Custom, Excise & Service Tax Tribunal
Forbes Aquatech Ltd vs Commissioner Of Central Excise And ... on 6 June, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order .20947 / 2014 Application(s) Involved: E/Stay/920/2012 in E/1313/2012-DB Appeal(s) Involved: E/1313/2012-DB [Arising out of OIO No.11-2012 dated 25/02/2012 passed by CCE, Bangalore-II ] FORBES AQUATECH LTD., SY.NO.36/4, ANNEXE BULIDING, 4TH CROSS, NEAR HENNUR RING ROAD, RAGHAVENDRA NAGAR, HRBR LAYOUT, BANGALORE-560043 Appellant(s) Versus Commissioner of Central Excise And Customs BANGALORE-II NULL PB 5400 CR BUIDING...QUEENS ROAD, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Shri Anil Kumar and Shri Cherian Punnoose, Advocates A.K.B. ASSOCIATES #211, COMMERCE HOUSE, 9/1, CUNNINGHAM HOUSE, 9/1, CUNNINGHAM ROAD, BANGALORE - 560052 KARNATAKA For the Appellant Shri S. Teli, Deputy Commissioner(AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 06/06/2014 Date of Decision: 06/06/2014 Order Per : B.S.V.MURTHY This is an appeal filed by M/s. Forbes Aquatech Ltd., the appellant, against the OIO No.11/2012 dt. 25/02/2012 passed by the Commissioner of Central Excise, Bangalore-II Commissionerate, Bangalore, by which he has demanded central excise duty under Section 11A(1), imposed penalty under Section 11AC, and demanded interest under Section 11AB of the Central Excise Act, 1944. The demand has been confirmed on the ground that the appellants have manufactured resin chamber falling under CETH 8421 21 90 and 8421 21 10 and cleared the same without payment of duty.
2. Appellants are engaged in the manufacture of water filters/purifiers which function without electricity and works on the principle of gravity. The water filter has a cartridge and the cartridge has two chambers viz. upper chamber and bottom chamber. Upper chamber of the cartridge housed the carbon block, the lower chamber housed a plastic container which holds the resin and the appellants referred it as HP resin chamber. Taking a view that filling the resin into the plastic container and transferring it to the sister unit of the appellant as amounting to manufacture, duty has been demanded as mentioned above.
3. The issues for consideration which arise are and our observations are as follows:-
a. Whether the activity of filling up of duty paid resin into duty paid plastic container amounts to manufacture. It was the submission that this does not amount to manufacture at all according to the appellants. It was submitted that Commissioner has accepted in his order that the item in dispute is a replaceable part of the filter machinery and it was submitted that the replaceable kits of which the product in dispute is a part were exempted vide Notification No.25/2008-CE dt. 28/04/2008 and therefore the disputed goods are exempt. We are also not able to agree with this submission since the present product is a part of replaceable kit and cannot be considered as replaceable kit.
As observed by the learned Commissioner, the resin is filled into a plastic container and the emerging product HP resin chamber is part of the water filter and as a distinct identity character and use. Therefore, prima facie, we do not find any merit in this submission.
b. The next submission made by the learned counsel was that the product is not marketable. We find on going through the records and after hearing the learned AR that there is no evidence of sale of this product in the market at all. It is also not the case of the Revenue that appellants sold the product. In fact, it is only a transfer of the product from one unit to the other. In the absence of any evidence to show marketability and considering the fact that appellants are filling the resin in a plastic container, prima facie, we find that appellants may have a case on the ground of marketability. Therefore, at this stage we consider that no predeposit is required. At the same time, there is no appropriate consideration of the marketability issue at all. In the absence of a sale of the product and in the absence of any evidence of marketability of the product, in terms of definition of goods and in terms of requirements of Section 3 for charging Central Excise duty, whether the Department has a case or not, in our opinion, requires further consideration. Further it was also submitted that the product is exempt from payment of duty under Notification No.25/2008-CE also requires consideration by the Commissioner and learned counsel fairly agreed that this notification was not cited before the Commissioner for consideration. Therefore on this ground also the matter requires fresh consideration by the Commissioner. The learned counsel also relied upon the Circular No.464/30/99 dt. 30/06/1999. All these aspects are required to be considered and therefore it was agreed by both the sides that it would be appropriate to remand the matter at this stage itself. Further learned AR, while agreeing that the matter may be remanded, submitted that the appellant should be put to terms. This is on the ground that during the year 2007-08, the appellants had not calculated the duty payable under CAS4 properly and they had omitted the 10% to be added to the cost of production. Consequent to this, there is a demand of Rs.1,70,945/-. Since the amount involved is small, the learned counsel submitted that he has no objection to deposit this amount if the matter is being remand for fresh consideration.
4. In view of the above discussion, the appellant is directed to deposit an amount of Rs.1,70,945/- (Rupees one lakh seventy thousand nine hundred and forty five only) within eight weeks and report compliance to the Commissioner who shall proceed to hear the matter afresh. We make it clear that he can decide the issue in accordance with law and our observations made hereinabove need not be taken into account or consideration.
(Operative portion of the order pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER Raja..
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