Customs, Excise and Gold Tribunal - Delhi
Eicher Tractors Ltd., Shri V.P. Arya And ... vs C.C.E. on 12 July, 2005
ORDER
S.S. Kang, Vice President
1. Heard both sides. The applicants filed these applications for waiver of duty of Rs. 25,83,44,804/- and penalty of the equal amount on the firm and penalty of Rs. 5 lakhs imposed on each of the officers of the firm.
2. The brief facts of the case are that the applicants are engaged in the manufacture of tractors having more than 1800 cc and less than 1800 cc. The agricultural tractors having less than 1800 cc are exempt from payment of duty under Notification No. 162/86-CE dated 1.3.86 (as amended). The appellants, prior to 1994 used to get the gear box and hydraulic assembly from other unit on payment of duty. In 1994, the applicants stopped in getting the gear box and hydraulic assembly from other unit and changed the manufacturing process and they started manufacturing tractors and the sub-assembly on a single assembly line. This change was conveyed to the revenue vide letter dated 12th October 1994. Subsequently, the applicants also vide letter dated 4.8.95 gave all the information in respect of the manufacturing process as required by the revenue. Thereafter, on 8.9.95, the applicants also informed regarding the change in their assembly line. The Show-cause Notice was issued to the appellants for demanding duty in respect of transmission assembly and power take off system on the ground that these are manufactured by the applicants and are used in the manufacture of tractors which are exempted from payment of duty. The adjudicating authority confirmed the duty for the period 1.1.96 to 31.5.98 and imposed penalty. The applicant's contention is that Show-cause Notice was issued on 29.1.2001 for the period 1996-98 alleging that the applicants had not disclosed the fact regarding the manufacture of transmission assembly and power take off system. The contention of the applicants is that due to change in the manufacturing process, they had informed the revenue vide letter dated 12th October 1994 by a wide classification list where it was specifically mentioned that they had stopped taking the modvat credit in respect of the parts of tractors specifically the gearbox assembly. Rear Transmission assembly, hydraulic assembly, power take off assembly etc. Thereafter, Revenue raised certain queries and detailed reply was given vide letter dated 4.8.95, in this letter, the applicants specifically mentioned that IC engine, tyres & tubes, gears and other various parts which are used as raw materials/components and a flow chart was also given to the revenue. Thereafter, the revenue again asked for certain information and this information was also given vide letter dated 8.9.95 whereby it was informed that their play had undergone a complete process of modernisation for which revised Ground Plan was filled and got approved by the proper officer. It was also informed that the applicants had started assembly of tractors on Single Continuous Conveyor Line w.e.f. 18.7.94 and in accordance with the above change, they had already revised the classification list and the price list. The contention of the applicants is that in these circumstances, no suppression of facts can be alleged against the applicants and the demand is time-barred.
3. The contention of the applicants is that if the revenue is asking for duty in respect of transmission assembly, power take off system, they are entitled for the benefit of modvat credit in respect of the inputs used in the manufacture of these goods. The contention is that in spite of the production of the relevant documents, the adjudicating authority denied the benefit of the modvat credit on the ground that they had not furnished the details of inputs. Their contention is that prior to 1994, there was no demand raised by the revenue in respect of the transmission assembly before they are getting the gear box assembly and other parts from other unit on payment of duty.
4. The contention of the revenue is that transmission assembly are independent marketable goods as held by the Tribunal in the case of Escorts Ltd. . The contention is that as transmission assembly is excisable goods, therefore, when it was used in the manufacture of tractors which are cleared from exemption Notification, the applicants are liable to pay duty in respect of transmission assembly. The contention of the revenue is also that the applicants never declared to the department that they were also manufacturing transmission assembly which are used in the manufacture of exempted tractor. The revenue also submitted that the applicants are trying to sell the tractors unit, therefore, in the interest of revenue, the applicants are liable to pay the disputed amount of duty demanded in the impugned order.
5. We find that in this case, the duty is demanded in respect of the transmission assembly, power take off assembly for the period 1.1.96 to 31.5.98 and Show-cause Notice was issued on 29.1.2001 alleging on the suppression of fact that the applicants had not declared that they were manufacturing transmission assembly, power take off system. We find that prior to 1994, the applicants were receiving these goods from other unit on payment of duty and in the year 1994, they changed the manufacturing process, they stopped getting the assemblies from other unit and they started manufacturing tractors with these parts in their unit on a single conveyor line system. The applicants vide letter dated 12.10.94 informed the revenue that they were not taking any modvat credit on the inputs and parts of tractors of engine which are used in the manufacture of exempted tractors. Thereafter, the revenue asked for certain informations, which were supplied on 4.8.95 and 8.9.95. The applicants also filed revised the classification declaration duly approved by the revenue. In these circumstances, we find that prima facie, the applicants have a strong case in their favour on account of time-bar. Therefore, the predeposits of the whole of duty and penalty are waived for hearing the appeals. Stay petitions are allowed. As large amount of revenue is involved, the registry is directed to list the case for regular hearing from the week starting from 5th August 2005.
(Dictated & pronounced in open Court)