TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>100% EOU appellants granted stay on duty demand & penalty imposition for job work</h1> <h3>CHAUDHRY HAMMER WORKS LTD. Versus COMMISSIONER OF C. EX., GHAZIABAD</h3> CHAUDHRY HAMMER WORKS LTD. Versus COMMISSIONER OF C. EX., GHAZIABAD - 2012 (280) E.L.T. 416 (Tri. - Del.) Issues:1. Confirmation of demand of duty against 100% EOU appellants for job work.2. Violation of Foreign Trade Policy by 100% EOU appellants.3. Invocation of extended period of limitation for duty recovery.4. Verification of documents filed by the appellants.5. Stay petition based on limitation and revenue neutrality.Analysis:1. The appellants, being 100% EOU, undertook job work for their sister unit using raw materials supplied by the sister concern. The Revenue contended that this violated EOU regulations, leading to duty demand confirmation and penalty imposition. The appellants argued that the duty demand was time-barred as no objection was raised earlier, and the job work was revenue-neutral as the duty paid could be utilized by the sister unit.2. The Revenue invoked the extended period of limitation based on the violation of Foreign Trade Policy by the appellants. Citing precedents, the Revenue argued that EOU job work for sales in DTA breached policy conditions. The Commissioner held the appellants intentionally violated policy provisions to evade duty, justifying the extended limitation period for duty recovery.3. The appellants' plea on limitation was not adequately considered by the Commissioner, who primarily focused on the policy violation. The appellants had reflected job work details in their ER-2 Returns, indicating Revenue's knowledge of the activities. The appellants' sister unit used the manufactured goods, ensuring revenue neutrality. The Tribunal found merit in the appellants' limitation argument and granted a stay without pre-deposit, acknowledging the potential for early appeal hearing due to the substantial duty amount.4. The verification requirement under Rule 28 of CESTAT (Procedure) Rules, 1982 was analyzed. The Tribunal noted that the rule pertained to appeals, not every document filed, and found no reason to doubt the correctness of the appellants' documents. The Revenue's objections lacked substance, as the documents were referenced in the reply to the show cause notice, and their authenticity was not in question.5. The Tribunal concluded that the appellants had a strong case on limitation and revenue neutrality, leading to the stay petition's approval without pre-deposit. The decision highlighted the appellants' compliance efforts, lack of intention to evade duty, and the procedural adherence in their job work activities. The Tribunal emphasized the importance of considering all aspects, including limitation and revenue impact, in such cases to ensure fair adjudication.
TaxTMI 