TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 435
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....6/2013 Commissioner Central Excise (Appeal) Pune has held as follows: "I confirm and uphold the impugned Order in Original No P1/JC/52/CEX/2010 dated 15.11.2010 issued by the Joint Commissioner, Central Excise Pune 1 Commissionerate as just fair and legal. Consequently the appeals filed by the appellants is dismissed." Original authority has by his order in original held as follows: a) "I confirm and order to recover the total Central excise duty amounting to Rs 57,87,905/- (Rupees Fifty Seven Lakhs eighty Seven Thousand Nine Hundred and Five only) ( Cenvat duty Rs 56,27,392/- + Ed cess Rs 1,12,540/- + SHE Cess Rs 47,964/-) under the provisions of Section 11 A (2) of the Central excise Act, 1944 from M/s Siroz Consultants Private Limited, 227/228. 2nd Floor, B wing, Kohinoor Arcade, Nigdi Pune -44. b) I order to recover interest at the appropriate rate on the aforesaid determined duty amount from M/s Siroz Consultants Private Limited, 227/228. 2nd Floor, B wing, Kohinoor Arcade, Nigdi Pune -44, under the provisions of section 11AB of Central excise Act, 1944. c) I impose penalty of Rs 5,00,000/- (rupees Five lakhs only) under the provisions of Rule 25 (1) (c) of the centr....
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.... twenty only) in respect of SCN dtd. 31.03.2011; totaling to Rs. 1,19,64,875/- (Rupees One Crore Nineteen Lakhs Sixty Four Thousand Eight Hundred Seventy Five only) 5. I impose penalty of Rs. 5,000/- (Rupees Five Thousand only) in respect of SCN dtd 01.10.2010 & Rs. 5000/- (Rs. Five thousand only) in respect of SCN dtd. 31.03.2011; (total Rs. 10,000/-) upon M/s. Sriroz Consultants Pvt. Ltd., Ambike Chal, Near Gram Panchayat Office, Chikhali-Village, Pune District under Rule 27 of the Central Excise Rules, 2002. 2.1 Appellant are engaged in the manufacture of "Green Houses" classifiable under Chapter Heading 9406 of Central Excise Tariff Act, 1985 (hereinafter referred to as the 'Tariff Act'). 2.2 Appellant is engaged in the activity of sale of green house material and construction of greenhouses as per the requirement of the farmers/customers. After obtaining orders from the farmers/customers, the appellant processed the raw materials viz. pipes/angles in their workshop by carrying out the processes of cutting, bending, drilling, welding, etc. so as to give them a form of parts/elements of greenhouse and thereafter cleared them to the customer's site for the const....
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....the provisions of Section 11A(1) of the Central Excise Act, 1944; iii. Interest on the above Excise duty, should not be charged and recovered from them under Section 11AB of the Central Excise Act, 1944; iv. Penalty should not be imposed upon them under the provisions of Rule 25(1)(a) and 25(1)(c) of the Central Excise Rules, 2002; and v. Penalty should not be imposed upon them under Rule 27 of the Central Excise Rules, 2002 for not obtaining Registration under Section 6 of the Central Excise Act, 1944 read with Rule 9 of the Central Excise Rules, 2002. 2.6 The first two show cause notices covering the period from February 2005 to October 2009 were adjudicated by the Joint Commissioner vide his order referred in order of Commissioner (Appeal) referred in para 1.2 above, holding as follows: a) I confirm and order to recover the total Central Excise duty amounting to Rs 57,87,905/- (Rupees Fifty Seven Lakhs Eighty Seven Thousand Nine Hundred and Five only (Cenvat duty Rs 56,27,392+ Ed. Cess Rs 1,12,549/- + SHE Cess Rs 47,964/-) under the provisions of Section 11 A (2) of the Central Excise Act, 1944 from M/s Siroj Constructions Pvt Limited 227/228, 2nd Floor, B wing Kohinoor....
