TaxTMI 
TaxTMI 
2015 (9) TMI 515
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....ppellant demanding excise duty of Rs. 1,25,98,225/- on the scaffolding equipments manufactured and cleared by them during the period from 2004-05 to 2006-07 (upto 12/2006) under Section 11A(1) of the Central Excise Act and also proposing for imposition of penalty under Section 11AC of the Act as well as Rule 25 of the Central Excise Rules. 2002. It was alleged in the SCN that appellants are manufacturing / fabricating on the items (i) APS units (ii) Props (iii) Spans (4) Floor Forms. Assessee received raw materials GI pipes, HR sheets supplied by various construction companies and carried out the activities of drilling, punching holes, welding and bending etc. on job work basis and returned to them and raised bills towards labour charges. It was alleged that the above activity amounts to manufacture and as per Section 2(f) of the Central Excise Act and excisable. The adjudicating authority in the impugned order partially confirmed the demand of Rs. 48,52,976/- and also imposed equal penalty under Section 11AC and along with interest. Assessee filed appeal against the confirmation of the demand. They also filed a writ petition before the Hon'ble High Court, Madras under Article ....
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....ions wherein it was held that the above activity of drilling and cutting and bending is not amounting to "manufacture". Therefore, they were under bonafide belief that the activity is not amounting to "manufacture". He further submitted that the officers visited the unit on 18.12.2006 and made detailed verification and also recorded statements. The proprietor of the company clearly made in his statement that they are genuinely under the belief that these activities do not amount to 'manufacture'. He further submits that this statement was not contradicted either in the SCN or in the order. Further, the unit was closed since 1.1.2007 immediately after departmental action as the department did not allow them to clear the goods without payment of duty. SCN was issued demanding duty for 2004-05 to 2006-07 only on 30.1.2008 and therefore the entire demand is hit by limitation. He further submits that mere ignorance of facts or law does not attract extended period. He further drew our attention to para-12 of the SCN at page 100 on the alleged suppression or misdeclaration and submits that no specific averments brought out by the department except making general statement. T....
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....ur attention to para 18 & 19 of the OIO wherein the adjudicating authority clearly brought out the nature of description of the item and nature of processors carried out by the appellant He further submits that the raw material are pipes and sheets classifiable falling under chapter 72 whereas the manufactured items have a different name and description and classifiable under chapter 73.08. The adjudicating authority has rightly held that above activities amount to "manufacture". On the Revenue's appeal, he reiterated the grounds of appeal and submits that value of APS units and Props in respect of work carried out through sub-contractor M/s.Cutmax Engineering are to be included in the value of the appellant and extended period has been rightly invoked as there is suppression of facts. He relied on the following decisions :- (i) CCE Ahmedabad Vs Richardson & Cruddas ltd. 2012 (280) ELT 249 (Tri.-Ahmd.) (ii) Mahindra & Mahindra Ltd. Vs CCE Aurangabad & others 2005 (190) ELT 301 (Tri.-LB) (iii) South Bihar Sugar Mills Ltd. Vs UOI 1978 (2) ELT J336 (SC) (iv) UOI Vs Delhi Cloth and General Mills Co. Ltd. 1977 (1) ELT J199 (SC) 6. Ld. Consultant countered the arguments of....
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....nd the SCN was issued on 30.01.2008 covering the period of three Financial years from 2004-05 to 2006-07 (upto 12/2006) by invoking proviso to Section 11A of Central Excise Act. It is pertinent to see that neither in the SCN nor in the impugned order, there is any iota of evidence brought out against the appellants on the wilful suppression of facts with intent to evade duty. The only remarks we find in the SCN at para-12 mentioning as "but for the investigation carried out by the officers non-payment of duty could not have come to light". On the contrary, it is evident from the statements of Shri A.C. Rajasekaran, Proprietor of the firm dt. 18.12.2006 and 15.10.2007 which is brought out at para-3 (a) to (i) of SCN wherein he categorically stated inter alia that they are only job worker carried out fabrication and received labour charges and also stated that he was not aware that such fabrication undertaken by them would attract excise duty. Further, in their reply to SCN they submitted before adjudication authority it was stated that they have not suppressed any facts with intention to evade duty as they were under bonafide belief based on the following Tribunal decisions such act....
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.... Dave, for the respondent. 2.1 The assessee was engaged in manufacturing of fabricated iron and steel structures. The Unit used to undertake processes such as cutting, bending, punching with the help of machines available in the factory. The Excise Officers visited the factory premises on 31-3-2000 on the basis of specific information that respondent had been manufacturing the excisable goods without obtaining registration and had thereby indulged into the evasion of duty. On the basis of material gathered during visit, the Commissioner of Excise issued show cause notice in March, 2003 calling upon the respondent as to why the excise duty to the tune of Rs. 41,04,217/- should not be levied on the finished goods which were allegedly cleared during the period 1998-1999 and 1999-2000. The assessee had already paid Rs. 1 lakh which amount was accounted for. 2.2 The assessee was also called upon in the show cause notice for explaining as to why the penalty and interest should not be levied. The said show cause notice culminated into order dated 20-5-2004 by the adjudicating authority who confirmed the demand of excise duty for Rs. 41,04,217/-. It also imposed the penalty of equivale....
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....ked. Mere failure or negligence in not taking license or not paying duty, is not sufficient for invoking extended period. 3.2 In the facts of the present case, it cannot be said that the conduct of the assessee was not bona fide. When the activity undertaken by it was not treated as manufacture, it would not have been expected to pay the excise duty. In order to show suppression or misstatement on the part of the assessee, a positive act has to be established. 4. In view of the above, no error was committed by the Tribunal in dismissing the appeal. It was not possible to countenance the contention of the learned counsel for the appellant that there was a suppression of facts and payment of duty was intentionally evaded by the assessee. 5. For the foregoing reasons, the question formulated is accordingly answered in negative in favour of the assessee. The appeal is dismissed being devoid of any merit as discussed above." The ratio of the Hon'ble High Court order is squarely applicable to the present case as the appellants carried out drillng/threading, welding, and bending of steel tubes/sheets on job work basis and received only labour charges and this confirms that the....