TaxTMI 
TaxTMI 
2023 (7) TMI 473
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.... II/2011 dated 29.02.2012 December, 2005 to March, 2010 Central Excise duty of Rs. 4,16,25,199/- along with interest and equivalent penalty 2. E/409/20 12 15/Commissioner/CE/ Kol- II/Adjn/2011-12 dated 21.03.2012 April, 2010 to January, 2011 Central Excise duty of Rs. 1,42,57,448/- along with interest and equivalent penalty 3. E/77127/ 2017 01-05/Commr/CGST & CX/HWH/Adjn/2 017-18 dated 22.09.2017 February, 2011 to November, 2015 Central Excise duty of Rs. 13,94,46,610/- along with interest and equivalent penalty 4. E/78084/ 2018 01-02/Commr/CGST & CE/HWH/Adjn/2018-19 dated 01.05.2018 December, 2015 to March, 2017 Central Excise duty of Rs. 3,93,25,766/- along with interest and equivalent penalty 2. In the individual appeals being Appeal Nos. E/410/2012, E/77128/2017 and E/78085/2018, the authorized representati....
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....ufacturer' and not a trader. On 24.12.2010 a show cause notice was issued to the appellant firm alleging that it had always declared to its customers that it was a manufacturer of transmission line accessories and hardware fittings, but in order to evade payment of Central Excise duty, the appellant firm had been showing the goods manufactured by it as traded goods. The appellant had purportedly contravened, amongst others, the provisions of Rules 4, 6, 8, 10, 11 and 12 of the Central Excise Rules, 2002 (hereinafter "Rules"), Sections 91 and 93 of the Finance Act, 2004 and Sections 126 and 130 of the Finance Act, 2007 and it was directed to show cause as to why Central Excise duty amounting to Rs. 4,05,32,570/- with Cesses payable thereon along with interest and penalty should not be recovered in terms of various provisions of the Central Excise Act, 1944 (hereinafter "Act"). It was also proposed in the show cause notice that the amount of Rs. 10.50 lacs already paid should be appropriated. Sri Dinesh Rungta, constituted attorney and authorized representative of M/s S. A. Enterprise, was also directed to show cause as to why personal penalty should not be imposed on him under Rule ....
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....re challenged by the noticees-appellants by way of further appeals filed before this Tribunal. 4. In the hearing before this Tribunal the appellants were represented by Shri J.P. Khaitan, Sr. Adv., assisted by Shri Agnibesh Sengupta and Shri Indranil Banerjee, Advocates. The Department was represented by Shri S. Mukhopadhyay, D.R. 5. The main arguments advanced on behalf of the appellants are summarized below : A. That Central Excise duty could not have been charged on presumption basis. The inventory dated 08.02.2010 at page 53 of the Paper Book relating to Ex. Appeal No. 392/2012 clearly showed that there was only one forging machine, one part of landis machine and one brick furnace inside the premises at 207/7, Belilious Road, Howrah-1. The Central Excise officers who had visited the appellant firm's factory had recorded in the said inventory that all the aforesaid machines were old and covered with dust and filth, and the landis machine had not even been installed. The appellant firm's stand was further supported by the certificate of the Chartered Engineer (page nos. 2628-2629 in Part 6 of the combined Paper Book filed before this Hon'ble Tribunal), ....
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....t goods had been accepted by several customers without embossing and that, only in some cases, initials like "S", "SA", or "SAE" were embossed by the suppliers or job workers for purpose of identification. E. That the quantum of goods obtained through job work was quite small in value over the period from April, 2011 to March, 2013 as against trading sales of about Rs. 47 Crores. In this regard, kind attention was invited to page nos. 2099 to 2197 in Part 4 of the of the combined Paper Book filed before this Hon'ble Tribunal. No job work was gotten done during April, 2013 to November, 2015 and, in any event, the appellant could not have been treated as the manufacturer in respect of the job workers' activities. F. That the Commissioner's finding regarding the appellant firm's failure to produce supporting documents proving physical movement of goods purchased from SubhLabh Enterprises to Viswanath Projects Ltd. was incorrect. Page nos. 702-711 of Annexure "A" of the reply against show cause notice dated 21.02.2014 clearly showed that the goods had been transported from the premises of SubhLabh Enterprises to the premises of Viswanath Projects Ltd. by t....