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....appellants, are not parts/elements of greenhousel poly house. The said goods are not even bought together by the appellants. In many cases, the appellants only undertake erection work and the material are supplied by their customers. Therefore, it is incorrect to suggest and hold that the appellants have manufactured pre fabricated buildings. Even the Department admits that, the bought out items are delivered to the customer's site directly. * The activity of cutting, bending etc does not amount to manufacture of parts of greenhouse/polyhouse. * Executive Engineer, Fabrication Workshop MPSEB [2004 (178) ELT 440 (T.)] Affirmed by Supreme Court at 2015 (324) ELT A196 (S.C.) * Servo-Med Industries [2015 (319) ELT 578 (S.C.)] * Ajni Interiors [2008 (230) ELT 562 (T.)] Affirmed by Supreme Court at 2016 (339) ELT A220 (S.C.) * Elecon Engineers [2005 (190) ELT 195 (T.)] Affirmed by Supreme Court at 2012 (277) ELT A84 (S.C.) * EPC Irrigation Ltd. Vs. CCE 2002 (139) ELT 84 (T.) Affirmed by Supreme Court at 2010 (254) ELT A99 (S.C.) * Faridabad Iron & Steel Traders Association Vs. Union of India 2004 (178) ELT 1099 (T.) Affirmed by Supreme Court at 2005 (181) ELT A68 (S.C.)....
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....uting the differential duty demand in the show cause notices, Respondent incorrectly included labour charges, Value Added Tax, export turnover on which excise duty cannot be levied in the present case. * benefit of cum-duty benefit must be granted to the appellants as the appellants have not recovered any excise duty from the farmers. Therefore, sale price of the materials should be treated as cum-duty. Kindly refer: * Meghdoot Gramoudyog Sewa Sansthan [2014 (312) ELT 699 (T.)] * Hi-Line Pens Ltd. [2017 (5) GSTL 423 (T.)] * Samyu Glass Pvt. Ltd. [2017 (6) GSTL 330 (T.)] * In the instant case, extended period of limitation cannot be invoked as mere failure to declare, without intention to evade payment of duty, does not amount to suppression of facts. The appellants were under bonafide belief that, no duty is leviable on the activity carried out by them. * Penalty is not imposable on the appellants, as they are not engaged in any activity amounting to manufacture and therefore question of obtaining registration does not arise. * Interest is not recoverable from the appellants, as it is a settled principle of law that, in cases where the original demand is unsustainable....
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....ement given by the MD of the company. MD in his statement stated that It is apparent that the claims of the appellants that they are just purchasing materials and selling the same & that they merely collect bought out duty paid items and supply them does not stand scrutiny. * It is further confirmed from perusal of copies of sample purchase orders which were handed over by the Appellant during the course of adjudication proceedings; they themselves have admitted that they undertake cutting and bending of the Pipes & Tubes which are then supplied by them. They also further supply Polythene, Polyfilm, Curtain Rings, Pulley and Locking Wire as evidenced by said documents. * For the sake of repetition it is reiterated that mere cutting, bending etc. of the pipes, sheets etc. would not amount to manufacture, however, that cutting of the materials to specific dimensions and supply of pre-defined quantity of such various components for assembly at customers site, would amount to manufacture since a new and distinct product emerges out of such assembling of the components. Commissioner (A) has accordingly concluded that goods leaving workshop/premise of the appellant are nothing but el....
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....Green House has a specific entry under CH 9406 of the First Schedule to the CETA, 1985 w.e.f. 1.3.2005. The green house is covered under the generic heading "Prefabricated Buildings". Theirs was not the prefabricated buildings, and hence they were not liable for taking the Registration and paying the duty thereon. Mere entry in the Tariff did not make any goods excisable. They were not manufacturing any type of prefabricated buildings falling under CH 9406 of CET. Similarly they did not manufacture "GREEN HOUSE" or any HOUSE. Therefore they were not covered by the both the entries viz. "prefabricated buildings" or "Green House". Their items sold to the Customers were not the item which would be covered under "Prefabricated Buildings" or "Green House". As per the Explanatory Chapter Note 4, of the CH-94, it was very clear that their goods being traded goods were not fabricated buildings. There was no word Green House in the category of Pre fabricated Buildings. All others including housings/workplace shops, sheds and buildings were only covered. The pipes / tubes were not covered. (vii) Yes, they were engaged with the activity of sale of the poly houses not green houses materials.....
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....h is specified in relation to any goods in the section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or (ill) ............................................................................... and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account; 24. I further find that C.B.E.C's vide a section 37B Order No. 58/1/2002 -CX dated 15.01.2002 on the subject "Excisability of plant and machinery assembled at site", inter alia, for the purpose of uniformity in connection with classification of goods erected and installed at site, has clarified as under: (i) For goods manufactured at site to be dutiable they should have a new identity, character and use, distinct from the inputs/components that have gone into its production. Further, such resultant goods should be specified in the Central Excise Tariff as excisable goods besides being marketable i,e, they can be taken to the market and sold ( even if they a....
