Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Pratisthan Alloy Casting P. Ltd on 2 March, 2011
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. E/3822/03 & E/CO-119/04
(Arising out Order-in-Appeal No. RK/108/AVR/2003 dated 15.9.2003 passed by the Commissioner of Central Excise (Appeals), Nagpur)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial)
Honble Mr. P.R. Chandrasekharan, Member (Technical)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the No
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication No
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Commissioner of Central Excise, Aurangabad
Appellant
Vs.
Pratisthan Alloy Casting P. Ltd.
Respondent
Appearance:
Shri S.M. Vaidya, JDR for the appellant None for the respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) Date of hearing : 02.03.2011 Date of decision : 02.03.2011 O R D E R No:..
Per: Mr. M.V. Ravindran, Member (Judicial) This appeal and Cross objection are filed against Order-in-Appeal No. RK/108/AVR/2003 dated 15.9.2003.
2. Revenue is aggrieved by the OIA which has set aside the OIO that confirmed the demand of duty on the assessee while assessees cross objection is against the finding recorded by the ld. Commissioner (Appeals) as regards limitation. Since the appeal as well as the cross objection are against the same OIA, we take them up together and dispose off by a common order.
3. Assessee is unrepresented. They have sent a request for deciding the case on the merits for which they have filed written submission. We have considered the said written submission.
4. The relevant fact that arises for consideration are that the appellants herein are manufacturers of casting and cast articles of other steel falling under Chapter 73 of Schedule of the CETA 1985. It was the revenues contention that the assessee herein had not filed a proper declaration regarding the correct description of the goods manufactured by them and they also availed ineligible benefit of exemption under Notification 223/88 dated 23.8.1988. The adjudicating authority after following the due process of law dropped the proceedings initiated by the show-cause notice. Aggrieved by the said order, Revenue preferred an appeal before the Commissioner (Appeals) on the merits of the case as well as on the limitation. Ld. Commissioner (Appeals) in the impugned order has upheld the OIO on the merits of the case but held against the assessee on the limitation.
5. Ld. DR would submit that the benefit of a Notification no. 223/88 will not be applicable to the assessee as the said Notification talks about exemption to cast and casting articles of alloy steel casting falling under Chapter 73.25. It is his submission that the steel/stainless steel and other alloy has been defined with separate characteristics and benefit of Notification 223/88 covers only articles of steel and stainless steel. It is his submission that articles of other alloy steel are not covered by Notification 233/88. He would submit that the assessee has deliberately misdeclared the product of other alloy steel of products of alloy and suppressed the fact from the department. He would also submit that the judgement of the Supreme Court in the case of Rajasthan Spinning & Weaving Mills reported in 1995 (77) ELT 474 for the proposition that exemption Notification should be construed strictly and there is no scope for benefit of Notification. In view of this, it is his submission that the impugned order be set aside and their appeal be allowed.
6. The cross objection of the assessee would indicate that their challenge for the cross-objection is towards the finding of the ld. Commissioner (Appeals) as regards the limitation. They would submit that they have been filing the classification lists during the relevant period and the said classification lists were approved by the lower authorities. It is the submission that the period involved in this case is from January 1993 to February 1994 during the period wherein the classification list needs to be approved by the authorities. On merits it is the submission that the decision of this Tribunal on the very same issue would squarely cover the case. The decision relied upon is Mukundbhai D. Rathod 2003 (153) ELT 320.
7. We have considered the submission made at length by the JDR and perused the written submission. On the merits of the case, the appellant has been availing the benefit of the Notification 223/88 which reads as under:-
Exemption to unmachined castings/forgings and articles thereof - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the central government hereby exempts goods of the description specified in column (3) of the Table hereto annexed and falling under heading no. or sub-headings nos. of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as are specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise leviable thereon which is specified in the said Schedule, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table.
THE TABLE S.No. Heading No./sub-heading no.
Description of goods Rate (1) (2) (3) (4)
01.
Any heading or sub-heading of Chapters 73, 84, 85, 86 or 87 Castings and cast articles of iron Rs.400 per tonne
02. Any heading or sub-heading of Chapters 73, 84, 85, 86 or 87 Castings and cast articles of steel (other than stainless steel) 10% ad valorem
03. Any heading or sub-heading of Chapters 73,84,85, 86 or 87 Casting and cast articles of stainless steel 10% ad valorem
04. Any heading or sub-heading of Chapters 72, 73, 84, 85, 86 or 87 Forgings and forged articles of steel (other than stainless steel) 10% ad valorem
05. Any heading or sub-heading of Chapters 72, 73, 84, 85, 86 or 87 Forgings and forged articles of stainless steel Rs.2000 per tonne Provided that the said goods have been subjected to any machining, or surface treatments, other than -
(a)annealing, tempering, case-hardening, mitriding and similar heat treatments to improve the properties of the metal;
(b) descaling, pickling, scraping and other processes to remove the oxide scale and crust formed during the heating of the metal;
(c) rough coating intended solely to protect products from rust or other oxidation, to prevent slipping during transport and to facilitate handling for example, paints containing an active anti-rust pigment such as red lead, zinc powder, zinc oxide, zinc chromate, iron oxide (iron minium, jewellers rouge), and non-pigmented coatings with a basis of oil, grease, wax, paraffin wax, graphite, tar or bitumen;
(d) removal of small portions of metal for testing purposes; and
(e) removal of surface defects, or of excess material by grinding, chipping, filing or proof machining, provided that in both the cases there is no change in the form of the product.
