Custom, Excise & Service Tax Tribunal
M/S Asil Industries Limited vs Cce, Jaipur on 7 July, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. II Date of hearing/decision: 07.07.2015 For Approval and Signature: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. B. Ravichandran, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Excise Appeal No. 2805 of 2006 (Arising out of order in appeal No. 159(MPM)CE/JPR-I/2006 dated 01.06.2006 passed by Commissioner (Appeals), Central Excise, Jaipur). M/s Asil Industries Limited Appellant Vs. CCE, Jaipur Respondent
Appearance:
Shri Mayank Garg, Advocate for the Revenue Shri Ranjan Khanna, DR for the Respondent Coram: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. B. Ravichandran, Member (Technical) Final Order No. 52133/ 2015 Per: Ashok Jindal:
The appellant is in appeal against the impugned order demanding duty on the insurance claim of damaged gear box.
2. The facts of the case is that the appellant is engaged in the manufacture of iron and non-alloy steel strips and alloy steel strips. In 1996, they procured one gear box. The said gear box was damaged in 2001. The appellant filed a claim of insurance with the insurance company for Rs. 11,54,497/-, after deducting the cenvat credit of Rs.1,73,298/-. The insurance company settled the claim of Rs.5,60,000/. The Revenue is of the view that the amount received as insurance claim is the sale value of the damaged gear box, therefore, they are required to pay duty on the said amount. Therefore, a show cause notice was issued for demand of duty which was adjudicated. Both the lower authorities confirmed the duty demand alongwith interest and equivalent amount of penalty was also imposed. Aggrieved by the said order, the appellant is before us in the present appeal.
2. Ld. Counsel for the appellant submits that the gear box is still lying in the factory and that has not been sold out, therefore, the duty cannot be demanded. He further submits that as per Section 4 of the Central Excise Act, 1944, the duty can be demanded only in a situation where goods are sold or deemed to be sold. In this case, the appellant is manufacturer of iron and non-alloy steel strips and gear box is still lying in the factory therefore, the duty cannot be demanded on the amount of compensation received by them towards damaged gear box. Therefore, the impugner order is to be set aside.
3. On the other hand, ld. DR opposed the contention of the ld. Counsel and submits that it is admitted fact that appellant has received an amount of Rs. 5,60,000/- towards damaged gear box. Therefore, it is immaterial whether the gear box is lying in their factory or not. In fact, an amount of Rs.5,60,000/- towards the value of such damaged gear box is required to be paid as they are availing cenvat credit on the gear box.
4. Heard the parties and considered the submissions.
5. As per Section 4 of the Central Excise Act, 1944 an assessee is required to pay duty of the sale of the goods or deemed to be sale of the goods manufactured by them and the same shall be transaction value. In this case, sale did not take place. It is not a case of deemed sale, as appellant is not the manufacturer of gear box. When the transaction is not covered under Section 4 of the Central Excise Act, 1944, we hold that the appellant is not required to pay duty on the amount of insurance claim for damaged gear box.
6. In these terms, we set aside the impugned order and allow the appeal with consequential relief.
(Ashok Jindal) Member (Judicial) (B. Ravichandran) Member (Technical) Pant