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.... Each case will therefore have to be decided keeping in view the facts and circumstances, particularly whether it is practically possible (considering the size and nature of the goods, the existence of appropriate transport by air, water, land for such size, capability of goods to move on self propulsion -ships- etc.) to remove and sell the goods as they are, without dismantling into their components. If the goods are incapable of being sold, shifted and marketed without first being dismantled into component parts, the goods would be considered as immovable and therefore not excisable to duty. (vii) When the final product is considered as immovable and hence not excisable goods, the same product in CKD or unassembled form will also not be dutiable as a whole by applying Rule 2(a) of the Rules of Interpretation of the Central Excise Tariff. However, components, inputs and parts which are specified excisable products will remain dutiable as such identifiable goods at the time of their clearance from the factory or warehouse. (viii) The intention of the party is also a factor to be taken into consideration to ascertain whether the embedment of a machinery in the earth was to be te....
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....erely collect bought out duty paid items and supply them does not stand scrutiny. The activity indicated on the documents as stated in sub para E above, clearly proves that it is for the assembly of shades in nurseries which are nothing but Green Houses which as indicated in the impugned show cause notices are structures made of pipes grounded to the civil foundation and covered with polythene cover, net, etc. to provide a controlled and more suitable environment for crops and that as per Harmonized System of Nomenclature (HSN), Heading No. 94.06 covers "Pre-fabricated buildings" of all materials which can be designed for a variety of uses, such as housing, worksite accommodation, offices, schools, shops, sheds, garages and green houses are generally presented in the form of: --Complete building, fully assembled, ready for use; --Complete buildings, unassembled; --Incomplete buildings, whether or not assembled, having the essential character of pre-fabricated buildings: It cannot be a case for the Noticee that just because they call the structure a Poly House, it is not a Green House. In the circumstances, I have no doubt in arriving at the conclusions that the goods leav....
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....es and plates though of different sizes, and merely holes are punched and screws fitted. Unlike in liquid mixtures, the raw material of iron and steel or wood will retain their identity, but it is precisely their being cut, and designed, punched and fitted to make an article commercially known that involves manufacture of an article distinct from the angles, sheets, tubes etc. used in it. Mere drilling holes or mere cutting jobs in isolation may not by themselves involve manufacture of an article, but, converting raw material like angles, tubes, plates. etc. to bring about a distinct commodity will surely amount to manufacture as it is not "mere" drilling holes or cutting, but the activity is aimed at bringing about a distinct commodity. Thus, making of porta cabin from iron and steel angles with, roof framework i.e, trusses, doors, windows, ladders in it made by drilling holes and cutting the raw material, will be a movable structure having identity as a distinct marketable commodity. When the porta cabin is dismantled it nonetheless remains the manufactured products i.e. porta cabin dismantled or disassembled. The material such as angles, rods, shades, sections, plates, tubes, et....
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....t the time when they were manufactured as parts of structures had however, crystallised, and it was possible to ascertain the same even after they got fixed by referring to the quantities of the raw material that went into making them for the purpose of ascertaining their value. Therefore, any enquiry into the raw material used was only for the purpose of ascertaining the value of the parts of the structures which were already fabricated at the site, and was not an enquiry for imposing excise duty on the raw material, i.e. members such as angles, plates, etc. It was an enquiry to ascertain the value of the parts of the structures which were fabricated such as trusses, ladders, doors, windows, columns, beams, rafters, glazing frames, crane girders, hoppers, bracings, gable runners, platform, hand-rails, gratings rails, walk-ways, stairs, gutter support, ladders, railings etc. As per the contractual terms and the relevant statements which clearly indicate that the parts of the structure were first fabricated on the ground and thereafter they were used for erecting the designed structures. All these parts of structures which were fabricated were distinct marketable commodities the exi....
