Departmental Representative and notice that factual findings of First Appellate Authority is correct. We find that the Superintendent incharge of assessee had sought classification on this issued in February 2004. In view of the foregoing, we hold that the appeal of Revenue is devoid of merits.
7. The impugned order upheld as correct and legal and does not suffer from any infirmity.
8. Revenues appeal stands rejected.
(Order dictated & pronounced in open court)
MADHU MOHAN DAMODHAR M.V. RAVINDRAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Lakshmi.
Appeal No. E/808/2008
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