2015 (3) TMI 254 - AT - Central Excise

Tribunal Stays Central Excise Duty Recovery in Favor of Appellants

M/s. Tata Motors Ltd. Versus CCE, Delhi-iv

The Tribunal found in favor of the appellants, staying the recovery of the Central Excise Duty demand, interest, and penalty during the appeal process. ... Waiver of pre deposit - appellants were receiving certain motor parts from one of their suppliers namely M/s. Spicer India Ltd., Pantangar on which duty was payable by the appellants on further clearance - Held that:- It is seen that the report received from the Central Excise Authority mentioned earlier does not disclose on what evidence the report is based. On the other hand, the appellants have contended that the said supplier in Uttarakhand supplied the goods in packed condition with MRP affixed thereon. The appellants have produced a written document signed by the appellants and the said supplier (i.e M/s. Spicer India Ltd.) which clearly laid down the procedure for Uttarakhand vendors for supplying goods to the appellants. As per the said document M/s. Spicer India Ltd. are required to supply the goods in packed condition with proper MRP affixed thereon. Seen in this context, the appellant’s contention that the basis on which the report from the Central Excise officer of Uttarakhand is made is not disclosed assumes significance with regard to its inadmissibility as an evidence of any value. - appellants have been able to make out a good case for waiver of pre-deposit. We accordingly waive the pre-deposit and stay the recovery of the impugned duty, interest and penalty during the pendency of the appeal. - Stay granted. Issues:- Central Excise Duty demand confirmation along with interest and penalty.- Whether the loose parts from the supplier constitute manufacture.- Admissibility of evidence from Central Excise Authority report.- Appellants' compliance with the agreement terms regarding packed goods with MRP.Central Excise Duty Demand Confirmation:The appeal was filed against an Order-In-Appeal that upheld an Order-in-Original confirming a Central Excise Duty demand of Rs. 1,39,935 along with interest and equal penalty. The duty was deemed payable by the appellants on motor parts received from a supplier, M/s. Spicer India Ltd., based on further clearance requirements. The audit party found loose parts allegedly supplied by Spicer India Ltd., leading to the duty confirmation.Manufacture of Loose Parts:The Order-in-Original held that activities like packing, labeling, and affixing MRP on loose parts amount to manufacture. The adjudicating authority cited the audit findings and a report from the Central Excise authority in Uttarakhand, stating that Spicer India Ltd. supplied goods in unpacked or semi-packed condition. The appellants disputed this, arguing that their agreement with Spicer India Ltd. required goods to be supplied in packed condition with MRP affixed.Admissibility of Evidence:The report from the Central Excise officer in Uttarakhand lacked disclosure on the evidence basis. The appellants presented a document signed by both parties, outlining the procedure for supplying goods, indicating that Spicer India Ltd. was required to supply goods in a packed condition with MRP affixed. This raised doubts about the admissibility and value of the Central Excise officer's report as evidence.Compliance with Agreement Terms:The appellants contended that the loose parts found were not supplied by Spicer India Ltd. or were not always in unpacked/semi-packed condition. They argued that the parts received from the supplier were compliant with the agreement terms requiring them to be supplied in packed condition with MRP affixed. The signed document between the parties supported this claim.Judgment:Considering the arguments and evidence presented, the Tribunal found that the appellants had a strong case for waiving the pre-deposit. Consequently, the recovery of the impugned duty, interest, and penalty was stayed during the appeal's pendency, indicating a favorable outcome for the appellants.