(Arising Out Of Order-In-Appeal ... vs Commissioner Of Central Excise, Salem

(Arising out of Order-in-Appeal Nos.4 to 13/2009-CE (SLM) dated 13.1.2009 passed by the Commissioner of Central Excise (Appeals), Salem)

E/S/41228 to 41240/2014 and E/Misc./40053 to 40065/2015 in E/40978 to 40990/2014 M/s. Tamilnadu Electricity Board

(Arising out of Order-in-Appeal Nos.63 to 75/2014-CE (SLM) dated 7.2.2014 passed by the Commissioner of Central Excise (Appeals), Salem

E/41368 & 41369/2013 M/s. Tamilnadu Generation and Distribution Corporation Ltd. (TANGEDCO)

(Arising out of Order-in-Appeal Nos.22 & 23/2013-SLM-CEX dated 21.3.2013 passed by the Commissioner of Central Excise (Appeals), Salem)

E/1229/2004 M/s. The Superintending Engineer, Tamilnadu Electricity Board

(Arising out of Order-in-Appeal No.296/2004-CE (SLM) dated 29.6.2004 passed by the Commissioner of Central Excise (Appeals), Salem)

Appellants Vs.

Commissioner of Central Excise, Salem Respondents

Appearance

Shri P.C. Anand, FCA, Consultant for Appellants Shri K.P. Muralidharan, AC (AR) for Respondent

CORAM

Honble Shri D.N. Panda, Judicial Member Honble Shri R. Periasami, Technical Member

Date of Hearing and Decision: 26.02.2015

Final Order Nos.40374-40399/2015

Per D.N. Panda

E/197 to 206/2009

This batch of 10 (ten) appeals relating to different periods appearing in column 1 of Table A depicted below arose against different orders passed by learned Commissioner (Appeals) vide Nos.04/2009-CE (SLM) to 13/2009-CE (SLM), on 13.01.2009 appearing in column  5 of the said Table relating to the periods mentioned in column  1 thereof denying refund sanctioned to the appellant by the learned Adjudicating Authority, Salem in terms of his different orders appearing in column 2 of the said table. The refunds so sanctioned were subject to review by Revenue in terms of different orders as appearing in column 4 of the Table - A following such review orders, Revenue filed appeals before Commissioner (Appeals). 2. While hearing this batch of appeals, Tribunal by a common Stay Order No.375 - 384/2009 dated 14.05.2009 as appearing in column 6 of Table A stayed operation of the impugned order.

TABLE A Period O / O No.&Date Sanctioning refund Refund given to TNEB (Rs.) Commissioner Review Order No & Date O / A No. & Date Commissioner (Appeals) upholding Dept appeal CESTAT Stay No. / Appeal No. CESTAT Stay Order No. & Date 1 2 3 4 5 6 7 11.10.1993 to 31.3.1994 24/08-RF dt.28.3.08 14,48,150/- C.No.IV/02/223/08-Review dt.25.4.08 04/2009-CE(SLM) dt.13.1.2009 E/S/130/09 in E/197/09 375/09 dt.14.5.09 1.4.1994 to 31.3.1995 25/08-RF dt.8.5.08 26,04,659/- C.No.IV/02/224/08-Review dt.8.5.08 05/2009-CE(SLM) dt.13.1.2009 E/S/131/09 in E/198/09 376/09 dt.14.5.09 1.4.1995 to 31.3.1996 39/08-RF dt.22.4.08 24,91,764/- C.No.IV/02/278/08-Review dt.28.5.08 06/2009-CE(SLM) dt.13.1.2009 E/S/132/09 in E/199/09 377/09 dt.14.5.09 1.4.1996 to 31.3.1997 40/08-RF dt.22.4.08 45,73,317/- C.No.IV/02/278/08-Review dt.28.5.08 07/2009-CE(SLM) dt.13.1.2009 E/S/133/09 in E/200/09 378/09 dt.14.5.09 1.4.1997 to 31.3.1998 41/08-RF dt.22.4.08 45,82,083/- C.No.IV/02/278/08-Review dt.28.5.08 08/2009-CE(SLM) dt.13.1.2009 E/S/134/09 in E/201/09 379/09 dt.14.5.09 1.4.1998 to 31.3.1999 ** 42/98-RF dt.22.4.08 68,58,868/- C.No.IV/02/278/08-Review dt.28.5.08 09/2009-CE(SLM) dt.13.1.2009 E/S/135/09 in E/202/09 380/09 dt.14.5.09 1.4.1999 to 30.9.1999 43/98-RF dt.22.4.08 28,62,905/- C.No.IV/02/278/08-Review dt.28.5.08 10/2009-CE(SLM) dt.13.1.2009 E/S/136/09 in E/203/09 381/09 dt.14.5.09 1.10.1999 to 31.3.2000 ** 44/98-RF dt.22.4.08 51,64,705/- C.No.IV/02/278/08-Review dt.28.5.08 11/2009-CE(SLM) dt.13.1.2009 E/S/137/09 in E/204/09 382/09 dt.14.5.09 1.4.2000 to 30.9.2000 45/08-RF dt.22.4.08 47,89,780/- C.No.IV/02/278/08-Review dt.28.5.08 12/2009-CE(SLM) dt.13.1.2009 E/S/138/09 in E/205/09 383/09 dt.14.5.09 1.10.2000 to 31.1.2001 46/08-RF dt.22.4.08 21,85,655/- C.No.IV/02/278/08-Review dt.28.5.08 13/2009-CE(SLM) dt.13.1.2009 E/S/139/09 in E/206/09 384/09 dt.14.5.09 Total