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.... culpability of the 'Noticee' regarding the their failure to get themselves registered under Section 6 of the Central Excise Act, 1944 read with Rule 9 of the Central Excise Rules, 2002 in spite of being engaged in manufacture of Green House', and their clearance without following procedures prescribed under the Act' and the Rules clearly stands confirmed, more so, since the noticee continued his behavior even after the clarification on the issue advanced to them, which apparently was in fact sought by them. Instead of following the law they have sought to adduce a catena of judgments as relied upon which are clearly unfounded in the context and are thus of no help to them. 34. I therefore hold that the activities carried out by the 'Noticee', during the period November 2009 to December 2010, amount to manufacture of Green Houses falling under Chapter Heading No. 9406 of the First Schedule to the Central Excise Tariff Act, 1985. Consequently, the Central Excise duty amounting to Rs. 1,19,64,875/- (Rs. 37,96,355/-for the period from November 2009 to March 2010 + Rs. 84,68,520/- for the period from April 2010 to December 2010) is therefore liable to be confi....
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....to the extent of Rs. 50 lakhs on Sh. D.I. Desarda, Sr. V.P. (Taxation) and Rs. 10 lakhs on Sh. Vijay Singhvi, Factory Manager and A.S. under Rule 26 of the Central Excise Rules, 2002. Aggrieved by the impugned order, appeals have been filed by the assessee as well as the other company employees who have been penalised. 3. ............. 4. ............... 6. We have heard very elaborately the submissions from both sides and have carefully perused the appeal record. The appellant has received orders from the Government of Rajasthan for supply of green houses. Such green house are to be supplied to specific size for which orders have been placed. The appellant is required to assemble such green house at the specific site and handover the same. In the appellant's factory some of the components required for such green house are fabricated. Such components include pipes, girders, columns, etc. The rest of the items required for putting together in green houses are procured from outside. These include minor components such as nuts, bolts, etc., and also major elements such as glass/polyfilm sheets which are required for use in the ceiling as well as wall of the green houses. It so h....
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....y reference : "Note 4 of the Chapter 94 of CETA 1985, provides that - "4. For the purposes of heading 9406, the expression "pre- fabricated buildings" means buildings which are finished in the factory or put up as elements, presented together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings." 8. The HSN Explanatory Notes to 9406 has provided guidance as to the scope of pre-fabricated buildings. For ready reference the same is reproduced below : "This heading covers pre-fabricated buildings, also known as "industrialised buildings of all materials. These buildings, which can be designed for a variety of uses, such as housing, worksite accommodation, offices, schools, shops, sheds, garages and greenhouses, are generally presented in the form of : - complete buildings, fully assembled, ready for use; - complete buildings, unassembled; - incomplete buildings, whether or not assembled, having the essential character of pre-fabricated buildings. In the case of buildings presented unassembled, the necessary elements may be presented partially assembled (for example, walls, trusse....
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....red from outside. However, the appellant will be entitled to the benefit of Cenvat credit on goods procured from outside subject to verification of such entitlement on the basis of documents to be produced by the appellant. The Adjudicating Authority will allow such Cenvat credit after verification of documents which will be produced by the appellant, as per law. 14. It is also fairly well settled that the total consideration received is to be considered as cum-duty price and such benefit will be entitled to the appellant. 15. In view of the above discussions, demand for Central Excise duty under [Heading] 9406 made in the impugned order is upheld but with the modification that the appellant will be entitled to Cenvat credit subject to the verification of documents. They will also be entitled to the cum-duty price benefit which will be worked out and extended by the adjudicating authority." 4.5 The order of tribunal in case of Jain Irrigation was further rectified, by the order reported at 2019-TIOL-271-CESTAT-Del, in terms of Section 35 C (2) of the Central Excise Act, 1944. By the said order following has been held: "2. The Ld. Counsel for the appellant/applicant states th....
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..... As asserted by the assessee and held by the Tribunal, the assessee had made ail necessary declarations and, clearances were made with concurrence of the Department. There was no misdeclaration or a willful misstatement with a view to avoiding duty. The invocation of extended period of limitation, therefore, was rightly held not permissible. Tax Appeal is therefore, dismissed. b. For limitation-Ground not decided. On scope of doubt, interpretational issue- PADMINI PRODUCTS V/s COLLECTOR OF C. EX 1989 (43) E.L.T. 195 (S.C.) = 2002-TIOL-289-SC-CX . c. No positive evidence of tax evasion, no deliberate act- COLLECTOR OF CENTRAL EXCISE V/s CHEMPHAR DRUGS & LINIMENTS 1989 (40) E.L.T. 276 (S.C.) = 2002-TIOL-266-SC-CX d. On personal penalty-where appellant is working as on employee, not having any independent existence, no motive can be attributed.-Z. U. ALVI v/s COMMISSIONER OF C. EX., BHOPAL, Bhopal. 2000 (117) E.L.T. 69 (Tribunal) = 2002-TIOL- 281-CESTAT-DEL . 4. So far the other two appellants are concerned namely, Vijay Singhvi and D.I. Desarda who were the employees of the company and have been visited with penalty as noticed by Tribunal in Para 2 of the Final Order. Howeve....
