Custom, Excise & Service Tax Tribunal
Cce Chennai vs ) Godrej & Boyce Mfg.Co.Ltd on 25 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/150/01 & E/151/01
[Arising out of Order-in-Appeal No.123/2000 (M-III) dated 20.9.2000 & OIA No.124/2000 (M-III) dated 20.9.2000 passed by the Commissioner of Central Excise (Appeals), Chennai]
For approval and signature:
Honble Mr. P.G.CHACKO, Member (Judicial)
Honble Mr. 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 authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
CCE Chennai
Appellant/s
Versus
1) Godrej & Boyce Mfg.Co.Ltd.
2) Rane Luke Clutch Ltd.
Respondent/s
Respondent/s Appearance :
Dr. Nitish Birdi, SDR
1)Shri M.N.Bharathi, Advocate
2) None For the Appellant/s For the Respondent/s CORAM:
Mr. P.G. Chacko, Member (Judicial) Mr. P. Karthikeyan, Member (Technical) Date of hearing : 25.2.2008 Date of decision : 25.2.2008 Final Order No.____________ Per P.G.CHACKO These appeals are by the Revenue against an order passed by learned Commissioner (Appeals), wherein an adverse order passed by the original authority against the respondents herein was set aside. M/s.Godrej Boyce Manufacturing Co.Ltd., (Godrej, for short), one of the respondents, were engaged in the manufacture of Heavy Duty System Components during the material period. These components (panels, cladding sheets, slotted angles etc.) were manufactured and removed (by classifying them under Chapters 72 & 73 of the First Schedule to the Central Excise Tariff Act) on payment of duty to the premises of the other respondents namely M/s.Rane Luke Clutch Ltd. (Rane, for short) and the same were assembled at the site into what is called Heavy Duty Rack System. This was during the period June-July 1995. The department issued a show-cause notice dated 18.5.98 to M/s.Godrej for recovery of duty of Rs.2,12,315/- from them in respect of Rack System by invoking the extended period of limitation under Section 11A of the Central Excise Act and for imposing penalties on them under Section 11AC of the Act and Rules 173Q etc. of the Central Excise Rules, 1944. In the same SCN, the department proposed to impose a penalty on M/s.Rane also under Rule 209A of the said Rules. Both the noticees contested the proposals. In adjudication, the jurisdictional Dy.Commissioner confirmed the demand of duty against M/s.Godrej, imposed on them penalties of Rs.2,12,315/- and Rs.1 lakh under Section 11AC and Rule 173Q respectively and imposed a penalty of Rs.1 lakh on M/s.Rane under Rule 209A. The aggrieved parties preferred appeals to the Commissioner (appeals) and the latter decided in their favour. Hence the present appeals of the Revenue.
2. Ld.SDR reiterates the grounds of these appeals. The main grievance of the Revenue is that the lower appellate authority did not address the question whether the Rack System which emerged at Ranes premises through assembly of the components cleared from the factory of Godrej could held to have been manufactured for the purpose of levy of duty of excise. It is also pointed out that the technical service charges collected by Godrej from Rane were nothing but erection and commissioning charges and these charges were incurred to transform the duty-paid components into a new commodity viz. Heavy Duty Rack System. In this connection, ld.SDR relies on the apex courts judgment in Sirpur Paper Mills Ltd. Vs Collector, 1998 (97) ELT 3 (SC), wherein a paper making machine assembled and erected at site out of bought-out components was held to be marketable and dutiable. On the other hand, ld.counsel appearing for one of the respondents (Godrej) submits that the excisability issue is covered by the Tribunals decision in Godrejs own case reported in 2005 (188) ELT 86 (Tri.-Mumbai). Ld.counsel further submits that, in any case, the assessee has a strong case against the demand of duty on the ground of limitation. It is submitted that the lower appellate authority categorically held that the assessee could not be regarded as having suppressed anything before the department and, accordingly, that authority set aside the penalties also.
3. After giving careful consideration to the submissions, we note that, on a similar set of facts, the Tribunal held a Heavy Duty System to be non-excisable after considering the CBECs Circular No.58/1/2002-CX dt. 15.1.2002 (which issued guidelines to the departments field formations in relation to the question of excisability of plant and machinery assembled at sites) as also the apex courts judgment in Sirpur Paper Mills case (supra). It is also pertinent to note that, in the impugned order, ld.Commissioner (Appeals) ruled out the question of suppression by Godrej and, on this basis, vacated the penalties imposed by the original authority. As already indicated, these proceedings arose out of a SCN issued in May 1998 for recovery of duty for the period June-July 1995 by invoking the larger period of limitation on the ground of suppression of facts. The appellate Commissioners finding on the question whether Godrej had suppressed any fact with intent to evade payment of duty is not presently under challenge. In the circumstances, the case of the assessee against the demand of duty on the ground of limitation stands conclusively decided at the lower appellate level. In other words, there can be no demand of duty on M/s.Godrej, nor can there be any penalty on them. The penalty on M/s.Rane is under Rule 209A, which is directly relatable to the penal liability (if any) of the assessee under Rule 173Q. Now that Rule 173Q penalty imposed on M/s.Godrej by the original authority stands vacated and the decision has not been challenged by the Revenue, there can be no penalty under Rule 209A on M/s.Rane.
4. For the reasons stated above, the impugned orders are sustained and these appeals are dismissed.
(Dictated and pronounced in open court)
(P.KARTHIKEYAN) (P.G.CHACKO)
MEMBER (T) MEMBER (J)
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