3,75,61,886/-

E/40978 to 40990/2014 3. This batch of 13 (thirteen) appeals arose for the self same period as appearing in column 5 of Table A above in two instalments against 13 orders-in-appeals as depicted in column 5 of Table  B below giving rise to demands of different amounts which were refunded to the appellant as appearing in column 3 of Table - A above. The appeals before Commissioner (Appeals) came up when adjudicating authority issuing different show-cause notices dated 24.11.2008 depicted in column 2 of Table  B for the respective periods levied duty demand of different amounts as appearing in column 3 of Table  B on self same issue which granted refund of different amounts appearing in column 3 of the Table A aforesaid to the appellant. The demands so arose in adjudication were vide different order numbers and date as appearing in column 3 of Table B below. TABLE  B Period Protective SCN No. & Date Demand (Rs.) Impugned O / O No. & Date Confirmed by Impugned O / A No. & Date 1 2 3 4 5 11.10.1993 to 31.3.1994 70/08(ADC) dt.24.11.08 14,48,150/- 04/2009-CE(SLM) dt.11.3.2009 63/2014-CE dt.7.2.2014 1.4.1994 to 31.3.1995 71/08(ADC) dt.24.11.08 26,04,659/- 05/2009-CE(SLM) dt.11.3.2009 64/2014-CE dt.7.2.2014 1.4.1995 to 31.3.1996 72/08(ADC) dt.24.11.08 24,91,764/- 06/2009-CE(SLM) dt.11.3.2009 65/2014-CE dt.7.2.2014 1.4.1996 to 31.3.1997 73/08(ADC) dt.24.11.08 45,73,317/- 07/2009-CE(SLM) dt.11.3.2009 66/2014-CE dt.7.2.2014 1.4.1997 to 31.3.1998 74/08(ADC) dt.24.11.08 45,82,083/- 08/2009-CE(SLM) dt.11.3.2009 67/2014-CE dt.7.2.2014 1.4.1998 to 31.3.1999 **

**

**

1.4.1999 to 30.9.1999 75/08(ADC) dt.24.11.08 28,62,905/-

10/2009-CE(SLM) dt.11.3.2009 68/2014-CE dt.7.2.2014 1.10.1999 to 31.3.2000 **

**

**

1.4.2000 to 30.9.2000 76/08(ADC) dt.24.11.08 47,89,780/-

09/2009-CE(SLM) dt.11.3.2009 69/2014-CE dt.7.2.2014 1.10.2000 to 31.1.2001 77/08(ADC) dt.24.11.08 21,85,655/-

11/2009-CE(SLM) dt.11.3.2009 70/2014-CE dt.7.2.2014 TOTAL (A) 2,55,38,313/-

ADDITIONAL DEMAND RAISED Period Demand (Rs.) Impugned O / O No. & Date Confirmed by Impugned O / A No. & Date 1 2 3 4 1.4.1997 to 31.3.1998 4,46,549/-

02/2010 dt.21.1.10 71/2014-CE dt.7.2.2014 1.4.1996 to 31.3.1997 1,82,504/-

05/2010 dt.21.1.10 72/2014-CE dt.7.2.2014 1.4.1998 to 31.3.1999 2,63,232/-

03/2010 dt.21.1.10 73/2014-CE dt.7.2.2014 1.4.1994 to 31.3.1995 3,50,000/-

04/2010 dt.21.1.10 74/2014-CE dt.7.2.2014 1.10.1999 to 31.3.2000 33,103/-

01/2010 dt.21.1.10 75/2014-CE dt.7.2.2014 TOTAL (B) 12,75,388/-

Gross Total (A) + (B) 2,68,13,701/-

4.1 When the stay applications filed by the appellant in appeal nos. registered as E/40978 to 40990/2014 came before the Bench today, it was mentioned on behalf of the appellant that the cause of action involved in both the batch of appeals being one and the same, all such appeals may be heard analogous and disposed by a common order. Revenue agreed to the proposal for such common disposal.

