TaxTMI 
TaxTMI 
2009 (8) TMI 545
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....g consequences: (1) Demand of Rs. 25,85,800/- under Rule 57U of the Central Excise Rules, 1944 read with rule 9(2) of the Central Excise Rules and Section 11A of the Central Excise Act, 1944 was leviable. (2) Penalty of Rs. 3,00,000/- under Rule 173Q of Central Excise Rules, 1944 was imposable. (3) Interest under Rule 57U(5) read with Section 11AB of the Central Excise Act, 1944 was payable. 2. Ld. Counsel Shri S.C. Kamra submits that this appellant purchased pattern toolings from its sister concern in terms of the invoices issued under page 24 of the appeal folder. The said pattern tools were meant for use on behalf of the Maruti Udyog Ltd. for manufacture of automobile components for that concern. One of the condition of the purchase ....
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....ame value was only billed to Maruti Udyog Ltd., by way of invoice under Rule 52A and 173G of Central Excise Rules, 1944. But in real sense, there was no removal of such goods made by appellant for which the invoice was a mere intimation and not a document to make delivery of the pattern tool to serve the purpose of Rule 52A of the Central Excise Rules, 1944 for which no duty is realizable. 4. Ld. Counsel further submits that there was no intention of the appellant to remove the pattern toolings at all for the purpose of Rule 52A nor even at any point of time, there was any physical delivery of the pattern tool made through any invoice by the appellant to Maruti Udyog Ltd. Shri Kamra submits that Rule 52A requires a document to accompany ph....
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.... in the invoice appearing at page 24 carries the same purchase order number as that appears at page 19 of the appeal folder. Also it is the case of the appellant that Revenue has not found physical delivery of the pattern tool to Maruti Udyog Ltd. by the appellant and that is also not allegation in the SCN. 7. With the aforesaid factual background, Shri Kamra submits that Tribunal has already decided similar issue in the case of Mutual Mecaplast Ltd. v. CCE, Daman reported in 2007 (220) E.L.T. 888 and also relying upon the Apex Court judgment in the case of J.K. Cotton Spinning & Weaving Mills Ltd. v. UOI reported in 1987 (32) E.L.T. 234 (S.C.), he argues that the word 'removal' which is significant for realisation and imposition of excise....
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....redit of Rs. 25,85,800/-. This benefit was availed on the basis of page 22 & 23 of appeal folder showing the invoices relating to purchase of pattern tools from sister concern of the appellant. During the period Sept'98 to Feb'99, the appellant raised an invoice bearing No. 04449 showing value of Rs. 75 lakhs as assessable value of the pattern tools against Maruti Udyog Ltd. The invoice appearing at page 24 carried following foot notes as under: "Total rupees eight one lacs sixty thousand only (1) Pattern equipment made in our Baddi unit sold and detained for used in the manufacture of unmachined iron castings as ordered by the buyer. (2) Excise duty at prevailing rate will be charged at the time of physical removal of pattern from our f....
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....ts factory using the pattern tool. This factual position is not disputed by Revenue and no evidence to the contrary is on record. The appellant satisfied that in terms of page 25, goods manufactured using the pattern tools have suffered duty. The appellant had also not at all physically delivered the pattern tools and no such delivery was proved by Revenue by any evidence nor delivery is the allegation in the show cause notice. The appellant had made it clear to Revenue in the foot note of the invoice at page 24 of appeal folder that excise duty at "prevailing rate" will be charged at the time of physical removal of pattern from its factory. This is sufficient to say that there was no physical delivery of pattern tool ever made by the appel....
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....e have also advantage of reading para 38, 39 & 40 of the judgment of the Apex Court in the case of J.K. Cotton Spinning & Weaving Mills (supra). Hon'ble Court has categorically held that the word "removal" contemplates physical movement to goods from place to another. In absence of physical movement, there cannot be assumption of physical removal. Reading of para 40 of the judgment throws light that there cannot be construction of deemed removal except to the extent specifically spelt out by law. Rule 52A of the Central Excise Rules does not cover cases of deemed removal. Therefore, physical removal is sine qua non. If this is the position of law, the proceeding initiated by the SCN at page 27 of the appeal folder is unsustainable. 15. Con....