Custom, Excise & Service Tax Tribunal
Bharat Coking Coal Ltd vs Commissioner Of Central Excise, Ranchi on 17 December, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. E/645/04
(Arising out of Order-in-Original No. 47/MP/Commr/Denovo/2003-04 dated 15.06.2004 passed by the Commissioner of Central Excise, Ranchi.
FOR APPROVAL AND SIGNATURE
DR. D.M.MISRA, HONBLE (JUDICIAL) MEMBER
HONBLE SHRI H.K.THAKUR, MEMBER (TECHNICAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Bharat Coking Coal Ltd
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Ranchi
Respondent (s)
Appearance:
Shri Rajeev Agarwal, C.A, for the appellant (s) Shri S. S. Chatterjee, Supdt, (AR) for the Revenue (s) CORAM:
DR. D.M.MISRA, HONBLE (JUDICIAL) MEMBER Honble Shri H.K.Thakur, Member(Technical) Date of Hearing/Decision: 17.12.2015 Date of Pronouncement: 17.12.2015 ORDER No. FO/A/75803/2015 Per Shri H.K.Thakur The present appeal has been filed by appellant M/s Bharat Coking Coal Ltd (A Public Sector Undertaking) against OIO No. 47/MA/Commr/Denovo/2003-04 dt 15/6/2004 passed by Commissioner of Central Excise Ranchi in a remand proceedings. Under this OIO Adjudicating authority has denied the benefit of Exemption Notf No. 182/87-CE dt 10/7/87 and confirmed a demand of Rs. 1, 58, 38,712/- against the appellant. Besides a penalty of Rs. 10 lakh has also been imposed upon the appellant under Rule-9 (2) of the erstwhile Central Excise Rules- 1944 read with Rule- 173 Q of the said Rules.
2. Sh. Rajiv Agarwal (CA) appearing on behalf of the appellant argued that the period of dispute is from 1/3/1986 to 27/7/1988. That appellant is manufacturing Coal Tubs in the mines. That these Coal Tubs before and after the above disputed period were exempted and appellant was under the bonafide belief that during the intermediate disputed period also their product must have been exempted. Learned CA appearing on behalf of the appellant fairly conceded that benefit of exemption Notf No. 182/87-CE dt 10/7/87 was not admissible to them but extended period can not be invoked in their case as per the following case laws.
(i) Ultra Flax (P) Ltd Vs. CCE Faridabad [2004 (167) ELT 354 (Tri-Del)]
(ii)Western Coal Fields Ltd Vs. CCE Nagpur [2003 (161) ELT 768 (Tri)]
(iii) CCE Chennai Vs Chennai Petro. Corporation Ltd [2007 (211) ELT 193 (S.C)]
(iv) CCE Vs Nepa Ltd [2013 (298) ELT 225 (Tri)]
(v) Burn Standard Co. Ltd Vs. CCE Kolkata [2011 (267) ELT 193 (Tri.)].
2.1 It was further agued by the learned CA that even if the time bar aspect was conceded before the CESTAT earlier the same can be raised again during the present proceedings in view of the Apex Courts decision in the case of Union of India Vs Madhumilan Syntex Ltd [2006 (195) ELT 141 (S.C.)].
3. Sh. S. S. Chatterjee Supdt (AR) appearing on behalf of the Revenue argued that there were only two issues regarding admissibility of Notf No. 182/87-CE and point of limitation was not pressed by appellant before this bench while passing order dt 1/5/2000 in Appeal No. E (SB)-621/92. Learned AR made the bench go through Para-6 of the said order dt 1/5/2000.
4. Heard both sides & perused the case records. The issues involved in the proceeding before this bench while passing order dt 1/5/2000 was duty liability on the coal tubs manufactured by the appellant and admissibility of credit. Following order was passed by this bench while remanding the case back to the Adjudicating authority:-
2.Arguing on the appeal Dr. Samir Chakraborty, ld.? Advocate submits that the appellants are purchasing various parts namely coal tubs without wheel, wheel and axles, C & D links, tub blocks etc. and assembling these parts in their workshop/colliery. He submits that such process of fitting and assembling of component of coal tubs cannot amount to a manufacturing activity within the meaning and scope of Section 2(f) of Central Excises Act, 1944 inasmuch as no new product is brought into existence by such process of fitting. This contention of the appellants has not been accepted by the Commissioner on the ground that the process undertaken by the appellants results in emergence of new product which is classifiable under sub-heading 8606.00 of Central Excise Tariff Act, 1985. Shri Chakraborty has relied upon the Tribunals decision in the case of Dalmia Industries Ltd. - 1999 (112) E.L.T. 305 (Tribunal) wherein it was held that buying of various articles and selling them in a combined cover under a brand name does not amount to manufacture.
