Custom, Excise & Service Tax Tribunal
Federal Mogul Goetze (India) Ltd vs Commissioner Of Central Excise, ... on 1 January, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20010 / 2014 Appeal(s) Involved: E/569/2008-SM [Arising out of Order-in-Original No. 12/2008 dated 03/04/2008 passed by the Commissioner of Central Excise, Bangalore] Federal Mogul Goetze (India) Ltd. Yelahanka, Bangalore Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax - Bangalore-I Post Box No. 5400, CR Buildings, Bangalore - 560 001, Karnataka Respondent(s)
Appearance:
Mr. T.V. Ajayan, Advocate Ravi Shankar & Chander Kumar, Advocates 504,4th Floor, Oxford Towers, No.139, Old Airport Road, Kodihalli, Bangalore - 560 008 Karnataka For the Appellant Mr. Ganesh Haavanur, Additional Commissioner (AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Date of Hearing: 01/01/2014 Date of Decision: 01/01/2014 The appellant intimated the department that they have found 5382 piston rings and 2423 piston rings not marketable and unfit for use and they were recycling the same in their letters to the department. In the first case they waited for 6 days before taking the goods out for recycling and the second case they intimated the fact of removal 8 days after the event took place. A show-cause notice was issued on 19.06.2007 requiring the appellant to pay duty on these goods on the ground that the appellant did not wait for permission to be given by the department before taking the goods out for recycling and therefore provisions of Rule 21 for remission would not be applicable. Besides demanding the duty penalty also has been imposed under Section 11AC of Central Excise Act 1944 and Rule 25 of Central Excise Rules 2002.
2. The learned counsel submits that very fact that appellant intimated would show that there was no intention to evade payment of duty and there was no intention to mis-declare or suppress the fact. Therefore extended period could not have been invoked. In any case the appellant had intimated the fact of removal for such purposes and therefore such intimation would show clearly that the appellant had no intention to suppress the fact at all from the department. Even though there was no legal obligation to intimate, they have done so. Moreover he also submits that according to Boards instruction when such application is made permission should be given within 2 days and this has not been done in this case. He also submits that even if it is assumed that appellant did not follow the procedure and therefore remission was not available, the fact remains that the goods were taken back within the factory for remanufacture and were not removed and therefore exemption from payment of duty under Notification No. 67/95 would be available.
3. Learned AR submits that only in the first instance there was advance intimation and in the second case, appellant had removed the goods and intimated later. She submits that in the absence of permission under Rule 21 of Central Excise Rules, the appellant is liable to pay duty and the mere intimation without waiting for a specific permission is not sufficient and it will amount to contravention of Rule.
4. I have considered the submissions made by both the sides. In this case, as submitted by the learned counsel, intimation has been given and the submission was that the goods were marketable. Rule 21 of Central Excise Rules reads as follows:
Remission of duty- Where it is shown to the satisfaction of the Commissioner that goods have been lost or destroyed by natural causes or by unavoidable accident or are claimed by the manufacturer as unfit for consumption or for marketing, at any time before removal, he may remit the duty payable on such goods, subject to such conditions as may be imposed by him by order in writing. It may be seen while an assessee is required to show that the goods have been destroyed or lost to the satisfaction of the Commissioner, in case of marketability, rule requires a claim by the manufacturer only and not satisfaction of the Commissioner. Therefore what is required is only a claim that the goods are not marketable and it appears from the Rules that Commissioner may not be able to go into the correctness of the claim made by the assessee unless it is shown that the goods have been removed to the market and sold and there was intentional evasion of duty. That being the position, once the letter is written by the appellant, statutory obligation of making a claim is fulfilled. Therefore once such a claim is made, proceedings can be initiated for denying remission of duty if the department felt that no remission is called for. However in the show-cause notice there is no indication of denial of remission but simply a demand for duty. It is not indicated as to how the goods have to be treated as removed from the factory. Secondly in the present Central Excise Rules when duty paid goods are received back into the factory and the process amounts to manufacture, CENVAT credit can be availed and such credit can be utilized for payment of duty on the goods which are manufactured after reprocessing. In the case of piston, once they are melted, in the normal process pistons would be manufactured again and such manufactured piston would be cleared. Therefore in terms of Rule 16 also even if the pistons were taken back for processing after removal the appellants would be perfectly well within his rights to take back the credit of duty paid by the assessee at the time of removal and utilize the same for payment of duty on the finished goods. Therefore there is considerable force in the argument advanced by the learned counsel that the benefit of Notification No. 67/95 would be available in this case. In my opinion the situation here is comparable to the provisions of Rule 16 and since the goods have not been removed on payment of duty, benefit of Notification No. 67/95 would be applicable. Under these circumstances, the extended period for demanding duty should not have been invoked at all in view of the fact that there can be two views on the statutory provisions themselves as discussed above. When there is a question of interpretation, extended period would not have been invoked. On merits also, I find no case for demanding the duty, interest and imposition of penalty. Accordingly appeal is allowed with consequential relief, if any, to the appellant.
(Order dictated and pronounced in open court) (B.S.V. MURTHY) TECHNICAL MEMBER iss