Custom, Excise & Service Tax Tribunal
Mark Metalcompany vs Commissioner, Central Excise & ... on 6 May, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH COURT NO.IV
Excise Appeal No. 52653/2019
[Arising out of Order-in-Appeal No. 108-19-20 dated 26.07.2019 passed by
the Commissioner (Appeals) CGST, Central Excise, Indore (MP)]
MARK METAL COMPANY, INDORE APPELLANT
Vs.
COMMISSIONER, CENTRAL EXCISE &
RESPONDENT
CGST-INDORE APPEARANCE:
Shri Vijay Kumar, Advocate for the Appellant Shri Tamana Alam, Authorised Representative for the Department CORAM:
HON'BLE DR. MRS RACHNA GUPTA, MEMBER (JUDICIAL) DATE OF HEARING /DECISION: MAY 06, 2022 FINAL ORDER No. 50424 /2022 PER DR. RACHNA GUPTA The appellant herein is engaged in manufacture of lead oxide (lead powder) lead ingots and plastic ghamela. Based upon the intelligence, about the appellant to have been engaged in evasion of Central Excise duty that searches were conducted at the factory premises of the appellant and also in the joint offce premises on 16.7.2013 by the officers of Central Excise Commissionerate Indore. Various incriminating documents were recovered and seized. Panchnama of the even date, statements of all concerned were recorded. Based on those statements and the documents seized that the Show Cause Notice CN No. V(39)15-04/2016 dated 26.9.2016 was served upon the appellant proposing the recovery of an amount of Rs.1,38,20,036/- along E/ 52653/2019 with interest and penalty. The proposal was initially confirmed vide Order-in-Original No. 07/2017-18 dated 25.10.2017. The appeal thereof had been partly allowed by Commissioner (Appeals) whereby the entire demand and penalties have been dropped/set aside except for an amount of demand and penalty of Rs. 12,17,012/-. Still being aggrieved, the appellant is before this Tribunal.
2. Learned Counsel has submitted a synopsis. It is mentioned that Commissioner (Appeals) while confirming the impugned demand has still relied upon the loose papers/ despatch bills recovered from the factory of the appellant. The weighment done on the spot is alleged to be wrong. It is also submitted that demand which has been upheld by Commissioner (Appeals), pertain to the Lead powder supplied by the appellant to Shri Laxman Barfa owner of Mackson Batteries. For manufacture of batteries lead power was the major raw material for him. It is impressed upon that Shri Laxman Barfa has admittedly purchased lead powder from his brother who got manufactured it from the Appellant on job work basis, for use in his factory for manufacture of batteries. His factory was not registered with the Central Excise Department shows that it was a SSI unit.
3. It is submitted that Commissioner (Appeals) has failed to observe the contradictions in the statement of Shri Laxman Barfa and has wrongly relied thereupon to confirm the demand of even Rs. 12,17,012/- against the appellant. Learned Counsel has also submitted that there is otherwise no tangible evidence against the appellant which may prove the alleged clandestine clearance by the appellant. Order is accordingly prayed to be set aside. Learned Counsel has laid emphasis upon the decisionS of this Tribunal in the following cases :-
1. M/s Prem Jain Ispat Udyog Pvt. Limited v. CC (Prev.) Jaipur Final Order Nos. 54473-54476/2017, Passed by CESTAT (Delhi) 2 E/ 52653/2019
2. Surya Wires Pvt Ltd. vs CC CE & ST Raipur [2021 (376 ELT 550 (Tri-Del)]
3. Pahwa Chemicals Pvt Ltd. vs CCE, Delhi [2005 (189) ELT 257]
4. Continental Foundation Joint Venture vs. CCE Chandigarh [2007 (216) ELT 177 (SC)]
4. Learned Counsel has also assailed the order on the ground of wrong invocation of extended period of limitation by issuing the impugned show cause notice. Reliance has been placed on the decision of Hon'ble Apex Court in the case of Continental Foundation Joint Venture vs CCE, Chandigarh reported as (supra). With these submissions, learned Counsel has prayed that order under challenge be set aside and appeal to be allowed.