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....proper shape to this raw material for installation of greenhouse/poly house. The MD of the company has informed that after processing the bought out items they are cleared along with some bought out items to the customer's site for erection of greenhouse/ polyhouse/ agriculture shed. In other words, the polyhouse/ green house is put up as elements to be assembled at site. It is therefore apparent that the claims of the appellants that they are just purchasing materials and selling the same & that they merely collect bought out duty paid items and supply them is not correct in as much as these goods are thereafter assembled and installed at the customer site by the appellant to bring into existence the "greenhouse". Commissioner has in para 27 and 28 of his order elaborately referred to the documents and records to arrive at the findings that the goods supplied were essentially complete set of components for erecting and installing the greenhouse. 4.8 Shri C M Sane, Managing Director of the Appellant, has in statements relied upon by the revenue stated as follows: Relevant portion from statement dated 31.1.2008 of Mr. C. M. Sane is extracted below: "Q1. Please explain the a....
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....w material procured by us. Most of the material is not processed. Out of around 20 items used for polyhouse, 15 items like polythene sheets, shade net, nuts, bolts, most of the pipes, wire etc. are sent as it is without any process. These items are already excise duty-paid and no CENVAT credit is availed by us. The processes we carry out are bending, drilling and cutting of few pipes, which do not in any way change the form, identity and content of the material. In many cases, the material is directly sent from the supplier's end to the site, where minor processes like dripping, bending are done. In majority of the cases, the raw material is supplied to the customers without any process being carried out by us. Whenever we carry out assembly or erection of polyhouses, in those cases, we do carry out processes like bending, drilling, cutting, etc. at our end. Q2. How do you carry out erection/assembly? What are the activities you carry out at sites for bringing polyhouses into existence? Do you have your own labourers? Ans. In order to complete the contract of polyhouse, land is developed, excavation is done and civil foundations are made. Various pipes are kept upwards upon....
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....e. As the issue regarding service tax has already been decided by the Additional Commissioner, C.Ex., Pune I vide aforesaid OIO, I do not consider the arguments concerning the service tax, for the purpose of this case." 4.10 The issue whether the activities undertaken by the appellants do amount to manufacture of Prefabricated building -Green House or not is a question of fact and needs to be ascertained from the facts available on the records. In the paper book filed along with the appeal, appellants have enclosed a number of purchase order and invoices which were in reference to the supply of raw material, and the material. In fact there are no purchase orders/ invoices for the supply of Green House. No clear cut findings have been rendered by any authority on this aspect. Further whether appellants are paying service tax in respect of the erection and commissioning activities undertaken at the site, is also not very clear. Joint commissioner has in para17 of his order referred above has recorded the factum of issuance of notice demanding service tax and its adjudication. But do not records anything further. All these facts need to be ascertained and final view needs to be taken....
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.... on the same during the relevant period. The Learned Authorised Representative has further submitted that appellant used to split the total price/consideration into two invoices; in one invoice they used to reflect the value of the material and in the second invoice, the cost of labour for erection and commissioning of the materials fabricated in their factory and cleared to their site. It is his contention that both the invoices are raised simultaneously and mostly on the same day for clearance of Greenhouse/Polyhouse which attracts classification under Chapter sub-heading 9406 0019 of Central Excise Tariff Act, 1985 and definitely exigible to duty. Regarding service tax on erection and commissioning charges recovered from the customers, the Learned Authorised Representative for Revenue submits that it is not clear from the records whether the service tax is paid separately on the items procured by the customers of the assessee-appellant or it is the pre-fabricated items which were assembled at site by the appellant. To ascertain the said facts, he has no objection in remanding the matter to the adjudicating authority for scrutinizing of the same. 6. We find, the short issue in ....