TaxTMI 
TaxTMI 
2026 (7) TMI 1277
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntative Shri. Aayush Rungta (Appellant 2), under Rule 26 of the Central Excise Rules. 2. The facts of the case are that the appellants were traders and had purchased and sold goods. The appellants had represented only to Power Supply Corporations that they were manufacturers in order to procure business since such Corporations placed orders only on manufacturers. Accordingly, proceedings were initiated against the Appellants on the allegation that the Appellants were the actual manufacturers of the goods. As the Appellants have not paid Central Excise duty on the goods cleared by them during the period April, 2017 to June, 2017, Show Cause Notice 29th August, 2018 was issued to the Appellant demanding Central Excise duty of Rs. 93,79,002/- for the goods manufactured and cleared by them. 3. The Appellants submits that during the relevant period, they got a few items manufactured from job workers to whom raw materials were supplied. The quantum of goods obtained from job workers was quite small (Rs.22,05,220.05) in value as against trading sales of about 8,22,05,801.70. As per law, the job workers were the actual manufacturers and not the appellants. The appellants did not have....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de that the assessee was a manufacturer within the meaning of the Central Excise Act. Department's appeal in respect of the said decision of the Tribunal was dismissed on the ground of delay as also on merit as reported in (2010) 254 ELT A37. The facts of this case cited is similar to the present case on hand and hence the ratio of this decision is applicable to this case. 3.3. Further, the Appellant submits that on the very same issue, first show cause notice dated December 24, 2010 was issued by the Additional Director General of the Directorate General of Central Excise Intelligence in respect of the period December 2005 to March 2010. The said Notice was adjudicated by the Commissioner vide order dated February 29, 2012, wherein duty was demanded from the assessee only in respect of electrical hardware supplied to Power Supply Corporations to whom the appellants had represented that they were the manufacturer. Sales to private parties of such hardware as also sales of wires, pipes, bars, angles and channels were excluded from the purview of the demand. Same course of action was followed in the next order for the period April, 2010 to January, 2011. However, a demand had been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e goods were actually manufactured at the declared premises. 3.5. The records do not show that the appellants admitted that initials like "S", "SA" or "SAE" were trademarks and the Commissioner (Appeals) was not justified in holding to the contrary. The Commissioner (Appeals) should have accepted the appellants' explanation that the said initials were got embossed on the goods by the suppliers or job workers for the purpose of identification in case the goods were required to be replaced due to any sort of fault. The appellants had included in the annexures to their replies documents to show that goods were accepted by the Power Supply Corporations even without such embossing. 3.6. Thus, the appellant company submits that they are not liable for any duty, interest or penalty. The second appellant all along acted bona fide in the discharge of his duties as authorized representative and was not liable for any penalty under rule 26. The second appellant did not know nor did he have any reason to believe that the goods of the first appellant were liable to confiscation. No duty was evaded. No fact was suppressed. There was no contumacious or dishonest conduct or willful disregard....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... rely upon the decision of the Tribunal in the case of Aska Equipment Pvt. Ltd. v Commissioner of Central Excise, (2006) 202 ELT 795. In the said case it has been held by the Tribunal that the fact that claims made before the Government companies that it was the manufacturer or that it had given warranty or affixed brand name stickers cannot be a reason to conclude that the assessee was a manufacturer within the meaning of the Central Excise Act. Department's appeal in respect of the said decision of the Tribunal was dismissed on the ground of delay as also on merit as reported in (2010) 254 ELT A37. We find that the ratio of the said decision is squarely applicable to the facts and circumstances of the present case. 6.3. Further, we find that on the very same issue, first show cause notice dated December 24, 2010 was issued by the Additional Director General of the Directorate General of Central Excise Intelligence in respect of the period December 2005 to March 2010. The said Notice was adjudicated by the Commissioner vide order dated February 29, 2012, wherein duty demanded from the assessee was confirmed. On appeal, this Tribunal has held that the Appellant did not have the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2, It had been held that upon investigation by the revenue authorities, manufacturing facility had been found at the Belilious Road premises, which had also been admitted by the noticee no. 2 in his statement dated 21.05.2010 and that no contrary evidence could be adduced by the noticees. Such findings had clearly been rendered in disregard of the inventory dated 08.02.2010 drawn up by the Central Excise officers, which established the point of lack of manufacturing facilities. The appellant firm's defence was further supported by the Chartered Engineer's Certificate filed in the subsequent stages. 