5. Per contra learned Departmental Representative has submitted that the demand proposed by the show cause notice was of Rs.1.38 cr and was confirmed by Original Adjudicating Authority. Commissioner (Appeals) has been meticulous enough to appreciate the evidence on record and has held that there is no evidence on record that the appellant has sold the lead powder into the market or Shri Laxman Barfa procured from the different supplier. Accordingly major amount of demand was dropped. The demand of Rs. 12,17,012/- is rightly been confirmed based on various statements precisely of Shri Laxman Barfa, proprietor of Mackson Batteries where he had admitted the quantity of job work and Lead powder despatched by the appellant to Mohan Lal Barfa / his brother who was also the trader and running another industry named AGM Industries. It has been held that exemption as provided by Notification No. 83/1994 CE dated 11.4.1994 is fully available to the appellant for the reason that substantial conditions of the said notification that the job work goods should be sent back to the factory of raw material supplier had not been fulfilled in case of raw material supplied by Shri Mohan Lal Barfa. It is impressed upon that the 3 E/ 52653/2019 above said detailed discussion, there is no error committed by the Commissioner (Appeals) while confirming the demand of Rs.12,17,012/-. Appeal is accordingly prayed to be dismissed.
6. After hearing the rival contentions and perusing the record, the only controversy to be adjudicated appears to be:
"Whether the substantial condition for the exemption notification No. 83/94-CE dated 11.4.1994 has been complied with by the appellant with respect to the raw material supplied by Shri Mohan Lal Barfa."
For the purpose, foremost the notification is perused. It reads as:
"Job work -- Exemption to goods specified in the SSI Exemption Notification No. 1/93-C.E., if manufactured on job work basis- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods:-
(i) of the description specified in the Annexure to the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2003-Central Excises, dated the 1st March, 2003 and
9./2003-Central Excise dated 1st March, 2003]; or
(ii) falling under heading 3904 relating to plastic material commonly known as polyvinyl chloride compounds (PVC compounds) and goods falling under heading 8413 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986].
(iii) Falling under tariff item 3901 30 00 of the First Schedule, to the Central Excise Tariff Act, 1985 (5 of 1986) relating to material commonly known as Ethylene vinyl acetate copolymers (EVA compounds)] (hereinafter referred to as the specified goods ) manufactured in a factory as job work, from the whole of the duty of excise leviable thereon, which is specified in the said Schedule, subject to the condition that the supplier of the raw materials or semi finished goods gives an undertaking to the proper officer having jurisdiction over the factory of the job worker.
(a) that the specified goods received from the job worker shall be used in the factory of such supplier in or in relation to the manufacture of specified goods which are exempted from the whole of the duty of excise 4 E/ 52653/2019 leviable thereon under the aforesaid notification; or goods falling under headings 6401 to 6405, cooking or heating apparatus of a kind used for domestic purposes, non-electric, and parts thereof, of copper falling under sub-heading 7418 19 or 7419 99, headings 8436,8437, 8714 or 9608 or tariff item 7321 90 00 heading 8424 (except mechanicl appliances which are not of a kind used in agriculture or horticulture), tariff items 8481 8041 8481 90 10, drawing and mathematical instrucments falling under sub heading 901720 or tariff items 8486 40 00 or kerosene pressure lanterns and parts thereof including gas mantles for use in kerosene pressure lanterns falling under heading 9405 of the said Schedule, as the case may be; and ]]
(b) that in the event of his failure to do so, he undertakes to pay excise duty, if any, payable on such goods, but for the exemption contained in this notification, as if such goods were manufactured by the said supplier and sold on his own account :..."
Perusal makes it clear that the exemption is available to job worker only if :
i) The supplier of the raw material/semi finished goods gives the required undertaking to the proper officer of Central Excise having jurisdiction over the factory of the job worker.
ii) The supplier is a manufacturer and uses the goods received after job work for manufacture of goods which are exempted vide Notification No 8/2003 CE or 9/2003-
CE both dated 01.03.2003 as amended.
iii) The supplier undertakes to pay the duty in the event of failure to use the goods as mentioned at S.No ii above.
