Custom, Excise & Service Tax Tribunal
M/S. Tafe Motors And Tractors Ltd vs C.C.E., Bhopal on 19 February, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 19.02.2014
For Approval &Signature :
Honble Mrs. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. E/2403/2008 -EX[SM]
[Arising out of Order-in-Appeal Nos.136/BPL/2008, dated 26.08.2008 passed by C.C.E.(Appeals), Bhopal]
M/s. TAFE Motors and Tractors Ltd. Appellants
Vs.
C.C.E., Bhopal Respondent
Appearance Shri Hemant Bajaj, Advocate - for the appellants Shri MS Negi, DR - for the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Final Order No.50665/2014, dated 19.02.2014 Per Honble Mrs. Archana Wadhwa :
After hearing both the sides, I find that the appellants are engaged in the manufacture of tractors. Their spare part unit was doing re-packing of various spare parts of the tractors. The said activity of re-packing of spare parts did not attract any duty of excise prior to 01.06.2006 in as much as the activity of re-packing was not amounting to manufacture. However, with effect from 01.06.2006, with the amendment in Section 2(f)(3)(i) of Central Excise Act, a deeming provision was introduced holding the activity of re-packing as amounting to manufacture. As per the appellants, they started clearing their goods after 01.06.2006 on payment of duty, after availing the benefit of CENVAT credit.
2. The appellants factory was visited by the Central Excise officers in August, 2006, who found that 181 labels having the date printed upon them as 31.05.2006 was lying in their premises. The officers also found certain labourers doing the job of re-packing. However, no panchnama was drawn and it is not clear as to whether the goods being re-packed by the labourers, on the date of visit of the officers, was being affixed with the label of 31.05.2006 or not, though Commissioner (Appeals) has recorded that labels of 31.05.2006 were being affixed.
3. On the above basis, proceedings were initiated against the appellants alleging that even after 01.06.2006, they have done the re-packing with the labels printed with the date as 31.05.2006 and have cleared the same without payment of duty. For the said proposition, a notice was issued relying upon the activities noted by the visiting staff at the time of their visit and the statement of one Shri AK Handa, in-charge of spare parts division. The said notice was confirmed by the original adjudicating authority as also upheld by the Commissioner (Appeals).
4. Ld. Advocate appearing for the appellants has drawn my attention to the findings of the fact by the Commissioner (Appeals), which are to the effect that on the date of visit of the officers on 22.08.2006, the entire stock was found showing the date of packing as 31.05.2006 and there was not a single pack carrying date of packing on or after 01.06.2006. It is the contention of the Ld. Advocate that the said finding of the fact by the Commissioner (Appeals) is incorrect in as much as the same is not emanating from any records. He also submits that as is clear from the further observance of Commissioner (Appeals), the entire case of Revenue is based upon surmises and conjectures without any reference to the statutory records.
He further submits that on 01.06.2006, the appellants started availing the MODVAT credit and started paying duty on the goods re-packed thereafter. Separate accounts were being maintained in respect of the goods manufactured prior to the said cut-off date and after the said date. He draws my attention to the statement of Shri AK Handa recorded on 22.08.2006, wherein against Question No.3, he answered that we are storing both the stocks on the same location in their godown. However in computer, we are accounting both the stocks as separate for the period prior to and after 31.05.2006 stock by giving different codes. He submits that both the authorities have not paid any attention to the said clarification given by Shri AK Handa and have wrongly observed certain factual positions that there was no clearance during the period of post 01.06.2006 re-packed products, till the date of visit of the officers. He submits that after 01.06.2006, they have cleared the goods on payment of duty of Rs.19.33 lakhs (Rupees nineteen lakhs thirty three thousand) approximately. As such, the entire case of the Revenue is based upon the wrong premises. Ld. Advocate draws my attention to various invoices showing clearances repacked spares post 01.06.2006, on demand of duty as also to a detailed chart placed before the authorities below showing such clearances, who have not made any reference to the same.
5. Countering the arguments, Ld. Departmental Representative draws my attention to the reasonings adopted by the authorities.
6. After appreciating the arguments and after going through the impugned order, I agree with the Ld. Advocate that certain incorrect factual observances stand made by the Commissioner (Appeals). He has not referred to any panchnama drawn by the visiting staff indicating that the goods being re-packed by the labourers was with the 31.05.2006 label. Further, the observations made by the Commissioner (Appeals) that during June, 2006 to 22.08.2006, the appellants have not made any clearance on payment of duty stands belied by the fact of production of some invoices by the appellants. Even the statement of Shri AK Handa, in answer to Question No.3, clearly mentioned that they are maintaining separate records in their computer by giving two different code numbers to prior 01.06.2006 stock and post 01.06.2006 stock. There are no confessional statements of any other person on record indicating that the appellants were clearing prior 01.06.2006 stock even after packing the same after the said date.
7. As per the appellants, they have made payment of duty to the extent of Rs.19.33 lakhs during the period of 2= months. The duty being demanded in the present appeal is additional duty of Rs.19.40 lakhs (Rupees nineteen lakh forty thousand only). As such, according to the Revenue, the appellants have cleared the goods during the 2= months, which attracted duty of Rs.40 lakhs (Rs.19.33 lakhs + Rs.19.40 lakhs). The assessable value of such goods as also the quantity of various items would be approximately Rs.1 crore (Rupees one crore). This can be compared with the clearance of the appellants for the period 2= months made prior to 01.06.2006, which will reveal an average picture which will be reasonable to be examined.
8. In as much as the lower authorities have not looked into the various evidences produced by the appellants and the findings of the facts arrived at by them have been proved to be wrong and incorrect, I deem it fit to set aside the impugned order and remand the matter to the original adjudicating authority for fresh decision, by taking into account the overall facts and circumstances of the case. The appellants are at liberty to produce all the relevant documents in support of their plea. However, in case a part of the demand is confirmed against the appellants, they would be entitled to the benefit of CENVAT credit duty paid on the inputs as already held by the Commissioner (Appeals)
9. The appeal is disposed of in the above manner.
(Dictated and pronounced in the Open Court) (Archana Wadhwa) Member (Judicial) SSK -2-