8. It can be seen that the appellant has been claiming the benefit of sr. no. 2 of the above Notification. There is no dispute that the appellant is manufacturing machine casting and forgings. The exemption Notification as reproduced above, talks about the products manufactured by the appellant falling under chapter 73 and not specified any specific chapter heading. It is also seen that the description of the goods should be casting and casting articles of steel (other than stainless steel). It is on record that the appellant is manufacturing the items which can be considered as casting and cast articles. It is also seen and on record that the goods were made of steel and are made of other alloy steel. We are of the considered view that the Notification does not differentiate whether the goods are made of alloy or non-alloy steel. The Notification excludes the cast and casting of stainless steel. There cannot be any dispute as regards the fact that the stainless steel is also an alloy. We find that the ld. Commissioner (Appeals) has correctly interpreted the Notification and held that if the government had the intention to exclude casting or casting articles made out of alloy steel it should have been incorporated in the said Notification. We find that the finding recorded by the ld. Commissioner (Appeals) as regards the upholding of the OIO on the merits of the case is correct and does not require any inference.
9. We find strong force in the submission made by the assessee. Very same Notification was interpreted by this bench in Mukundbhai D. Rathod (supra). We reproduce the entire judgment which is as under:-
The question for consideration in this appeal is the eligibility of the exemption contained in entry 4 of the table to Notification 223/88 to the forgings and forged articles of alloy steel that the appellant manufactured and cleared.
2. The entry exempts from duty forgings and forged articles of steel (other than stainless steel) classifiable in any heading or sub-heading or Chapters 72, 73, 85, 86 or 87 of the tariff. The exemption has been denied on the ground that the forgings and forged articles that the appellant manufactured being of alloy steel, were not such articles of steel as mentioned in the Notification.
3. It is difficult to comprehend this object. Chapter 72 of the tariff which is concerned with iron and steel defines steel, stainless steel and other alloy steel as follows:-
Steel:
Ferrous materials other than those of Heading No. 72.03 which (with the exception of certain types produced in the form of castings) are usefully malleable and which contain by weight 2% or less of carbon. However, chromium steels may contain higher proportions of carbon.
Stainless Steel:
Alloy steels containing by weight, 1.2% or less of carbon and 10.5% or more of chromium, with or without other elements.
Other alloy steel:
Steels not complying with the definition of stainless steel and containing by weight one or more of the following elements in the proportion shown: ..
4. It will be clear that the definition of term steel is wide enough and, in fact, is intended to include steel of various kinds including stainless steel and other alloy steel. For any metal to be considered to be steel, it must contain by weight 2% or less of carbon usefully malleable and should not fall within heading 72.03. There is an exception made to chromium steel which may contain higher proportions of carbon. This definition would certainly apply to stainless steel as defined and to other alloy steel. If the intention were to deny the exemption to alloy steel, the Notification would have incorporated the words other than stainless steel or alloy steel instead of any (other than stainless steel). The exemption was, therefore clearly available to alloy steel.
5. The appeal is accordingly allowed and the impugned order set aside.
10. We find that the above judgment covers the issue in favour of the assessee.
11. As regards the Cross objection filed by the assessee, we find that the Commissioner (Appeals) has recorded the following finding on the limitation:-
The respondent has classified its product as Cast and Cast articles of alloy steel casting since 1992 and was claiming exemption under Notification No. 223/88. The said classification lists were approved by the Department. The RT12 returns were also assessed by the department. But the goods in fact were not made of alloy steel. It was found made of non-alloy steel. After conducting enquiry the department came to know that the articles manufactured by the respondent were made of non-alloys steel. This fact was suppressed by the respondent from the department. Hence demand raised invoking provisions of section 11-A was proper.
12. As against the above reproduced finding, we find from the records the assessee has been filing the classification lists with the authorities, wherein they had declared the said product as casting and cast articles of stainless steel and articles claiming benefit of Notification 223/88 as amended. The said classification lists were duly approved by the lower authorities after following the procedure laid down in the Rules. On a specific query from the bench, ld. DR would submit that there was no correspondence entered with the assessee as seeking further details before the approval of the said classification lists. In our view if there is no evidence or new facts coming on the records of the case, the extended period of limitation cannot be invoked by the lower authorities for the demand of the duty. The Cross objection filed by the assessee needs to be allowed. We allow the cross objection filed by the assessee and set aside the impugned order wherein it holds against the assessee on the limitation.
13. In view of the foregoing, we reject the appeal filed by the Revenue and allow the cross objection filed by the assessee.
(P.R. Chandrasekharan) (M.V. Ravindran) Member (Technical) Member (Judicial) SR ??
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