Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S Indo Rama Textiles Ltd on 25 November, 2008
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH COURT NO. 1 Excise Appeal No. 952 of 2006-SM (Arising out of Order-in-Appeal No. IND-I/295/2005 dated 31.08.2005 passed by the Commissioner of Customs & Central Excise (Appeals), Indore). DATE OF HEARING : 25.11.2008 DATE OF DECISION : 25.11.2008 FOR APPROVAL AND SIGNATURE : HONBLE MS. JYOTI BALASUNDARAM, VICE-PRESIDENT 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 their Lordships wish to see the fair copy of the Order ? 4. Whether Order is to be circulated to the Departmental Authorities? CCE, Indore . Appellant (Rep by Sh. S.K. Bhasker, DR) versus M/s Indo Rama Textiles Ltd. . Respondent
(Rep. by Sh. Ramesh Nair, Adv.) CORAM : HONBLE MS. JYOTI BALASUNDARAM, VICE- PRESIDENT ORDER NO._______________________________ PER JYOTI BALASUNDARAM :
In this case the Deputy Commissioner of Central Excise disallowed Cenvat credit of Rs. 84,416/- wrongly availed by the assessee during the period March, 2001 to March, 2004 on the activity of rewinding or repacking of man made yarn on the ground that such process did not amount to manufacture. The Commissioner (Appeals), however, set aside the demand on the ground that the Department has not been able to establish that in respect of yarn received for repair from customers for the purpose of rewinding/repacking, the assessee had used new materials, such as, cones and other packing material in order to demand the duty. Hence this appeal by the Revenue.
2. I have heard both sides. I find that the assessee accepts that the activity of rewinding/repacking does not amount to manufacture. The only point raised by them is that, in addition to rewinding on the same old cones on which yarn was wound or initially cleared from the factory, they had used a small quantity of new cones and, therefore, demand on the entire quantity of cones was not sustainable. However, no records have been maintained by the assessee as to the quantity of new cones used for the purpose of rewinding/repacking of defective yarn sent for such purpose into their factory from their customers. The plea of time bar, namely, that the demand raised for the period March, 2001 to December, 2003 is barred by limitation as the show cause notice has been issued on 28.12.2004 and there is no suppression of any facts by the assessee with intent to evade payment of duty, has not been considered by the Commissioner (Appeals) for the reason that relief was extended to the assessee on the merits of the case. The interest of justice, therefore, requires that the case be sent back for fresh decision to the lower appellate authority on the plea of limitation as well as on the merits of the demand. I, therefore, set aside the impugned order and remit the case for fresh decision in accordance with law to the Commissioner (Appeals) who shall consider the pleas of the assessee on the merits as well as on time-bar and pass fresh orders after extending a reasonable opportunity of being heard in their defence.
3. The appeal is thus allowed by way of remand after setting aside the impugned order.
(Dictated and pronounced in the open Court on the 25th day of November, 2008) (JYOTI BALASUNDARAM) VICE-PRESIDENT Golay