3.After hearing Shri R.K. Roy, ld. JDR we do not feel? convinced on the arguments of ld. Advocate on this point. The activity undertaken by the appellants is not a simple process of buying of various items from the market and connecting them with each other, as was the case relied upon by the ld. Advocate. We find that the appellants are purchasing the various articles from the market which articles cannot be called, by any stretch of imagination, complete coal tubs. Neither the unwheeled coal tub, nor wheels, nor axels, nor tub blocks can be called a complete coal tubs or can be put to use to which a wheeled coal tub can be put to. The resultant product which emerges after the completion of the processes undertaken by the appellants is a wheeled coal tub which is different form the various parts etc. purchased by the appellants from the open market. Merely because the appellants are not themselves manufacturing the parts and are buying the same from the market will not turn the activity undertaken by them into a non-manufacturing activity. Accordingly we fully agree with the findings of the Commissioner that fitting and assembling of separately identifiable products results into an altogether separate identifiable final product having a specific identity, name and use. Accordingly we reject the said plea of the appellants.
4.It has also been argued before us that the demand? confirmed by the Commissioner also includes the demands in respect of the repaired coal tubs. Dr. Chakraborty has argued that the coal tubs so manufactured by them need continuous repairing. Such a repairing activity cannot be held to be a process of manufacture and the demand cannot be raised on the same account. We agree with the above submission of the ld. Advocate. No duty is leviable on the repaired items.
5.Dr. Chakraborty has raised an alternative plea that? the benefit of exemption Notification No. 182/87 was available to them in respect of the coal tubs, so produced in the workshop and used in the mines w.e.f. 10-7-1987, the date of issuance of the said notification. For this proposition he relies upon the Tribunals decision in the case of Central Coalfield Ltd. v. C.C.E., Jsr. - 1997 (23) RLT 269 (CEGAT) wherein benefit was extended to the appellants in that case. However, he fairly conceeds that the said notification was not claimed before the Commissioner. He also submits that in case of confirmation of demand of duty on their final product, the appellants are entitled to avail the benefit of Modvat credit of duty paid on the inputs. We agree with both the above submissions of the appellants, but as the said points were not before the Commissioner we remand the matter to him for fresh decision on the point of availability of exemption under Notification No. 182/87 as also on the point of neutralising the duty demand to the extent of Modvat credit paid on the inputs, if otherwise available.
6.As the point of limitation has not been pressed? before us by Dr. Chakraborty in view of the Tribunals judgement in the case reported in 23 RLT 269 we are not passing any orders on the same. The appeal is thus allowed by way of remand for fresh decision in the light of the observations made in the preceding paragraphs. 4.1 During the course of hearing before us appellant has conceded the inadmissibility of Notf No. 182/87-CE & Modvat Credit. Appellant did not press on the point of limitations before this bench when the remand order dt 1/5/2000 was passed and the remand directions were limited to the observations made in that order. Time bar aspect was also not raised before the adjudicating authority by the appellant and no findings on that aspect could be given by the Adjudicating authority. It is thus observed from the case records that appellant did not press on the time bar aspect in the earlier proceedings before and also did not raise the same before the adjudicating authority. Appellant is a public sector undertaking and it is not ethical on their part now to agitate the time bar aspect afresh after conceding the same before us in the earlier proceedings. Reliance by the appellant on the Apex Courts case law in the case of Union of India Vs Madhumilan syntax Ltd (Supra) is misplaced because the order passed by the Apex court was as a result of a writ petition against an order of the lower authorities without affording any opportunity to the assessee. In the present case before us the concession was given after the adjudicating authority decided the case after following the principles of natural justice and the case was argued at length before this bench before remand order dt 1/5/2000 was passed. Therefore, the ratio laid by Honable Apex Court is not applicable to the present factual matrix when appellant is a Public Sector undertaking and principles of natural justice have not been violated earlier. In view of the above observations appeal filed by the appellant on the grounds of limitations again, when not even agitated before the Adjudicating authority in remand proceedings, can not be entertained & is required to be dismissed.
5. So for as imposition of penalty upon the appellant is concerned it is observed that appellant has relied upon the case laws at CCE Indore Vs Nepa Ltd (Supra), CCE Chennai Vs Chennai Petro. Corporation Ltd (Supra) and Burn Standard Co. Ltd Vs CCE Kolkata (Supra) etc. A perusal of these case laws convey that in these case laws either the assessee was a registered unit or penalty was imposed under Sec 11 AC of the Central Excise Act 1944. However, in this case it is a case of imposing penalty under Rule- 9 (2), read with Rule-173 Q, of the erstwhile Central Excise Rules 1944. Appellant being a large company did not bother to check whether duty liability got attracted during the relevant period. It is now a well understood legal proposition that ignorance of law is no excuse. However, looking to the facts on record and appellant being a Public Sector Undertaking we are of the opinion that penalty of Rs 10 lakh, imposed upon the appellant, is excessive we accordingly reduce this penalty from Rs. 10, lakh to Rs. 10,000/- (Ten thousand only)
6. Appeal filed by the appellant is allowed only to the extent indicated in Para-5 above.
(Operative part of the order was pronounced in the open court.) (D.M.MISRA) (H.K. THAKUR) JUDICIAL MEMBER TECHNICAL MEMBER Tushar kumar 2 Appeal No.E/645/04