TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1036
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....ecords, it was alleged that appellants cleared M.S. billets and M.S. ingots without payment of duty after conversion. The appellants have entered into conversion agreements with M/s.Kanishk Steel Industries Ltd., Gummidipoondi, Kanishik Steel Industries Ltd., Bangalore and M/s.Sonal Vyapar Ltd., Salem. As per the agreement, appellants received MS scrap, H.M.S, L.M.S., Scrap turnings and boring scrap and sponge iron etc. for conversion into M.S. Billets/ingots. It was alleged that after conversion the appellants cleared the finished goods without payment of duty to their principal suppliers. There was no evidence to show that appellants or the principal supplier claimed the benefit of exemption under Notification No.214/86. No declaration filed by the principal supplier with jurisdictional Central Excise authority under whose jurisdiction the job worker was located. Accordingly, a show cause notice dt. 1.9.2008 was issued to the appellants demanding excise duty under proviso to Section 11A(1) on the total quantity of MS billets manufactured and cleared to their principal raw material supplier. Notice was also issued to Shri Arvind Gupta, President of the company, Shri Ashok Bhora, D....
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....department never raised any doubt or any objection on the intimation letters submitted to the AC Division. 5. On merits of the case, he submits that they have not violated any procedure and being a job worker, they received the inputs, processed and after conversion the MS Ingots/Billets were returned to the principal manufacturers under valid invoice cum delivery challan. Both receipt of the raw material and clearance of the goods were accompanied by valid documents. He submitted copies of both supplier's invoice and delivery challans. In the said invoices, it is clearly mentioned that the goods were sent for conversion under Rule 4(5)(a) of CCR. They have returned the entire goods after conversion and also returned the scrap arising out of manufacture to the respective supplier/manufacturer who has discharged the excise duty on their finished goods manufactured out of MS Ingots/Billets. Since they are being a job worker they were not required to pay excise duty as duty is to be discharged by the principal manufacturer on their final products. 6. Ld. Advocate further submits that they have accounted that quantity of raw material, MS Scrap received and quantity of MS billets ....
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.... appellant submitted written synopsis along with paper book containing relevant documents. He submits that the Range Superintendent of Central Excise, Mayiladutharai, on scrutiny of ER 1 Returns, sought clarification from the appellant vide his letter dt. 31.8.2006 and again on 23.10.2006 on clearance of billets/ingots manufactured by them, both on payment of duty and without payment of duty. Thereafter summons were issued, statements were recorded from Shri Arvind Gupta, President of the company and statement was recorded from Shri Ashok Bhora, Director of Kanishk Steel Industries. He referred to letter dt. 1.4.2005 addressed to AC by the appellant and submits that it is only an intimation of receiving the raw materials under Rule 4(5) (a) of CCR and returning the goods to the principal manufacturer. He referred to invoices issued by the appellant under Rule 11 of CER where the MS billets have been cleared to M/s.Kanishk Steel Industries and only the quantity and value is mentioned and there is no conversion charges mentioned in the invoice. The invoice bears the rubber stamp affixed stating that "raw materials sent for conversion under rule 4/5(a)". He further submits that appell....
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.... were directly sent from CHA to appellant's unit and no credit was taken by them. 7.1 He further submits that appellants have misdeclared in their ER-1 returns that they are following the procedure prescribed under Rule 4 (5) (a) of CCR. Since the principal manufacturer has not complied with the condition of the notification 214/86, Rule 4(5) (a) is ab-initio and not applicable. No monitoring done by the department either at the principal manufacturer's end or at the end of the job worker. Therefore he submits that extended period has been rightly invoked as there is clear cut suppression of facts. Appellants relying on letters addressed to the AC, Salem is only an intimation. Mere filing of ER-1 returns is not equivalent to compliance of conditions of exemption notification and Section 11AC has been rightly invoked and the adjudicating authority has rightly confirmed the demand and imposed penalty on the appellant under Section 11AC as well as imposed penalty on the co-noticees. He relied on the following citations :- (1) Kartar Rolling Mills Vs CCE New Delhi 2006 (197) ELT 151 (SC) (2) Desh Rolling Mills Vs CCE Delhi 2000 (122) ELT 481 (Tribunal) (3) Jinabakul Forg....
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....s to demand of excise duty on the goods manufactured by the appellants under job work Notification No.214/86-CE. In the impugned order, the adjudicating authority has demanded Central Excise duty on the MG ingots/billets manufactured from MS scrap received from the principle suppliers and returned to the principal manufacturer. The demand pertains to the period Jan 2005 to March 2007. The facts of the case are already set out as above. Appellants entered into agreement with M/s.Kanishk Steels Industries, Gummidipoondi, M/s.Sonal Vyapal Ltd., Salem, M/s.Radice Ispat (India) Ltd., Calcutta and M/s.Kanishk Steel Industries, Bangalore. Adjudicating authority in the order dealt the issue in detail while demanding duty on the MS ingots and billets on the ground that in terms of Notification No.214/86 no declaration has been filed before the jurisdictional Central Excise Authorities under whose jurisdiction the job worker was located. Once the condition of notification No.214/86 is not complied, duty has been demanded on the appellant. Revenue heavily relied on the conditions of the notification No.214/86 which has not been complied. On the other hand, appellants contended that entire dem....
