2017 (10) TMI 398 - AT - Central Excise

Tribunal Upholds Extension Order for Forged Parts with Conditions

M/s. Steel Authority of India Ltd. Versus Commissioner of Customs, Central Excise & Service Tax, Durgapur

The Tribunal upheld the Commissioner's order granting an extension under Rule 16B of the Central Excise Rules, 2002, with conditions for clearance of ... Extension of permission under Rule 16B of the Central Excise Rules, 2002 - clearance of forged black wheels and axles for machining to various job-workers - Held that: - Rule 16B of the Central Excise Rules, 2002, had given power to the Commissioner to pass special order for removal of the semi-finished goods - It is seen that the appellant misused the permission granted by the Commissioner in earlier occasion and therefore, certain conditions were imposed in the impugned order. The appellant had not disputed the allegations as mentioned in the SCN - the appellant may approach to the Commissioner for modification of the order on the basis of the subsequent development in respect of compliance of the order issued under Rule 16B of the CER, 2002 - appeal disposed off. Issues:Extension of permission under Rule 16B of Central Excise Rules, 2002 for clearance of forged black wheels and axles for machining to job-workers, conditions imposed by the adjudicating authority on bringing back scraps, direction to get job workers appointed within 200 kms distance, misuse of permission granted by the Commissioner, applicability of Rule 4(5)(a) of Cenvat Credit Rules, 2004.Analysis:The appellant applied for an extension of permission under Rule 16B of the Central Excise Rules, 2002 for the Financial Year 2016-17. A show cause notice was issued, and the Commissioner granted the extension with conditions. The main contention was to set aside the conditions imposed on bringing back scraps from job workers' premises and the direction to appoint job workers within 200 kms. The appellant argued that the allegations against one job worker should not apply to all and that the transactions were covered under Rule 4(5)(a) of the Cenvat Credit Rules, 2004. The Revenue reiterated the findings of the adjudicating authority.The Commissioner granted the extension with conditions, including bringing back scraps within 180 days and advising to get job work done by nearby job workers. The Commissioner's order was based on Rule 16B of the Central Excise Rules, 2002, allowing the removal of semi-finished goods for manufacturing processes. The appellant misused the permission granted earlier, leading to the imposed conditions. The appellant did not dispute the allegations in the show cause notice, and thus, the order was upheld. The appellant raised difficulties in complying with the conditions, suggesting approaching the Commissioner for modification based on subsequent developments.In conclusion, the Tribunal upheld the Commissioner's order, stating that without examining the entire manufacturing process, it was challenging to modify the conditions. The appellant was advised to seek modification from the Commissioner based on compliance developments. The appeal was disposed of with this observation.