TaxTMI 
TaxTMI 
2017 (11) TMI 281
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....h January 2004 and 5th March 2004. 2. Appeal no. E/2572/2006 emanates from show cause notice dated 3rd February 2004. The other two appeals, viz. E/2560/2006 and E/1255/2007, emanate from the other show cause notices. The demands confirmed and penalties imposed by the adjudication orders are as under: S. No. Appeal No. Duty Penalty 1. E/2572/2006 Rs. 30,776/- Rs. 30,776/- 2. E/2650/2006 Rs. 13,43,674/- Rs. 13,43,674 3. E/1255/2007 Dropped demand of Rs. 32,36,085 /- -- 3. The respondent got substantial relief by way of reduction in the duty that had been proposed in the show cause notice and penalty was not imposed. In the adjudication order involved in appeal no. E/2572/2006 the marginal duty demanded is assailed by the Learned Authorised Representative for Revenue on the ground that the lower authorities had failed to examine the substantial evidence but appeared to have been swayed by the submission of respondent that duty liability had been discharged on the value of such exempt raw-materials that was included in the assessable value of ineligible finished goods. It was contended that the respondent frustrated the inten....
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....challenges levy of duty and penalty, the respondent asserts the appeal no. E/1255/2007 relates to penalty only. However, cause of action in both the appeals are same. 8. Further submission of Revenue is that the misplaced sympathy of the first appellate authority is evident from the acknowledging of the claim of the respondent that the inputs had been utilised in the manufacture of dutiable goods as well as for repair for rendering the finding that there was no violation of procedures prescribed by law. According to him, if the notification prescribes a specific use of duty-free raw materials for manufacture of duty-free output, that object should not be defeated and the cases in the present dispute arose from clear violation of law that are not deserving of any protection. To substantiate this, it is contended that while the adjudicating authority, in that matter disputed in appeal no. E/2572/2006, adverts to the production of all details by the assesse, paragraphs 9 and 10 of the adjudication order demonstrates otherwise. So far as appeal no. E/1255/2007 is concerned, Learned Authorised Representative submits that the impugned order erred by failing to bring on record th....
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....ners Pvt Ltd v. Commissioner of Central Excise [2008 (221) ELT 281 (Tri.-Mumbai)] which held that there is no contravention of Chapter X procedure if exempted goods procured for manufacture of export goods are used for clearance of goods domestically to contend that respond had not violated any law to justify invoking of section 11A of Central Excise Act, 1944 and, consequently, precluding scope for invoking section 11AC of Central Excise Act, 1944. It is also his further submission that rule 196 of Central Excise Rules, 1944, and corresponding provision in Central Excise Rules, 2001 prescribe that section 11AC is liable to be invoked only in the circumstances enumerated therein owing to which appeal of Revenue lacks merit. 14. We take note that there are no cross-objections against the appeal of Revenue and that the respondent is, thereby, is barred from raising any grounds that were not before the lower authorities. Before proceeding to record our findings, we must necessarily peruse the exemption notification that has given rise to these disputes. The relevant extract of notification no. 5/1998-CE dated 2nd June 1998 is: In exercise of the powers conferred by s....
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....sor Rules of 2001 and the erstwhile Central Excise (Removal of Goods at Concessional Rate of Duty for the Manufacture of Excisable Goods), 2001, had procured parts and components, castings , electric motors and parts , bar material and cables without payment of duty. 16. Investigations revealed that, between January 1999 and February 2003, the Chinchwad unit had used these inputs for manufacture of pumps other than water-handling that were cleared on payment of duty while also clearing some as spares and others as bought out items owing to which the adjudicating authority confirmed demand of Rs. 13,43,674 under section 11A of Central Excise Act, 1944, along with the interest thereon, and imposed a penalty of like amount under section 11 AC of Central Excise Act, 1944. In impugned order-in-appeal no. PI/65/06 dated 20th February 2006, Commissioner of Central Excise (Appeals), Pune-I restricted the demand to Rs. 39,146 on inputs cleared as bought out items while dropping the demand of Rs. 12,55,467 pertaining to clearance as spares and Rs. 49,877 used for manufacture of dutiable pumps. ....
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....ide legal sanctity for payment of duty by the buyer of goods cleared without payment of duty. This has been duly acknowledged in the order of the lower authority for confirmation of the demand on goods cleared as such, i.e., bought out. 20. For the goods that were not so cleared but were used in manufacture of goods other than that intended in the exemption notification or used otherwise, the first appellate authority has considered the payment of duty on clearance at a value inclusive of the inputs to be sufficient compliance. The specific provision in the Rules supra for clearance as bought out items does not cover other clearances. All manufactured goods, to the extent that they are not exempted, are required to be cleared on payment of duty. The exemption availed on the goods procured by the appellant enabled the manufacturer to clear the goods without payment of duty but which, nevertheless, requires the recipient to discharge the burden of duty liability in the event of non-utilisation of the goods for the intended purpose. The liability to discharge duty on the goods manufactured out of the inputs so procured remains unchanged and is mandated in the Cent....