Customs, Excise and Gold Tribunal - Delhi
Adarsh Industries vs Commissioner Of Central Excise, ... on 22 January, 2002
Equivalent citations: 2002(141)ELT189(TRI-DEL)
ORDER
V.K. Agrawal, Member (T).
1. In this appeal, filed by M/s. Adarsh Industries, the issue involved is whether the benefit of Notification No. 202/88-C.E., dated 20-5-88 is available to the goods manufactured by them.
2. Shri Ravi Chopra, learned Advocate, submitted that the Appellants manufacture Pipe & Tubes of steel out of flats of thickness not exceeding 5 mm and width of below 75 mm; that the Joint Commissioner, Central Excise (Adjudication) vide Order No. 27/99, dated 8-6-99 demanded Central Excise duty, denying them the exemption under Notification No. 202/88 on the ground that they had used bars which were not an input specified in the said notification; that on appeal the Commissioner (Appeals) under the impugned Order has rejected their appeal on the ground that they had received the goods under the invoices showing the bars as raw material.
3. He, further, submitted that the inputs received by them were flats and the suppliers had wrongly supplied ihem as bars in view of Appellate Tribunal's decision in the case of Calcutta Steel v. CCE, 1991 (54) E.L.T. 90; that the Tube Mill installed by them was a Flat Mill and Pipes and Tubes could not be manufactured out of bars; that the Appellate Tribunal in the case of Garg Strips and Rolling Mills (P) Ltd. v. CCE, 1995 (78) E.L.T. 93 has held such products to be Flats; that appeal filed against the said order has been dismissed by the Supreme Court as reported in 1995 (79) E.L.T. A212; that as the bar with the above specification has been held to be Flats and Pipes and Tubes having been manufactured out of flats not exceeding 3 mm thickness and width below 75 mm are exempt under Notification No. 202/88; that there is no evidence on record regarding clearance of goods on which duty has been demanded; that the duty cannot be demanded on surmises and on hypothetical grounds. He finally submitted that if any duty is payable the value has to be treated as cum duty price from which duty is to be deducted as held by the Larger Bench of the Tribunal in the case of Shree Chakra Tyres Ltd. v. CCE, 1999 (108) E.L.T. 361.
4. Countering the arguments Shri R.D. Negi, learned SDR, submitted that Notification No. 202/88 exempts tubes and pipes from payment of duty subject to the condition that these are manufactured out of skelp, whoops, sheets of thickness not exceeding 5 mm, strips of thickness not exceeding 5 mm and flats of thickness not exceeding 5 mm; that the inputs received by them were described as bars the benefit of Notification is not available as bar is not one of the specified input in the notification; that it is settled law that the classification of the product cannot be changed at the manufacturer's end; that the Tribunal in the case of Calcutta Steel Industries (supra) has held that Rectangular product of thickness less than 3 mm and width over 75 mm are classifiable as bars; that the ratio of the decision in the case of Garg Strips & Rolling Mills does not apply as the product has been described by the supplier themselves as bars whereas in the said matter on physical examination the product was found to be rectangular and the expert opinion held the item to be in the range of iron strip.
5. We have considered the submissions of both the sides. It is not disputed by the Appellants that the inputs received by them were described by the suppliers as bars. Bar is not one of the input specified in Notification No. 202/88-CE. and as such final product manufactured by them are not eligible for the benefit of exemption notification. The Appellants cannot go behind the description of the product given by the supplier and the classification of the product cannot be reopened at the receivers end. We find no infirmity in the findings of the Commissioner (Appeals) in the impugned Order that there is no proof that the material used was similar to that of Garg Strips and Rolling Mills Pvt. Ltd.; that the duty has been demanded on the quantity of final product which have been cleared without payment of duty as per the statement of Shri Mangat Gupta, partner of the firm. Accordingly we hold that the Appellants are not eligible for the benefit of Notification No. 202/88 and are liable to pay Central Excise duty. However, we agree with the learned Advocate that the assessable value has to be recomputed in the light of the decision of the Larger Bench of the Tribunal in the case of Sree Chakra Tyres wherein it was held that if any further demand of duty is created against the Assessee and such further demand of duty cannot be passed on to customers, the original consideration has to be taken as cum duty price for the purpose of demand of higher duty and total duty proposed to be demanded shall have to be abated from the cum duty price. Accordingly we direct the Adjudicating Authority to recompute the duty liability following the principle laid down in Sree Chakra Tyres and intimate to the Appellants which will be payable by them.