4.2 Heard both sides and perused the record.

5.1 The background of the case demonstrates that the appellant M/s. Tamil Nadu Electricity Board (TNEB, in short) has been dragged to litigation by Revenue repetitively as is described herein after. Relying on the decision of the Tribunal in Appeal No. 2721/84/B disposed vide Order No. E/Misc./866/90/91 on 07.09.1993 in respect of its Vellore Unit holding that the process like cutting, drilling would not amount to manufacture the Mettur Unit of the appellant made refund applications of different amounts with subsequent revision thereof for different periods as appearing in column 1 of Table A aforesaid on 12.05.1995 on the ground that duty paid under protest was refundable to it since there arose no liability to duty with effect from 01.09.1994. Such prayer was allowed and refunds as appearing in column 3 of Table  A were sanctioned by the Adjudicating Authority in terms of different refund sanctioning orders all dated 22.4.2008 as appearing in column 2 of that Table. To do so, that authority relied on the decision of Tribunal reported in 2001 (131) E.L.T.510 (T) holding that the abovesaid nature of the activity carried out by the appellant does not amount to manufacture and there shall not be classification of goods under Tariff Heading 7308.90. He also relied on the decision of the Tribunal in TANSI Engineering Works Vs Commissioner reported in 1996 (88) E.L.T.407 (Tri.) holding that the appellant is not liable to duty as has been held by Tribunal in the own case of the appellant, in Appeal No.E/1461 & 1462/1996 disposed on 05.01.2001.

5.2 Revenue being aggrieved by the above refund orders all dated 22.4.2008 went in appeal before the Commissioner (Appeals). Such appeals were registered as Appeal Nos. 4 to 13/2009-CE (SLM) in the file of the said Authority. One such appeal was disposed by that authority by his Order No.04/09-CE [SLM] on 13.01.2009 reversing the decision of grant of refund to the appellant and such decision was followed in disposing rest of the appeals.

5.3 Being aggrieved by all the orders dated 13.1.2009 passed by the learned Commissioner (Appeals) who reversed refunds sanctioned by Adjudicating Authority, appellants came before Tribunal in the batch of appeals registered as E/197/2009 to E/206/2009 (at Sl. No. 15 to 24 of the cause list today). Appreciating the ratio laid down in the own cases of appellant as hereinbefore stated, Tribunal, stayed operation of the order of learned Commissioner (Appeals) on 14.05.2009.

6. We were given to understand that not only the appellant TNEB succeeded before Tribunal as early as in 1993 in terms of its order dated 07.09.1993, 05.01.2001 and the decision reported in reported decision 2000 (124) ELT 638, as well as 2001 (31) E.L.T. 510 [Order dated 05.01.2001 in the case of Commissioner Vs Superintendent Engineer, TNEB], it also succeeded before Apex Court when Revenue carried the self same issue to the apex Court in various Civil Appeal Nos.4999-5000/2001. Those were dismissed by Apex Court order dated 29.8.2006 reported as 2006 (203) ELT A82 (SC). While dismissing, the Honble Court passed the following order:-

The Revenue being aggrieved against the order of remand passed by the Commissioner filed an appeal before the Tribunal which has been dismissed by the impugned order.

The point in issue is concluded against the Revenue by a judgment of this Court in Collector of Central Excise Vs Dodsal Manufacturing (P) Ltd. [2001 (127) E.L.T.324]. In the said case also this Court had remanded the case to the Authority-in-Original.

The appeals are dismissed in view of the judgment in Dodsal Manufacturing (P) Ltd. (supra). No costs.

7. While Revenue failed sequentially as above, on the same set of facts made further attempt to litigate by a mere change of opinion issuing show-cause notices numbered as 70/08 to 77/08 dated 24.11.2008 (copy of which is available in the appeal record of E/206/2009) and held against appellant. Appellant being unsuccessful before learned Commissioner (Appeals) who upheld orders of adjudication as depicted in column 4 of Table  B by his orders depicted in column 5 thereof came in appeal before Tribunal in the batch of appeals registered as Appeal Nos. E/40978 to 40990/2014.

