Customs, Excise and Gold Tribunal - Bangalore
Bhoruka Gases Ltd. vs Cce on 8 March, 2000
Equivalent citations: 2000(93)ECR302(TRI.-BANGALORE)
ORDER V.K. Ashtana, Member (T)
1. To get this appeal heard, the appellants are required to pre-deposit the following amounts:
a) Duty of Rs. 21,62,882/- for the period between January 1994 to December 1996 confirmed under proviso to Section 11A;
b) Penalty of Rs. 21,62,882/- under Section 11AC;
c) Further penalty of Rs. 2 Lakhs under Rule 173Q of the Rules and
d) Interest of duty demanded under Section 11AB of the Act.
all of which have been confirmed by Order-in-Original No. 19/99 dated 30.9.1999.
2.Briefly the issue concerns determination of the issue whether the activities undertaken by the present appellant amount to manufacture of cryogenic tanks for storage of liquified nitrogen gas at the premises of the buyers who purchased the said gas for industrial use in their premises. While the Order-in-Original holds that the appellants have taken certain steps which amount to manufacture of these tanks, learned Advocate Shri G. Sampath submits that some of these tanks were imported from abroad while some were procured from M/s Bharat Heavy Plates and Vessels Ltd. (BHPV) a public sector undertaking. He submits that these tanks were purchased in a condition which was complete in all respects for the intended use as can be seen from the:
a) Catalogue accompanying the imported items.
b) The drawings which are available in the contract with M/s BHVP.
Learned Advocate submits that the learned Commissioner has also erred in distinguishing between the cold convertors and cryogenic tanks which are one and the same. He submits that the only installation activity undertaken at the buyers site was to connect these tanks through pipelines to the input of the buyers plant. These pipes were also bought out items. He denies that any valve regulator, pressure regulator, pressure gauges etc., as noted in the order impugned were fitted on to the tanks by them as the entire system was supplied by either the foreign seller or the PSU unit noted above.
3. Learned Advocate further submits that they have no such technical capacity to do such manufacturing activity. He also submits that the invokation of mandatory penalty under Section 11AC would not be applicable in this case as the period involved is mostly prior to the availability of the said section on the statute. A similar submission is also made with respect to Section 11AC for payment of interest. He also submits that the appellants are facing severe financial hardship as they have incurred a loss of Rs. 274 Lakhs for the period ending 31.3.1999 as can be seen from the balance sheet on record. He submits that since they have demonstrated a very strong case on merits as well as financial hardship, therefore, the entire amount to be pre-deposited be waived and stayed.
4. Learned DR, Shri S. Kannan submits in para 19 of the Order-in-Original impugned the Commissioner clearly states that the present appellants had themselves affixed during this installation period, the following:
Control regulating and measuring devices like valves, taps, pressure gauges, level indicators so as to make the liquified gas vapourise solely under the influence of atmospheric temperature by passing through a coil attached to the inner valve of the outer shell.
He, therefore, submits that the order makes it clear that the condition in which these tanks were received either on import or from M/s BHVP was mere double shelled tanks and thus by itself could not have been used for storage of liquified nitrogen. To enable them to become complete for such storage of liquified nitrogen and its removal as a gas under atmospheric pressure, all these pressure regulating devices and evaporative systems had to be installed and were so installed by the appellant themselves. Therefore, there is no legal error on this point and the charge of manufacture stands proved. He, therefore, submits that some amounts should be ordered to be pre-deposited.
5. We have carefully considered the submissions and records of the case. As the matter lies on a short compass, we order waiver and stay of the amounts to be deposited and consider the appeal itself.
6. On consideration of these arguments as well as records of the case we find that the matter involves a correct determination of the facts of the case. These facts would pertain to the condition in which the goods were actually received after import as well as from BHVP. Determination of these would have to take into account the evidence which is available on record and which was put-forth by the appellants. This evidence could be in the form of catalogues of the foreign manufacturer as well as drawings appended to the contract between the present appellants and the manufacturers of these alleged tanks M/s BHVP. On a perusal of the Order-in-Original impugned, we find that the Commissioner has not adverted to a detailed consideration of these evidences at all. He has merely concluded that pressure regulating devices and convertor devices were installed by the present appellants. In view of this we find that the Order-in-Original is a non-speaking order having not considered in detail these evidences on record. The question of facts vis-a-vis the technical literature on record has necessarily to be considered in detail and findings recorded by the original authority. The Tribunal cannot be expected to do this exercise, which is to be done by the original authority. Therefore, we have no other alternative but to set aside the Order-in-Original impugned and remand the matter for de novo consideration of the entire issue by the learned Commissioner in terms of directions noted above.
7. The appeal is allowed by way of remand accordingly and the stay application is also disposed of as per above terms.
(Pronounced and dictated in Open Court).