7. Though the learned Counsel for the appellant has mentioned that the appellant as job worker had resent the job work goods to the factory of Shri Mohan Lal Barfa itself, but the perusal of the record shows that the Commissioner (Appeals) has based his findings on the basis of statements recorded at the stage of investigation as follows:
Shri. Laxman Barfa, Proprietor of Mackson Batteries, in his statement dated 20.12.2013 has stated that he was 5 E/ 52653/2019 manufacturing batteries and lead powder was his major input and that he has never got any job work done from the Appellant. He also stated that he had purchased the lead powder from the Appellant.
In his another statement, 20.03.2014, he admitted that his brother, Mohanlal Barfa had purchased battery scrap from him which was sent directly to the factory of the Appellant for job work and that Mohanlal was doing trading of lead powder and he purchased lead powder from AGM. He also admitted that he had not purchased lead powder from the appellant.
Further, in his cross examination dated 20.09.2017, Shri Laxman Barfa had stated that had never purchased lead powder from the Appellant nor got any job work done through them. He admitted that brother, Mohanlal Barfa used to purchase battery scrap from him and used to sent to the Appellant for manufacture of lead powder on job work. He confirmed that his brother was doing trading of lead powder and that name of firm is 'AGM'. Further, he stated that he had purchased lead powder from his brother from time to time for use in his factory for manufacture of batteries.
In this regard, I find that Shri Laxman Barfa, is owner of the factory named 'Makson Batteries' for manufacture of batteries. Lead powder was major raw material for him for battery manufacture. He has admitted that had purchased lead powder from his brother who got manufactured it from the Appellant on job work basis, for use in his factory for manufacture of batteries. Since his factory was not registered with the Central Excise Department, it shows that it was a SSI unit.6
E/ 52653/2019 So as per the deposition of Shri. Laxman Barfa during the cross examination, it is clear that he has sent the battery scrap, which was sold to his brother Mohanlal Barfa, directly to the factory of the Appellant for job work and used to purchase the lead powder from his brother, Mohanlal Barfa which he got produced through the Appellant, out of above scrap, on job work basis. He also admitted its further use in manufacture of batteries in his factory.
Shri Mohanlal Barfa, Brother of Laxman and Proprietor of 'AGM', in his statement dated 27.3.2014 has stated that he used to purchase the battery scrap from Makson Batteries and used to get it converted into lead powder on job work basis by sending it directly to the Appellant and that he has sold the lead powder to Makson Batteries and other traders. "
8. These observations are perused as correct. Accordingly, I do not find any infirmity in the conclusion arrived at by the Commissioner (Appeals) that Shri Mohan Lal Barfa had sent scrap to the appellant and received back lead powder manufactured on the job work basis which has been sold to his brother Shri Laxman Barfa and other traders. Learned Counsel for the appellant could not produce any such documents which may prove that job work goods had been sent to the factory of Shri Mohan Lal Barfa itself to be used in or in relation to the manufacture of such specified goods as are exempted from whole duty of excise leviable thereon under Notification No. 8/2003.
9. Coming to the issue of inclusion of extended period of limitation, though the learned Counsel has impressed upon several case laws impressing upon that there was no suppression on the part of the appellant but it is observed that appellant was 7 E/ 52653/2019 entitled to SSI exemption only in terms of Notification No. 8/2003-CE and Notification No. 83/94. It has already been observed that substantial condition of said exemption notification has not been duly complied with by the appellant. Absence thereof is opined to be correctly held as suppression on the part of the appellant extending the Department to invoke the extended period of limitation.
10. As a result of above discussion, no infirmity has been found in the order under challenge. The same is hereby upheld. Resultant thereto, the appeal stands dismissed.
( DR. RACHNA GUPTA ) MEMBER (JUDICIAL) ss 8