Custom, Excise & Service Tax Tribunal
M/S. Bangalore Electricals Works, No. ... vs Commissioner Of Central Excise, ... on 17 March, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE
Final Order No . 20352-20354 / 2014
Application(s) Involved:
E/Stay/27044, 27045 & 27046/2013
in E/26718, 26719 & 26720/2013-DB
Appeal(s) Involved:
E/26718, 26719 & 26720/2013-DB
[Arising out of Order-in-Appeal No. 67-69/2013 dated 28/02/2013 passed by Commissioner of Central Excise, BANGALORE-I]
M/s. Bangalore Electricals Works, No. 32-b, Bommasandra Industrial Area, Bommasandra, Hosur Road,
BANGALORE-562158 Appellant(s)
Mr. A.K. Mahesh,
Bangalore Electricals Works
No.32-b, Bommasandra Industrial Area, Bommasandra, Hosur Road,
BANGALORE-562158 Appellant(s)
Mr. Saduvedanandam
Bangalore Electricals Works
No.32-b, Bommasandra Industrial Area, Bommasandra, Hosur Road,
BANGALORE-562158 Appellant(s)
Versus
Commissioner of Central Excise, Customs and Service Tax - BANGALORE-I
POST BOX NO 5400,
CR BUILDINGS,
BANGALORE-560001 Respondent(s)
Appearance:
Mr. Rajesh Kumar, C.A. HIRAGANGE & ASSOCIATES #1010, 1st floor(Above Corp.Bank) 26th Main, 4th T Block, Jayanagar, Bangalore-560041 For the Appellant Mr. N. Jagdish, A.R. For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER ________________________________________ Date of Hearing: 17/03/2014 Date of Decision: 17/03/2014 Per B.S.V. MURTHY On going through the records and hearing both sides, we find that the appellant, Bangalore Electrical (Appellant/BE) wrote a letter to the department on 01.4.1998 informing that they had been advised by some Consultants that they are liable to pay Central Excise duty on coils manufactured by them during the course of repairing motors / generators. The appellant had two units, one manufacturing and selling coils and another for repairs. In the first unit, there is no dispute that they were paying duty and the second unit, they are not at all paying duty. The appellant submitted a statement with the letter showing that the appellant need not pay any duty at all if Modvat credit benefit is taken into account for the manufacture of coils and treating the repairing activity as amounting to manufacture. After the letter was submitted with statement, the departmental officers visited the unit and thereafter, in August 1999, a show-cause notice was issued to the appellant proposing demand of Central Excise duty on the coils. However, benefit of Modvat credit on the clearance made by the appellant was not taken into account. This is the second round of litigation. In the first round of litigation, the Commissioner (Appeals) had allowed the appeal filed by the assessee on the ground that the case is covered by decision of the Tribunal in the case of Commissioner of Central Excise vs. Punjab State Electricity Board [1995 (76) E.L.T. 313 (Tri.)] which was upheld by Honble Supreme Court. Learned Commissioner (Appeals) had also observed that the materials sold by another unit could not be considered to determine duty liability in the repairing unit. The appeal was allowed on the ground of non-marketability of coils used for repairing of motors and generators. On appeal filed against this order, in the absence of the assessee, the Tribunal considered the decision of the Commissioner applying the decision of the Tribunal in the case of Punjab State Electricity Board (supra) did not appear to be proper and correct since there was no proper discussion in detail and the matter was remanded once again. The impugned order was passed and in the order, the Commissioner has observed that goods are marketable in view of the fact that the appellant was paying duty on the coils and therefore, they are marketable.
2. Learned C.A. on behalf of the appellant submits that observations of the Commissioner that the goods are marketable is not correct. It is his submission that the appellant has treated this repairing as works contract service and was paying tax. In works contract service, VAT was paid. Moreover, he also submits that the appellants claim for Modvat credit is totally ignored.
3. Learned A.R. on behalf of Revenue submits that the appellant neither informed any details to the department nor produced any documents and therefore, Modvat credit was rightly denied. He also submits that the issue has been properly considered by the lower authorities.
4. We have carefully considered the submissions made by both sides. At this stage, we do not go into a lot of details. In this case, the appellant wrote a letter to the department admitting their liability to pay and intimating the department that they are entitled to Modvat credit. However, on going through the show-cause notice, we find that the appellant has made out a case in the letter sent to the department which has not been considered and their claim of Modvat credit was rejected on the ground that no documents were produced. However, learned C.A. submits that all the documents were produced to the investigating officers. The whole case has a lot of questions without answer. The question also arises when the assessee himself brought to the notice of the department that they are entitled to Modvat credit and the documents have been produced to the investigating officer, the observation that modvat credit has been claimed without documents is surprising. The adjudicating authority simply said that the documents were not produced before him. We also find that coils which are prepared for repair amounts to manufacture of new coil is not coming out. This aspect has not been considered at all. The ground taken by the Revenue is that the appellant is able to sell coils and therefore, the coils can be said to have been manufactured and marketed and since the same is happening in the other unit. In the activity of replacing the coils for repairing motor / generators, the coils can be said to have been manufactured. The question whether winding an old motor would amount to manufacture of a new coil was not addressed properly. Since nothing is clear, we consider it appropriate that the matter should go back to the original authority to begin a fresh proceeding, proper verification of all the documents with regard to the appellants claim of Modvat credit and quantification of duty payable, etc. Since the issue is not clear, we are not making any observation or expressing any opinion on any of the issues. Accordingly, we direct the original authority to decide the matter afresh untrammeled by any of observations in any of the proceedings till now. In the result, the impugned order is set aside and the matter is remanded to the original authority with a direction to the appellant to cooperate with the adjudicating authority and expedite the adjudication proceedings since the matter is about 15 years old. The appeals filed by the partners are also disposed of in above terms.
(Dictated and pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER /vc/