Custom, Excise & Service Tax Tribunal
C.C.E., Ghaziabad vs Metzeler Automotive Profiles India P. ... on 13 June, 2012
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 13.6.2012 Central Excise Appeal No.1441 of 2012 Arising out of the order in appeal No.28-CE/gzb/2012 DTED 10.2.2012 passed by Commissioner of Central Excise (Appeals), Ghaziabad. Honble Mr. Justice Ajit Bharihoke, President Honble Mr. Rakesh Kumar, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of 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? 4 Whether Order is to be circulated to the Departmental authorities? C.C.E., Ghaziabad ... Appellant Vs. Metzeler Automotive Profiles India P. Ltd. .. Respondent
Present for the appellant : Shri Nagesh Pathak, A.R. Present for the respondent : None Order No._____________________ Per Justice Ajit Bharihoke (Oral):
Learned Shri N. Pathak, A.R. for Revenue has assailed the impugned order of Commissioner (Appeals) on the ground that the Commissioner (Appeals) has failed to appreciate that admittedly the respondent during the year 208-2009 had received Rs.27,79,146/- from his customer for which he could not give satisfactory explanation as for what reason said money was received by him, therefore, the adjudicating authority was justified for raising adverse assumption that the aforesaid amount was received against the sale of goods manufactured by him. Thus it is contended that the impugned order is not sustainable in law and liable to be set aside.
2. We do not find any merit in the contention of the learned A.R.
3. Section 3 of the Central Excise Act, 1944 deals with levy of excise duty. The relevant part of Section 3 is reproduced thus:
SECTION 3. Duties specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied. (1) There shall be levied and collected in such manner as may be prescribed
(a) duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(b)?a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zones) specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule.
Section 4 of the Central Excise Act, 1944 deals with valuation of excisable goods for the purpose of charging duty of excise. The relevant part thereof is reproduced thus:
SECTION 4.?Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall -
(a)?in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value;
(b)?in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed.
On conjoint reading of the aforesaid provisions, it is obvious that excise duty is chargeable on any excisable goods only if it is established that the assessee has manufactured and cleared the excisable goods. On perusal of the record, we do not find any evidence to show that the amount of Rs.27,79,146/-, which the basis of demand, was received by the respondent against the clearance of the goods manufactured. It would not be out of place to mention that admittedly, the assessee explained the receipt of aforesaid amount as advance for development/purchasing tools as per specification of the customer. No enquiry in this regard was done by the Department to verify the correctness of the explanation. Therefore, we are of the view that order in original confirming demand is without any basis and the Commissioner (Appeals) was right in setting aside the same.
4. In view of the above, we do not find any merit in the appeal which is accordingly dismissed.
(Justice Ajit Bharihoke) President (Rakesh Kumar) Technical Member scd/ This appeal is directed against the order of Commissioner (Appeals) dated 10.2.2012 whereby he accepted the appeal of the respondent assessee against the order in original passed by the jurisdictional Deputy Commissioner and set aside the duty demand of Rs.2,29,002/- as also penalty imposed vide aforesaid order.
2. Briefly putting the facts relevant for disposal of the appeal are that the respondent is engaged in the manufacture of Rubber Whether Strips, Rubber Chemicals and parts/accessories of motor vehicles. On perusal of the records of the respondent for the period with effect from April, 2008 to March 2009 it was found that respondent had written off a sum of Rs.27,79,146/- as the amount of old balance of advance received from its customers. The department was of the view that the respondent had received the aforesaid amount of Rs.2779,146/- from its customers against sale of excisable goods by not showing that amount in the transaction value. Accordingly, show cause notice dated 15.10.2010 was issued to the respondent proposing demand of Rs.2,29,002/- and the respondent was also called upon to show cause as to why penalty of equal amount may not be imposed upon him under rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 194.
3. The respondent contested the show cause notice vide his response dated 3.4.2010 wherein he claimed that aforesaid amount which was written off was given to him by its customer as a loan for developing tools and was not related to the sale of the goods. As such, there was no question of levy of excise duty of the said amount.
4. Jurisdictional Deputy Commissioner of Central Excise after giving opportunity of heard to the respondent confirmed the duty demand of Rs.2,29,002/- against the respondent along with interest and also imposed penalty of equal amount on the premise that the aforesaid amount which was written off subsequently was actually clandestine payment against the price of excisable goods supplied by the respondent to its customers.
5. The respondent preferred an appeal against the order in original and the Commissioner (Appeals) vide impugned order set aside the duty demand and penalty holding that there was no evidence to show that the aforesaid amount of Rs.27,79,146/- was received by the respondent in respect of sale of excisable goods from its customers.