Customs, Excise and Gold Tribunal - Delhi
M/S. Tisco vs Cce,Jamshedpur on 27 April, 2001
Equivalent citations: 2001(132)ELT398(TRI-DEL)
ORDER
G.R. Sharma
1. This is an appeal against the conformation of demand of Central Excise Duty amounting to Rs. 44,78,167.02 and imposition of penalty of Rs. 5 lakhs.
2. The facts of the case in brief are that the appellant is engaged in the manufacture of Iron & Steel products. It has another manufacturing unit o Growth Shop in Tejpur about 8 kms. away. In the Growth Shop the appellant manufacturers certain equipment and components and claims manufacture of equipment and components for repairs and maintenance of its machineries and component parts thereof required for captive use. The appellant manufacturers components and parts and cleared some of them after paying Cental Excise Duty. However, some parts are brought to its main plant stating that they were meant for repairs and maintenance of the main plant. The appellant availed the benefit of exemption Notification No. 281/86 dt. 24.4.86. There SCNs. were issued to the appellant asking them to explain as to why duty should not be demanded from them under Rule 9(2), 196(1) of the Central Excise Rules read with proviso to Section 11A(1) of the Cental Excise Act as the benefit of Notification no. 281/86 dt. 24.4.86. was not available to them and why penalty should not be imposed. The appellant had applied for permission under Rule 192 of Cental Excise Rules, 44 for getting parts of loco, wagon, rolling stock falling under Chapter 86 of the Schedule from the growth shop without payment of duty claiming the benefit of Notification No. 281/86. Permission was refused as the products were not found to be covered under the provisions of this Notification.
3. Shri Ashok Sagar, Ld. Counsel appearing for the appellant submits that he is not pressing any other issue except the issue on limitation. Ld. Counsel submits that there was no mis-declaration on the part of the appellants as the appellant had declared the goods being brought as also obtained the L-6 Licence. He submits that the appellant had informed the Department the exact description of the goods that were being brought from the Growth Shop to the main plant. He submits that these goods were being used in the wagons and wagons were being used for carrying heavy ingots from one place to the other. Ld. Counsel submits that there was no mis-declaration what-soever. He submits that the Department was fully aware of the facts as some SCNs on the same issue for the same period were first issued by the Supdt. which were subsequently followed by issue by SCNs by the Commissioner. He submits that since there was no misdeclaration, therefore, the question of involving longer period did not arise. He, therefore, prays that on this count alone, the demand is time barred and prays that the demand may be set aside and consequently, the penalty should also.
4. Shri Ashok Mehta, Ld. DR appearing for the respondent Commissioner submits that the applicant had misdeclared the classification of the goods and had also misdeclared that they will be required for maintenance of the machinery installed in the plant. He submits that misdeclaration was complete.
Ld. DR also submits that the demand has been raised under Rule 196 of Central Excise Rules,44. He submits that Rule 196(1) is a self-contained code for demand of duty in cases where goods are not properly accounted for. He submit that the SCN alleges breach of Rule 196. The demand has been confirmed under Rule 196 read with other provisions of the Act and Rules. He submits that since Rule 196 is a self-contained code, it is not necessary to prove wilful misstatement or suppression with intent to evade payment of duty. In support of his contention he cites and relies upon the decision of the Apex Court in the case of IFFCO Ltd. vs CCE reported in 1989(41)ELT. 474 wherein he submits that the majority decision of the Tribunal in the case was approved by the Hon'ble Supreme Court by dismissing the appeal filed by IFFCO Ltd. Ld. DR submits that the Appellate Tribunal in his order in question had held that demand of duty when made under specific provision in Rule 196, there is no warrant to import limitation of Section 11A of the Central Excise Act for raising the demand under Rule 196 as such demand was not hit by limitation even if made after a period of two years. ld. DR, therefore, prays that the impugned order may be upheld and the appeal may be rejected.
5. We have heard the rival submissions. We note that the only issue agitated before us was on limitation. The main contention of both the sides was whether thee was misdeclaration or mis-statement or suppression leading to evasion of duty whereas the appellant submitted that there was no suppression or mis-statement or any intention to evade payment of duty. The contention of revenue was that the appellant had mis-declared the goods as forthe purpose of maintenance and repairs of the machinery installed and also by mis-classifying the goods. We note the contention of the Ld. DR is correct in as-much as the goods were being removed without payment of duty though they were not used for maintenance and repairs of machinery installed in the factory. Wagons cannot be termed as installed machinery in the factory. The Hon'ble Patna High Court in the case of TISCO vs UOI reported in 1998(33)ELT.207 held that second proviso to Notification No.118/75 s amended by Notification, if the goods manufactured in a factory were complete machinery meant for production or processing of goods even if they were intended for use in the same factory in which they were manufactured or in any other factory of the same manufacturer; that the cranes were meant for placement of heavy goods from one place to another, thus they were meant for production and processing of goods. So also can be said about the wagons. Wagons cannot be termed as machinery installed.
We also note that SCN alleged breach of Rule 196. Demand has been confirmed under Rule 196 among other rules/Act. We find that this Tribunal in the case of IfFCO Ltd. by majority decision held that Section 11A of the Central Excise & Salt Act, 44 cannot be made applicable to the facts of this fact in-as-much as the provisions of Chapter X(SIC) are self contained procedure and Rules set out under this Chapter are for application to an exception carved out of the main rule for levy of duty at standard rate forthe purpose of sub-serving broader industrial interest in the country. We note that this decision of the Tribunal has been confirmed by the Apex Court as is evident form 1988(101)ELT.A.189. We find that in this ruling of the Apex Court the ingredients of mis-statement, suppression, collusion or fraud are not necessary and therefore, even if these elements were not available, the demand can be inforced for a period beyond six months. In this case, therefore, both under proviso to Section 11A(1) and under Rule 196, limitation is not applicable, therefore, the contention of the appellant that the demand is time barred, is rejected. The impugned order is upheld and the appeal is rejected.