10. Further, it is noticeable that between the year 2007, when Investigations had been Initiated and the year of 2010, when Investigation was resumed, no additional evidence was brought on record by the revenue in order to counter the appellant firm's contentions. Likewise, the revenue could not adduce any positive evidence of clandestine manufacture by the appellant firm or incriminating evidence showing procurement of unaccounted raw materials/ seml-processed goods for purpose of further manufacturing/ job work, for example, discovery of undisclosed manufacturing f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... contravention of the Central Excise law are unsustainable due to the following reasons - I. Only physical verification of the items used to be carried out at the Belilious Road premises/ godown premises and other tests were conducted in the approved laboratories of third parties like M/s. Analyst, Benaras Road, Howrah, M/s. S. B. Steels, Liluah, Howrah. The said positions had been clarified in answer to question no. 13 of statement dated 25.01.2010 given by Shri Dinesh Rungta, as appears at page no. 63-64 of the Paper Book relating to Ex. Appeal No. 392 of 2012. None of the test reports relied on by the appellant firm had challenged by the revenue. II. The appellant firm did not have any trademark or brand name and in some cases, marks like "S", "SA" etc. had been embossed on the goods supplied to the various power supply corporations solely for identification purpose. In reply to question nos. 3-5 of his statement dated 01.12.2010, Shri Dinesh Rungta had categorically explained why the aforesaid marks/symbols could not be treated as any 'trademark', notwithstanding that the same had been declared as trademarks in the Guaranteed Technical and Other Partic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mation such as supplier's details, description of goods, payment of central sales tax, vehicle number for transportation of goods etc., which the adjudicating authorities neglected to examine. Thus, we cannot uphold the finding at page no. 21 of the impugned Order-in-Original dated 22.09.2017 to the effect that the appellant firm "....could not produce any document which settles the fact they have trading sales...". Similarly, the finding in the Impugned Order-in-Original dated 01.05.2018 that transmission line hardware's were manufactured after the appellant firm received purchase orders from her customers is also Incorrect. B. Duty paid on purchases We find that the appellant firm had already paid central excise duty in respect of a substantial part of its purchases. That the appellant firm had provided all the necessary details in this behalf, is evident from the written submissions filed before the Commissioner of Central Excise, Kolkata-II Commissionerate, as appears at page nos. 15549 to 15550 in Part 38 of the combined Paper Book filed before this Tribunal. To such extent of duty paid purchases, it follows that no demand of Central Excise duty can survi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns that the basis and computation of demand in the subsequent show cause notices were contrary to those of the earlier two show cause notices dated 24.12.2010 and 24.03.2011. While passing the Order-In-Original dated 01.05.2018 the Commissioner ought to have appreciated that, whether the private parties to whom the appellant firm had supplied the goods In question further supplied the goods to electricity distribution companies was of no consequence for determining the appellant firm's liability. We also find that, qua such supplies of wires, channels, angles etc. as well as supplies to private parties, there is no evidence at all that the appellant firm had undertaken manufacturing activities. F. Non-existence of alleged four suppliers: As regards the Issue of non-existence or untrace ability of the four disputed suppliers, namely, M/s. B.K. Enterprises, M/s. Shiv Shakti Trade Centre, M/s. Hari Om Enterprises and M/s. Evergreen Enterprises, we observe that the appellant firm had provided sufficient clarifications in their reply to the show cause notice dated 21.02.2014 as well as in their written submission filed before the Commissioner of Central Excise, Kolkata-II C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts like agreement with suppliers, consignment notes, transporters' bill and their payment details, loading/unloading slips, weighment slips etc. To take an example, the Commissioner had held that the appellant firm could not establish physical movement of the goods purchased from SubhLabh Enterprises to Vishwanath Projects Ltd. which was incorrect. During the course of hearing before us, it was demonstrated as to how the said purchased goods had been transported to the premises of Vishwanath Project Ltd. by truck bearing no. AP-16TX/9879. Further and in any event, such Issues were alien to the show cause notices and had been raised for the first time in the Order-In-Original dated 22.09.2017, which is illegal and unacceptable. 14. Regarding penalty, the Appellant contended that the Notice demanding duty for the period 2005 to 2009-10 was issued on 24.12.2010. Since they have not suppressed any information from the department, Notice cannot be issued by invoking extended period. We observe that the Appellant has not taken any Central Excise Registration on the ground that the activities undertaken by them did not amount to manufacture. The Investigation concluded that ....