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..... Adv. who explained the crucial points involved most lucidly and by painstakingly taking this Bench through the voluminous Paper Books filed by his clients. We also record our appreciation for the learned DR for the revenue who was quite fair in his submissions. 8. Having given our anxious thoughts to the various issues involved in the appeals and upon appreciation of the entire gamut of evidence adduced by the parties, we are inclined to hold in favour of the appellants. We find that the legal issue arising for consideration in these appeals falls within a narrow compass - Whether a noticee can be charged with Central Excise duty solely on the basis of certain declarations/ representations made to its customers and without it being shown that the said noticee is a manufacturer within the meaning of Section 2(f) of the Act which defines "manufacture" and states that, amongst others, the word "manufacturer" is required to be construed accordingly? 9. We find that the show cause notice dated 24.12.2010, which was the first show cause notice in the matter, had been issued by primarily relying on the representations to various power supply corporations by the appella....
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....ned a consistent stand regarding her defense of trading against the charge of manufacturing. In such circumstances, the Commissioner of Central Excise, Kolkata- IV Commissionerate had been unjustified in holding "..... excisability and dutiability of the impugned materials have never been disputed...." at paragraph no 11.8 at page no. 30 of the Order-in-Original dated 29.02.2012. In arriving at his findings against the appellant firm, the Commissioner of Central Excise, Kolkata- 4 Commissionerate had disregarded the actual course of dealing between the parties concerned and, on the other hand, attached overwhelming importance to the appellant firm's declaration/representation given to power supply corporations of being a manufacturer and to the stipulations/ conditions of the tenders/ agreements. We agree with the submissions of Shri Khaitan on behalf of the appellant firm that the decisions of Aska Equipment, 2006 (202) ELT 795 --- 2010 (254) ELT A37 fully supported the appellants' case. 11. We observe that the enquiry and investigations leading up to issuance of the show cause notices dated 24.12.2010 and 24.03.2011, though giving rise to suspicion against the appellant ....
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....nesh Rungta read with the answer to question no. 11 of his statement dated 01.12.2010, there had been no acceptance of liability on part of the appellant firm and the alleged voluntary deposit had been made under misconception and to buy peace. This is further evidenced from use of the phrase "... towards our duty liability if accrued and on ad-hoc basis ..." in the appellant firm's letter dated 11.07.2007, under cover whereof the cheques for Rs. 10.50 Lakhs had been made over to the Department. In the said facts and circumstances, we must hold that the payment of Rs.10.50 Lakhs had been made without prejudice to the appellant firm's rights and contentions. IV. Quantum of goods obtained through job work was quite small as compared to the quantum of trading sales. No incriminating statement had been obtained from any job worker or specific evidence adduced by the revenue establishing unaccounted supply of raw materials/semi-processed goods to job workers by the appellant firm or clandestine receipt of finished goods from the job workers over and above the declared quantities. In any event, we hold that the appellant firm should not have been held liable to duty in res....
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.... such conclusions, we have perused the details and documents submitted by the appellant firm in relation to job worked goods for the period 2011-12 and 2012-13. We find that during the said period the appellant firm had maintained separate set of sale bills for sale of goods manufactured by job workers which the appellant firm referred to as 'manufacturing sales' and in respect of the others sale of goods purchased and sold as such, the appellant firm had maintained during the said two years a separate set of sale bills referred to as 'trading sales'. Notwithstanding that the appellant firm may have flouted the procedures under central excise law relating to job work, no duty liability could have been fastened on the appellant firm as regards job work activities undertaken by the job workers on principal-to-principal basis. D. Testing at third party premises : The adjudicating authorities should have observed that only visual/ physical inspection of the goods had taken place at the appellant firm's premises and that tests like galvanization test, mechanical test, slip load test etc. had been conducted in outside laboratories. Such position is evident from the documen....
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....he appellant firm liable solely on the basis that the aforesaid four disputed suppliers may have discontinued their business or failed to renew their enlistment with the Kolkata Municipal Corporation when investigations had been undertaken. We do not find sufficient justification for doubting the purchase transactions entered into by the appellant firm much prior to the date of investigation by the Department, especially when payment for the said purchases had been made by the appellant firm through banking channels. At paragraph nos. 7.12 and 7.26 at page nos. 21 and 26 of the impugned Order-in-Original dated 22.09.2017 sweeping observations have been made against the appellant firm to the effect that the appellant firm had failed to prove the existence of its supplier and that "...the suppliers/vendors list, who gave the Noticee No. 1 manufactured goods for trading purpose, proved to be non-existent thereby indicating to be an afterthought and thereby creating paper trail..". In our opinion, the said observations cannot be confirmed and are liable to be set aside. G. Physical movement of goods : We do not find proper justification to confirm the findings that the a....