Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Anil Polymers Pvt Ltd on 5 December, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/2922/03-Mum (Arising out of Order-in-Appeal No. BPS (165)1888/03 dated 25.06.2003 passed by Commissioner of Central Excise (Appeals), Aurangabad.) For approval and signature: Honble Mr.A.K.Srivastava, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Commissioner of Central Excise, Aurangabad Appellants Vs M/s Anil Polymers Pvt Ltd Respondents Appearance:
Shri S.M. Vaidya, J.D.R. for the appellants Shri G.M. Kulkarni, Excise Officer, for the respondents CORAM:
Honble Mr.A.K. Srivastava, Member (Technical) Date of Hearing : 03.12.2008 Date of Decision: 05 .12.2008 O R D E R NO..
Per: Mr A.K. Srivastava, Member (Technical) This appeal has been filed by the Revenue.
2. The brief facts of the case are that M/s Anil Polymers Pvt Ltd, Aurangabad, the respondents herein are engaged in the manufacture of EPS Buffers i.e. Thermocol falling under Chapter Heading No 3923.00 of Central Excise Tariff Act, 1985. They received dies and moulds on loan (returnable) basis from their buyer/customer viz M/s Videocon International Ltd, Aurangabad (M/s VIL in short) from time to time for manufacturing EPS Buffers i.e. Thermocol, and these goods were cleared on payment of Central Excise duty by loading the assessable value based on the purchase order of said customer. It was found that while finalizing the purchase order, M/s VIL had not considered the cost of such dies/moulds, which ought to have been added in the cost of final product of respondents factory by amortising the same over the life of moulds/dies. This act resulted into short payment of duty of Rs 21,194/- for the goods so cleared by the respondents during the period from 1997-98 to 1999-2000.
3. The issue was decided by the Joint Commissioner, Central Excise, Aurangabad vide Order-in-Original dated 21.2.2002 under which he confirmed the demand for extended period, being suppression of facts proved in this case. He further ordered appropriation of an amount of Rs 19,965/- already paid by respondents on 21.8.2000 against the impugned demand and further ordered recovery of interest under Section 11AB of the Act and imposed penalty of Rs 21,194/- under Section 11AC of the Act.
4. On appeal by the respondents, the Commissioner (Appeals), on merits, agreed with the findings of the lower authority and held that the amortization cost of the moulds/dies supplied by M/s VIL free of cost was includible in the assessable value of the excisable goods manufactured by them during the period under reference.
5. He, however, concluded that the respondents factory had been audited by Internal Audit of the Department during period of 1997 to 2001 i.e. period of impugned demand and no objection was raised by the Auditing Officers during course of Audit of the factory records so conducted. Therefore, he held that it may not be the case of wilful suppression or mis-statement of facts by assessee to invoke extended time period clause under Section 11A (1) of the Act and to invoke Section 11AB and 11AC of the Act. Therefore, he held the impugned demand as barred by limitation and set aside the impugned Order-in-Original and allowed the appeal of the respondents. Hence, this appeal by the Revenue.
6. Heard both the sides and perused the records.
7. I find that the case relates to the period 1997-98 to 1999-2000. I also note that there were conflicting judgments on the issue regarding the inclusion of amortization cost of moulds/dies in the assessable value of the finished excisable goods manufactured out of such moulds/dies during the relevant period. The issue came to be resolved by the Larger Bench decision of the Tribunal in the case of Mutual Industries Ltd Vs Collector of Central Excise, Mumbai reported in 2000 (117) ELT 578 (T). This decision is dated 16.3.2000. It was held by the Larger Bench that the proportionate cost of moulds, supplied free by the customer and used in the manufacture of finished goods is includible in the assessable value. Thus during the period 1997-98 to 1999-2000, the issue regarding the inclusion of amortization cost of moulds/dies was debatable. I also find that the Revenue has not disputed that the audit of the respondents factory for the period give below was conducted on the dates indicated against each:
Sl No Period Date of audit 1 01.10.1996 to 31.03.1997 22.04.1997
2. 01.04.1997 to 31.10.1997 24.11.1997
3. 01.04.1997 to 30.09.1999 17.10.1999
4. October 1999 to December 2000 28.01.2001 No objection was raised by the Audit Officers during the course of the audit of the records. Therefore, in all fairness, intention to evade payment of duty cannot be attributed to the respondents, given such a background.
8. The learned J.D.R. has relied upon the Tribunals decision in the case of Agrico Engg Works (India) Pvt Ltd Vs CCE, Meerut reported in 2000 (122) ELT 891 (T) in which it was held that the assessee cannot plead no suppression on the ground that the Excise Officers visited their factory number of times unless there is something on record to show that they pointed out some fact to Revenue and then even after the discovery of that fact, Revenue had not taken any action. I am afraid that the ratio of this case law cannot be applied to the facts of the present case because the issue of inclusion of the amortization cost was itself debatable during 1997-98 to 1999-2000 because of the conflicting judgments and it came to be resolved only on 16.3.2000 by the Larger Bench of the Tribunal in the case of Mutual Industries Ltd cited supra.
9. The respondents representative, who appeared before me for the personal hearing, stated that his factory is closed. He states that he is, however, willing to make the payment of the balance duty. I order the respondents to make the payment of balance duty together with interest. In the facts and circumstances, I do not consider it a fit case for which the imposition of penalty under Section 11AC of the Central Excise Act, 1944 is warranted. I order accordingly.
10. The impugned order passed by the Commissioner (Appeals) is modified to the above extent. The appeal filed by the Revenue is disposed of in the above terms.
(Pronounced in Court on 05.12.2008.) (A.K. Srivastava) Member (Technical) rk 2