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....onal ACCE's office as evident from the paper book. Further, we find that jurisdictional authorities issued end-use certificate dt. 22.12.2005 wherein the DCCE, Karaikal certified that MS scrap received from Radice Ispat (India) Ltd. were fully utilized in the manufacture of MS ingots and billets. We find that appellants were filing ER-1 return. On perusal of copy of ER-1 returns, wherein they have declared clearance of MS ingots for conversion. We also find that the appellants unit was audited by the internal audit as well as CERA audit and periodical returns were filed during the relevant period. Perusal of documents reveal that the said invoices of clearances of MS ingots under job work were seen by Audit and accepted and not raised any objection on the clearances whereas the jurisdictional Superintendent on verification of ER-1 sought for clarification from the appellant for the clearance of the goods without payment of duty vide letter dt. 31.8.2006. The special counsel strongly contended that department has come to know the fact of clearance of goods without payment of duty on scrutiny of returns by the jurisdictional Range Superintendent on 31.8.2006 and immediately after....
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....ression has been used in the proviso to Section 11A of the Act accompanied by very strong words as fraud or collusion and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. 11. Factual position goes to show the Revenue relied on the circular dated 23-5-1997 and dated 19-12-1997. The circular dated 6-1-1998 is the one on which appellant places reliance. Undisputedly, CEGAT in Continental Foundation Joint Venture case (supra) was held to be not correct in a subsequent larger Bench judgment. It is, therefore, clear that there was scope f....
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.... invoice bears the clear endorsement sent for conversion under Rule 4 (5) (a). The revenue's main plea is that the main condition of the notification stipulates filing of undertaking by the principal manufacturer before the jurisdictional central excise authorities where the job worker is located and the same has not been complied by them and no declaration filed by the principal manufacturer. On perusal of letter dt. 10.11.2004, we find the principal manufacturer Sonal Vyapar (India) Ltd. filed undertaking before ACCE, Salem. Revenues contention that the principal manufacturer has not filed required undertaking before the jurisdictional ACCE, Karaikal. We find that the principal supplier Sonal Vyapar (India) Ltd. is registered under the Central Excise with ACCE, Salem. It is not the case that the principal supplier has not filed any declaration. In the said declaration where the principal supplier had clearly intimated the sending of raw materials for job work under notification No.214/86. Further, appellants also in their letter dated 15.11.2004 addressed to the jurisdictional ACCE, Karaikal informed the job work. We find that no SCN has been issued or any investigation carrie....
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....ersal Radiators Ltd. (supra) and other citations. The same are not applicable to this case. In this regard, there are series of Tribunal's decisions on this issue where the Tribunal has held that benefit of notification No.214/86 cannot be denied and duty cannot be demanded on the job worker. In this regard, we rely this Tribunal decision in the case of Aggarwal Rolling Mills Vs CCE New Delhi (supra). The relevant paras 20 & 21 are reproduced as under :- "20. Furthermore, if an assessee firm was a small? scale manufacturer and therefore, governed by the SSI Notification and at the same time some items manufactured by it were entitled to benefit of some other notification the same could not be denied unless it was specifically so stated in either one or both of the notifications. Thus e.g. some notifications themselves indicate that benefit thereof shall not be available if the assessee has already availed of the benefit under Rule 56A and 57A (as for example Notification No. 134/94). Since there is no such stipulation in the Notification 214/86 the benefit thereof could not be denied to a person enjoying SSI benefit. 21. It is also significant that Notification 1/93 is? an SSI ....
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....ir customer was removed by the latter on payment of duty for home consumption from their factory. This claim has not been contested by the Revenue. In the circumstances, the appellants were eligible for the benefit of the Notification subject to the surviving condition that the raw material-supplier gave an undertaking to the Asst. Commissioner or Deputy Commissioner of Central Excise having jurisdiction over the appellants factory to the effect that the goods would be removed (by the raw material-supplier) on payment of duty for home consumption. The demand of duty is consequential to non-fulfillment of this condition. The appellants have resisted the demand of duty on the ground that it was for the raw material-supplier to comply with the said condition. It is their further case that the department could have recovered duty on the subject goods from M/s. Vijay Detergent Products (P) Ltd. on the ground of non-fulfillment of the said condition. We find that the Tribunals decision in Aggarwal Rolling Mills (supra) supports this case of the appellants. No binding decision to the contrary was cited by the DR. 4. In the result, the impugned order is set aside and this appeal is all....