Customs, Excise and Gold Tribunal - Delhi
Darshan Metal Industries vs Cce on 28 May, 2002
Equivalent citations: 2002(82)ECC206
ORDER V.K. Agrawal, Member (J)
1. The issue involved in this appeal, filed by M/s. Darshan Metal Industries is whether Central Excise duty is leviable on Cold Rolled Pattas/Patties manufactured by them. Shri Bipin Garg, learned Advocate, submitted that the disputed demand is in respect of conversion of Hot Rolled Pattas/Patties into Cold Rolled Pattas/Pattis of stainless steel which has been clearly held by the Supreme Court in CCE v. Steel Strips Ltd. , as not amounting to manufacture of a new, excisable commodity; that the activities undertaken by the appellants are as under:
They purchase duty paid S.S. flats in respect of which they take Modvat credit; they cut these flats into small pieces which are hot rolled; that hot rolled pattas/patties are thereafter cold rolled which in turn are cut into circles, the trimmed circles, if sold, are cleared by them on payment of duty; that trimmed circles which are used by them for captive consumption in the manufacture of utensils are cleared again only after payment of duty even though such circles are chargeable to nil rate of duty under sub-heading 7222.50 of Schedule to the Central Excise Tariff Act; that hot rolled pattas/patties are chargeable to nit rate of duty; that the Adjudicating Authority under the impugned Order has confirmed the demand of duty and imposed penalty in respect of cold rolled strips cleared for manufacture of S.S. circles. He, further, submitted that the facts in the present matter are identical to the facts in the case of M/s. Jagat Sons Industries v. CCE, New Delhi-III wherein the Tribunal held as under:
In the instant matter before us there is nothing on record to show that a new and different goods has emerged having distinct name, use and character. The Appellants are availing of Modvat credit of duty paid on flats and clear part of the circles manufactured by them on payment of duty and part of the circles are captively consumed in the manufacture of S.S. utensils which are exempted from payment of duty. The Appellants are making payment of duty even in respect of circles which are captively consumed though duty is nil. Perhaps the duty is paid by them as they avail of Modvat credit of duty paid on S.S. flats. We find substance in the submissions of the Appellants that if any duty is held to be payable by them on cold rolled products the duty already paid by them has to be adjusted towards such duty payable.
2. The learned Advocate also submitted that the entire demand of duty is time barred as the show cause notice was issued on 11.7.2000 for demand the duty for the period 1.3.97 to 31.3.98; that the allegation in the show cause notice is that they had suppressed manufacture of production of S.S. utensils which are leviable to nil rate of duty; that in their classification list they had mentioned about the manufacture of S.S. utensils alongwith the fact that the said utensils are exempted from payment of duty; that the said classification list stands duly approved by the proper officer; that accordingly there has been no suppression of facts by them and the extended period of limitation is not invocable.
3. Countering the arguments Shri M.P. Singh, learned DR, submitted that even in respect of goods which are chargeable to nil rate of duty or are exempted from payment of duty these are required to be mentioned in the classification list; that they had not declared about the captive consumption of cold rolled strips for making utensils and as such they had suppressed the vital fact from the department. Finally he submitted that the duty paid by them on trimmed circles cannot be adjusted in respect of duty payable on cold rolled strips as held by the Tribunal in the case of Super Cassette Industries Ltd. v. CCE, Meerut , wherein it was held that duty paid on plastic components of Audio Cassette component under sub-heading 8523.12 of the Central Excise Tariff which was subsequently held to be not payable cannot be retained by the department as duty payable by manufacturer on plastic components.
4. We have considered the submissions of both the sides. It has not been rebutted by the Revenue that the facts of the present matter is similar to the facts in the case of Jagat Sons Industries (supra) wherein the Tribunal held that it cannot be claimed that there was suppression of any fact by the Appellants and the larger period of limitation is not invocable. The Tribunal further held that no penalty is imposable on the Appellants therein which was set aside. The Tribunal finally remanded the matter to the Adjudicating Authority to determine as to whether the process of cold rolling of hot rolled products amounts to manufacture and if such process is held to be amounting to manufacture and if any duty is payable, the duty already paid is to be adjusted against such duty payable. In the present matter also the Appellants have shown that in their classification list effective from 1.4.95 they had put a note wherein it was mentioned that they have installed hot, cold rolling machine and relevant machines for manufacture of utensils made out of duty paid S.S. flats. S.S. utensils are exempted from Central Excise duty and they were clearing S.S. utensils and scrap manufactured by captive consumption of S.S. circles. We observe from the perusal of the impugned Order that this fact has not been considered by the Adjudicating Authority while invoking larger period of limitation. As the facts are similar to the decision in the case of Jagat Sons Industries, following the ratio of the said decision, we set aside the amount of penalty and remand the matter to the Adjudicating Authority to determine as to whether the process of cold rolling of hot rolled products amounts to manufacture and whether the extended period of time limit is invocable for demanding the Central Excise duty. The Adjudicating Authority should also consider whether the duty already paid on S.S. circles captively consumed is to be adjusted against the duty payable, if any. The appeal is disposed of in these terms.