Customs, Excise and Gold Tribunal - Delhi
M/S. Bharat Seats Ltd. vs Commissioner Of Central Excise, New ... on 15 May, 2001
Equivalent citations: 2001(76)ECC371
ORDER
Jyoti Balasundaram
1. The above appeals involve common issues relating to eligibility of benefit of exemption in terms of Notification No. 217/86 on steel bins and trollies manufactured by the assessee herein etc. and are hence heard together and disposed of by this common order.
E/1593/95-B In this case the Commissioner of Central Excise has confirmed the duty demand of Rs.1,84,125.18 on 139 tollies, 30 bins and 20 pallets got manufactured from the job worker M/s. Sreeja Engineering Works, Kapashera, New Delhi during the period September 1989 to April, 1993 and has also imposed a penalty of Rs.25,000/- upon the appellants who are manufacturers of motor car seats and parts thereof.
E/134/99-B
2. This is an appeal by the Revenue against the order of Commissioner of Central Excise (Appeals) who has extended the benefit of Notification No. 217/86 to iron and steel trollies and bins got manufactured by the assessee , following the ratio of the decision of the Tribunal in the case of Kinetic Honda Motor Ltd. vs. CCE, Indore [1997 (23) RLT 371]. The department seeks restoration of the order of the Commissioner who had confirmed the duty demand of Rs.1,26,111/- and (SIC) penalty of Rs.1 lakh upon the assessee.
3. We have heard Shri Naveen Mullick, ld. Advocate and Shri Ashok Kumar ld. DR.
4. The contention of the assessee is that the goods in question on which duty has been demanded were manufactured by M/s. Sreeja Engineering Works who are independent contractors and therefore, no duty liability can be fastened upon the appellants. The second contention is that even if it is held that duty is payable by M/s. Bharat Seats Ltd., the demand is barred by limitation since the show cause notice is dated 3.8.94 and entire demand is beyond the normal period of limitation of six months and the assessees are not guilty of any suppression of the fact of manufacture of the disputed items in their factory as they were under the bonafide belief that it was not they, but the job worker who was liable to pay the duty on the goods.
5. We have perused the impugned order dated 14.7.95 of the Commissioner of Central Excise. We find that the nature of fabrication job as described in the bills raised by M/s Sreeja Engineering Works clearly shows that they are service, jobs carried out by hired labour and not by any independent manufacturer or fabricator. The fabrication and manufacture was admittedly undertaken within the factory premises of M/s. Bharat Seats Ltd. and there is nothing on record to establish that the machines, tools, welding equipment and other (SIC) were brought by the job workers to the factories of the assessees. Further, there is nothing on record to show that M/s. Sreeja Engineering Works were also doing the job of fabrication of bins, trollies for others also. The assessee has also not filed any copy of the job orders bringing out the real nature of the contract between them and the job workers. In the above circumstances, the contention of the assessee that M/s. Sreeja Engineering Works was an independent manufacturer and that the transactions between them were on principal to principal basis, stands unsubstantiated, We therefore agree with the findings of the Commissioner that M/s. Bharat Seats Ltd. are the manufacturers of the goods. The assessee did not contest the classification of the goods under sub-heading 9403.00 of the Schedule to the Tariff. Hence duty at the appropriate rate under this heading is liable to be paid by the appellants. The plea of bonafide belief also has no force in the light of our finding that M/s. Sreeja Engineering Works were hired labour for M/s. Bharat Seats Ltd. Hence, the extended period of limitation is available to the Department. We, therefore, upheld the duty demand and penalty and reject Appeal No. E/1593/95-B.
6. We now take up the appeal of the Revenue. In recent decision of the Larger Bench of the Tribunal in the case of CCE vs. Surya Roshni reported in 2001 (128) ELT 293, it had been held that material handling equipments are capital goods used for producing or processing of any goods used for manufacture of the final product and hence entitled to the credit under Rule 57Q of the Central Excise Rules. This decision relies upon the decision of the Larger Bench in the case of Jawahar Mills vs. Collector [1999 (108) ELT 43]. Therefore, they are excluded from the definition of inputs under the Exclusion clause of Notification No. 217/86.
7. Viewed in the above light, we held that the benefit of exemption under Notification No. 217/86 is not admissible to the goods in question, set aside the impugned order of the Commissioner (Appeals) and allow the appeal of the Revenue. However, the penalty is reduced to Rs.20,000/- (Rupees twenty thousand only).
8. Appeals are disposed of as above.
(Pronounced in the Court)