Custom, Excise & Service Tax Tribunal
M/S. Bharat Aluminum Co. Ltd vs C.C.E. Raipur on 2 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Appeal No. E/187/2008-EX(DB)
[Arising out of Order-in-Original No. 195-CE/RPR/APPL-I/2007/2628 dated 18.10.2007 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Raipur].
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Shri V.Padmanabhan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the 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?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Bharat Aluminum Co. Ltd. .Applicants
Vs.
C.C.E. Raipur .Respondent
Appearance:
Shri. B.L. Narsimhan, Advocate for the Applicants Ms. Neha Garg, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Shri V.Padmanabhan, Member (Technical) Date of Hearing: 02.05.2016 FINAL ORDER NO. 51749/2016-EX(DB) Per Archana Wadhwa:
Vide his impugned orders, lower authorities have confirmed total duty demand of Rs.33,10,412/- along with confirmation of interest and imposition of penalty of identical amount.
2. After hearing both the sides, it is seen that the appellants are working under a work order placed upon them by M/s. Vikram Sarabhai Space centre (hereinafter referred to as VSSC). In terms of the said work order, they are supplied aluminum sheets by VSSC for further carrying out the work of conversion, solution treatment stretching, artificial aging and qualification of AA 6061 sheets. After carrying out of the processes, the appellant returned the processed aluminum sheets to VSSC.
3. The appellant claimed the benefit of notification no. 64/95-CE dated 16.03.1995, which exempts the specified goods from payment of duty, subject to fulfillment of condition enumerated therein. One of the condition is that the assessee produces the certificate from the requisite officer of Indian space research organization giving the details of the goods. The appellant claimed the exemption in respect of Sl. No. 7 of the notification which grants exemption to system and sub system of launch vehicle and system and sub system of satellite projects. Though, the appellant produced the requisite certificate, Revenue was of the view that in as much as the goods manufactured by the appellant were aluminum sheets and not specified item against Sl. No. 7, the benefit of the notification cannot be extended to them. Accordingly, they were issued a show cause notice on 03.04.2007 for the period June 2004 to February 2006 proposing confirmation of demand of approx Rs. 25 lakhs. Subsequently, second show cause notice was issued on 31.05.2007 demanding duty for the period May 2006 to February 2007.
4. The said show cause notice stands confirmed by the lower authorities. Hence the present appeal.
5. After hearing both the sides duly represented by Shri B.L. Narsimhan for the appellant and Ms. Neha Garg for the revenue, we find that identical dispute was the subject matter of earlier decision of the Tribunal in the case of Andhra Sugars Ltd. Vs. CCE Guntur-2005 (192) ELT 493 (Tri-Bang). By observing that the fuel, even though not specifically mentioned against sl. No. 7 is required to be considered as the part of sub system of launch vehicle and should be extended benefit of the notification, the assessee appeal was allowed. However, subsequently the said decision was noted in the case of Ordnance Factory Vs. CCE Nagpur-2013 (295) ELT 600 (Tri-Mum) and it was held that the aluminum alloy rods, flats, billets involved in the said decision, cannot be extended the benefit of notification no. 64/95-CE, in as much as at the time of clearance they cannot be considered to be parts of system and sub system. As such the benefit of notification was denied to the assessee.
6. Ld. Advocate fairly agrees that the ratio of the law declared in the case of Ordnance Factory (Supra) would be squarely applicable to the facts of the present case. However, he assaults the demand on the ground of limitation involved in the first show cause notice and while conceeding to the confirmation of duty and interest in the second show cause notice, he prays for setting aside the penalty.
7. We have seen the correspondence by the appellant dated 02.12.2003 addressed to the Range Superintendent intimating that they would be availing benefit of notification no. 64/95-CE. It is also not disputed that the benefit was being claimed while producing the certificate from the requisite authority which were being placed before the authorities. It is also further seen that the earlier order of the Tribunal was in favour of the assessee. As such it can be reasonably concluded that the issue was debatable and arguable and might have led the assessee to a bonafide belief. Otherwise also we note that the appellant had stated the entire facts to the Revenue and as such reasoning of the original adjudicating authority that the appellant knew that the benefit was not available to them and has wrongly claimed the same, cannot be appreciated.
8. In view of the above discussion and after noticing the factual position, we hold that the first show cause notice issued on 03.04.07 for the period June 2004-Feb 2006 is barred by limitation. The confirmation of the demand in respect of the said show cause notice along with imposition of penalty is set aside.
As regards the second show cause notice, the Ld. Advocate agrees that the same is within limitation period and the issue on merits stands decided against them in the above referred decision of Tribunal in the case of Ordnance Factory (Supra). However, as we have already held that there is no malafide on the part of the appellant, we find no reason to impose penalty upon them. Accordingly, demand raised by the second show cause notice stands confirmed along with confirmation of interest, but penalty is set aside.
9. Appeal is disposed of in the above terms.
[Dictated and pronounced in the open Court]
(V.Padmanabhan) (Archana Wadhwa) Member (Technical) Member (Judicial)
Bhanu
3
E/187/2008-EX(DB)