Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Konark Industries on 11 January, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.Ex.Ap.502/06
(Arising out of Order-in-Appeal No.53/B-I/06 dated 09.05.06 passed by the Commissioner(Appeals) of Central Excise & Customs, Bhubaneswar.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI S.S. KANG, VICE PRESIDENT
HONBLE SHRI P.KARTHIKEYAN, 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?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Commissioner of Central Excise,
Applicant (s)/Appellant (s)
Vs.
M/s. Konark Industries
Respondent (s)
Appearance:
Shri R.K.Chakraborty, Authorised Representative (SDR) for the Revenue Shri S.C.Mohanty, Advocate for the Respondent (s) CORAM:
Honble Shri S.S.Kang, Vice President Honble Shri P.Karthikeyan, Member(Technical) Date of Hearing:- 11.01.2011 Date of Pronouncement :- 11.01.2011 ORDER NO.
Per Shri S.S.Kang.
1. Heard both sides.
2. Revenue filed this Appeal against the impugned order whereby the demand of Rs.36,50,120/-(Rupees Thirty Six Lakhs Fifty Thousand One Hundred and Twenty only) along with penalty is set aside.
3. Briefly stated the facts of the case are that a Show Cause Notice was issued on the ground that respondents manufactured and supplied steel tables to the education department which are classifiable under chapter 73 of the Central Excise Tariff and are liable to duty. The respondents filed reply stating therein that the goods classifiable under chapter 73 of the Tariff are exempted under General Notification No.66. Thereafter Revenue issued a corrigendum to say that steel tables supplied to the education department are classifiable under sub-heading 9403 of the Central Excise Tariff and liable to duty and the value of clearance were beyond the limit prescribed under S.S.I. exemption. Hence demand was made. The adjudicating authority confirmed the demand and imposed the penalty. The Commissioner(Appeals) on Appeal filed by the Appellant set aside the demand on three grounds.:-
1) That the corrigendum to Show Cause Notice whereby goods here held to be classifiable under chapter 94 of the Tariff is not a valid notice.
2) The steel table supplied to the education department are classifiable under chapter 73 of the Tariff and are exempted from payment of duty.
3) The Commissioner(Appeals) accepted the present respondents that certain quantity of steel tables were procured from the market and if these bought out items are not taken into consideration then the respondents are within the limit prescribed under S.S.I. Notification.
4. On the first ground the contention of Revenue is that Show Cause Notice was issued by invoking extended period demanding duty after classifying the steel tables under chapter 73 of the Tariff and subsequently when it was found that the appropriate classification under chapter 94 of the Tariff corrigendum to the Show Cause Notice was issued. Revenue relied upon the decision of the Tribunal in the case of Uma Laminated Products (P) Ltd. v. Collector 1994 (17) ELT 187 (Tribunal) whereby corrigendum to Show Cause Notice was held to be valid and assessees appeal before the Honble Supreme Court was dismissed as withdrawn which is reported as 1997 (94) ELT A-153(SC). The respondent relied upon the decision of the Tribunal in the case of Mahindra & Mahindra Ltd. v. Commissioner of C.Ex., Mumbai-V 2006 (196) ELT 62 (Tri.-Mumbai) to say that corrigendum to Show Cause Notice after filing reply cannot be issued. It is also submitted that the classification claimed by the Revenue under corrigendum is prospective in nature therefore the demand for the previous period is not sustainable.
5. We find that in the present case Show Cause Notice was issued by classifying the goods i.e. steel tables supplied to the education department under chapter 73 of the Tariff and a corrigendum was issued to the Show Cause Notice to classify the goods under chapter 94 of the Tariff. The classification is to be decided by taking into consideration the classification claimed under the corrigendum. It is not a case where the Show Cause Notice was issued within the normal period of limitation and thereafter corrigendum was issued demanding duty under other heading of Tariff by invoking extended period of limitation. In the decision relied upon by the Appellant in the case of Mahindra & Mahindra Ltd. v. Commissioner of C.Ex., Mumbai-V (supra) we find that by issuing a corrigendum a penalty under Rule 73Q of Rules was proposed which was not under the Show Cause Notice. Taking into this fact into consideration the Tribunal held that proposal for imposition of penalty by issuing a corrigendum cannot be upheld. On the contrary we find that the Tribunal in the case of Uma Laminated Products (P) Ltd. v. Collector relied upon by the Revenue whereby the corrigendum to the Show Cause Notice issued was held to be valid and the Appeal filed by assessee was dismissed by Supreme Court as withdrawn. In these circumstances in the present case the present respondent had not filed any declaration or classification list claiming the classification of goods under chapter 73 of the Tariff. It is only the opinion of the Revenue in the first Show Cause Notice that the goods were classifiable under chapter 73 which were subsequently corrected by issuing a corrigendum. Therefore we find no merit in the contention of the present respondent that the classification under corrigendum is prospective in nature. The findings of the Commissioner(Appeals) in this regard are not sustainable hence set aside.
6. In respect of the second ground the contention of Revenue is that the chapter 73 of the Tariff covers tables, kitchen or other household articles and parts thereof of iron ore steel. In the present case steel tables are not household articles the same are supplied to the education department. Chapter 94 of Tariff covers other furniture and parts meaning thereby that the household articles such as tables are classifiable under chapter 73 of the Tariff and other furniture is classifiable under chapter 94 of the Tariff. Further we find that the sub-heading 9403 of the Tariff covers metal furniture of kind used in offices as in the present case the tables are for supply to the education department for use in the schools therefore we find merit in the contention of the Revenue that the steel tables supplied to the education department are rightly classifiable under chapter 94 of the Tariff. The findings of the Commissioner(Appeals) in this regard are not sustainable hence set aside.
7. On the third ground contention of Revenue is that the respondent wrote to the education department that all the steel tables are manufactured by them therefore now they cannot say that the steel tables were procured from the market.
8. The contention of respondent is that the respondent produced evidence regarding purchase of the tables from the other units regarding which the relevant invoices were produced before the lower authorities. It is also submitted that there is no evidence on record to show that other units are not independent units or there is any financial flow back.
9. We find that appellant has produced evidence regarding purchase of the items in question from other units and in respect of payments made to the suppliers. The Commissioner(Appeals) further held that proprietors of M/s.Dulax Steel and M/s.Radha Steel are relations of the present respondent but there is no mutuality of interest and flow back of consideration to the respondents is established. In the present appeal also this finding regarding mutuality of interest is not under challenge. Revenue is only relying upon the letter written to the education department. In absence of any other evidence we find no infirmity in the impugned order in this regard. If the clearance of bought out items are excluded from the clearance from the respondents regarding manufactured goods the respondents are well within the S.S.I. exemption therefore we find no infirmity in the impugned order in this regard. Appeal is disposed of as indicated above.
(Pronounced and dictated in the open court.)
Sd/ sd/
(P.KARTHIKEYAN) (S.S.KANG)
MEMBER(TECHNICAL) VICE PRESIDENT
sm
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Appeal No.Ex.Ap.502/06