Customs, Excise and Gold Tribunal - Mumbai
Bombay Processors And Mr. Hitendra ... vs Commissioner Of Central Excise on 2 September, 2003
Equivalent citations: 2004(163)ELT111(TRI-MUMBAI)
ORDER Archana Wadhwa, Member (J)
1. As per facts on record, the appellants are engaged in the manufacture of Railway Parts and Components namely Liners/Lugliners/Wear Plates etc.
2. During the relevant period, a dispute about the correct classification of Liners, was going on between the appellants and their jurisdictional Central Excise Authorities. The appellants filed a Classification List No. 3/89-90 dated 18.8.89 under protest classifying the Liners under sub-heading 8607.00. The Assistant Commissioner passed an Order holding that the Liners are non-excisable goods and the processes carried out by the appellants does not amount to manufacture. Subsequently, a Review Application was filed on or about 28.10.90 before the Commissioner (Appeals) who vide Order dated 7.1.92 remanded the matter to the Assistant Commissioner for de novo consideration. The Assistant Commissioner in de novo proceedings passed an Order on 2.2.93 holding that the Liners are classifiable under heading 86.07. The appellants filed an appeal against the above Order which is reported to be pending before the appellate authority.
3. Subsequently, the appellants were issued a show cause notice dated 22.3.93 raising demand of duty against the appellants in respect of the Liners manufactured and removed by them during the period from 1.4.88 to 31.12.92 during the course of adjudication proceedings. The appellants contended that during the relevant period, there was a proper order by the Assistant Commissioner holding the Liners as non-excisable and as such, there was no justification for raising the demand in respect of the same. The subsequent Order passed in the month of February, 1993, would be effective prospective, inasmuch as during the relevant period, the assessments were not provisional. They also contended that the clearance effected by another independent unit, M/s. Indian Metal Craft Industries, have also been clubbed with their clearances and the demand has been raised accordingly. They submitted that the said M/s. Indian Metal Craft Industries were an independent entity engaged in the manufacture of various ferrous and non-ferrous metal parts and they had simply allowed M/s. Indian Metal Craft to store their final products in their godown under agreement. The duty-paid materials belonging to M/s. Indian Metal craft were received in their factory under their delivery challans and separate Purchase/Sale Ledgers were maintained. They also contended that in any case, they would be entitled to the benefit of the Notification No. 175/86, inasmuch as their clearances were well within the exemption limit. The said show cause notice was adjudicated by the Commissioner, vide which he confirmed the demand of duty of Rs. 20,58,582.00 (Rupees twenty lakh fifty-eight thousand five hundred and eighty-two) against the appellants, apart from confiscating the seized goods with an option to them to redeem the same and imposing penalty of Rs. 21.00 lakh (Rupees twenty-one lakh) on M/s. Bombay Processors and penalty of Rs. 2,000.00 (Rupees two thousand) on Shri H.H. Zhaveri. The said Order is impugned before us.
4. We have heard Shri Ajay Sethi, learned Advocate for the appellants and Shri M.M. Sheikh, learned J.D.R. for the Revenue. It has been contended before us that the demand in question was barred by limitation having been raised beyond the period of six months from the relevant date. Inasmuch as the appellants were clearing the goods with the approved Classification List by the proper officer, there was no suppression of facts or misstatement by the appellants justifying invocation of the longer period. It has also been argued that the Commissioner has erred in not extending the benefit of Notification No. 175/86 dated 1.3.86 on the ground that they had manufactured and removed the Railway Parts clandestinely by making misstatement in the Classification List and had not opted to avail SSI exemption.
5. We find that the Commissioner has not given any finding on the point of limitation. We also do not find any favour with the Commissioner's reasoning for denial of the benefit of the Notification No. 175/86. It is on record that the Assistant Commissioner held the Liners as not non-excisable and it is in compliance with the said Order that the appellants were clearing the goods without payment of duty during the relevant period, in which case the question of availing the benefit of Notification does not arise. It is only subsequently that the goods were held to be excisable, in which case the Revenue is duty-bound to extend the benefit of the Notification in question to the appellants and to adjudge their duty-liability accordingly. As such, without deciding the question of correct classification of the Liners, we set aside the impugned Order and remand the matter to the Commissioner for de novo decision on the above disputed issue of limitation as also availability of exemption notification to the appellants. The appellant are at liberty to advance arguments on the issue of correct classification of the goods. Appeal is thus allowed by way of remand.
Pronounced 21/09/2003.