7.1 In the course of hearing, on behalf of appellant it was submitted that the real activity carried out by the appellant was cutting the angles and channels of different size into small pieces and punching holes therein in its centralized workshop which were sent to the respective Divisions for embedding the same to earth to house the transformers or transmission towers. There was clearance of angles and channels only by appellant but not structurals at all. The structural come into being as a structure when the goods cleared by appellant were embedded to earth and not severable and became immovable property. Such material fact was appreciated by Tribunal in various judgments aforesaid in the own case of appellant and such activity remained unchanged even in the proceedings under appeal in the present batch of appeals before Tribunal.

7.2 Revenue supported orders of Authority below.

8. In the 2 (two) Appeals registered as Nos. E/41368 & 41369/2013 before Tribunal, the issue involved is whether the activity of the nature carried out by the appellant as stated hereinbefore amounts to manufacture and the goods shall come under the Tariff Entry No. 7308 2011. Added to this, there is another issue involved relating to admissibility of CENVAT credit.

9. The appeal No. E/1229/2004 raises the issue whether scrap sold by appellant is liable to duty?

10. Revenue submits today that Supreme Court dismissed appeal of Revenue on the ground that there was a decision of the apex court against Revenue in Dodsal Manufacturing (P) Ltd.  2001 (127) ELT 324 (SC). But Apex Court in another case of Collector of Central Excise, Jaipur Vs. Man Structurals Ltd.  2001 (130) ELT 401 (SC), recorded that decision in Dodsal Manufacturing requires reconsideration by a larger bench. It may be stated that when the Order dated 29.08.2006 in Dodsals case 2001 (127) ELT 324 (SC) was within the knowledge of the department while order of dismissal of their appeals was passed by Apex Court in Civil Appeal No.4999-5000/2001 on 29.8.2006, Revenue did not make any mention before the Honble court that its appeals may also be tagged with the matter in Collector of Central Excise, Jaipur Vs Man Structurals Ltd. reported in 2001 (130) E.L.T.401 (S.C.) referred to larger bench. In absence of any mention by Revenue, the judgment dated 29.8.2006 of the Honble Supreme Court in Civil Appeal No.4999-5000/2001 reached to finality. This can be said following the ratio laid down by apex court in Kunhayahmmed Vs State of Kerala reported in 2001 (129) E.L.T.11 (S.C.) explaining the doctrine of merger. Accordingly, in view of the ratio laid down therein, Revenue has no scope further to agitate the self same issue against the appellant on self same fact contrary to the doctrine of res judicata. Therefore, it can unambiguously be stated that the activity carried out by the appellant does not amount to manufacture and goods coming out of the activity carried out by it is not classifiable under Heading 7308 2011.

11. In view of discussions, law and fact as above and following the judgment of apex court in the own case of the appellant as well as decisions of Tribunal, rule of consistency and judicial discipline, the appellant succeed in all the appeals in both the batches aforesaid listed before us today.

12. Stay applications and miscellaneous applications in the batch of appeals registered as appeal Nos. E/40978/2014 to E/40990/2014 before Tribunal stand disposed.

Appeal Nos. E/41368 & 41369/2013

13. It is brought to our notice today that the appellants CENVAT credit claim is in question in Appeal No. E/41368/2013 and E/41369/2013. As has been held above that the activity carried out by the appellants does not amount to manufacture, it is not entitled to CENVAT credit on the inputs used in such activity. Learned consultant for the appellant says that because of the repeated litigation by Revenue, the appellant was paying duty under protest and availing CENVAT credit to safeguard interest of the State owned PSU. It is hereby ordered that CENVAT credit shall only be admissible on inputs used in any other activity resulting in duty liability other than the impugned activity. There shall not be levy of interest or penalty for no levy of duty ordered by this order. Reversal of input credit if any required under law be made within a month of receipt of this order and learned Adjudicating Authority informed as to the same within two weeks thereof.

14. Learned consultant for the appellant says that pre-deposit was made in respect of appeal Nos. E/41368/2013 and E/41369/2013 which may be refunded. Prayer is entertained. The refund shall be made in accordance with law subject to verification of the deposit particulars.

15. Appeal is allowed to the extent indicated above.

E/10229/2004

16. The only issue in dispute in this appeal is whether scrap sold by appellant shall be liable to duty. We may say that scrap not being manufactured by the appellant that is not liable to duty. This appeal is also allowed accordingly.

(Dictated and pronounced in open court)

(R. PERIASAMI) (D.N. Panda) Technical Member Judicial Member ksr 3

2