Kadam Dairy Equipment Pvt. Ltd vs Commissioner Of Central Excise

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. I

Appeal No. E/1190/05

(Arising out of Order-in-Appeal No. PII/BKS/521/2004 dated 19.11.2004 passed by Commissioner of Central Excise (Appeals), Pune II)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

================================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

Kadam Dairy Equipment Pvt. Ltd. Appellant Vs.

Commissioner of Central Excise Pune II Respondent

Appearance:

None for appellant Shri N.N. Prabhudesai, Supdt. (AR) for respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing: 15.10.2015 Date of Decision: 15.10.2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against order-in-appeal No. PII/BKS/521/2004 dated 19.11.2004.

2. Despite notices, none appeared for the appellant during the earlier proceedings. On 17.08.2015, the Bench directed the Registry to issue notice through the office of the Commissioner (A.R.) and place on record the acknowledgement from the appellant assessee. We were informed and note that the notice for todays hearing was served on the appellant and an acknowledgement was taken. Since the matter is of 2005, we take up the appeal for disposal despite there being no representation from the appellant.

3. Filtering out the unnecessary details, the brief facts that arise for consideration are the appellant herein are engaged in the manufacturing of Dairy equipments like milk storage tanks, S.S. Tank, Ghee Boiler, cheese can, milk tanker falling under Chapter No. 84 of the schedule to Central Excise Tariff Act. An investigation was carried out by the Anti Evasion Branch and they found that appellant herein, in addition to the products manufactured and cleared for themselves were also undertaking jobwork for one M/s Swojas Energy Foods Pvt. Ltd. (Swojas in short) and did not include the value of clearances made to such Swojas and if such value is included, the claim for the benefit of exemption under Notification dated 28.02.1993, is not applicable. Show-cause notice was issued for demanding duty, interest thereof and for proposing to impose penalty. The adjudicating authority after following due process of law confirmed duty liability of Rs.1,81,899/- with interest and imposed equivalent penalty under Section 11C and further penalty of Rs.10,000/- under Rule 173Q and confiscated land, building, plant and machinery with an option to redeem the same on payment of redemption fine of Rs.45,000/-. On an appeal, the first appellate authority reduced the demand liability to Rs.1,34,880/- and reduced the penalty under Section 11AC to Rs.19,377/- and upheld the order of demand of interest under Section 11AB of Rs.19,377/- and set aside the penalty of Rs.10,000/- and has also set aside the confiscation of plant, building etc.

3.1 Revenue has not filed any appeal against the setting aside the penalties, confiscation and reduction in demand as made by the first appellate authority.

4. On perusal of the Grounds of Appeal filed by the appellant we find that the main contention is on the ground that they were working as a jobworker for Swojas who has filed an undertaking under Notification 84/94-CE to the Asst. Collector of Central Excise and Customs, Pune Division intimating that they are getting the jobwork done from the appellant. The said undertaking is annexed to the memorandum of appeal on page No.66/76 and 68/76.

5. Learned D.R. would draw our attention to the findings recorded by the lower authorities. He would submit both the lower authorities have held that the procedure to be followed under Notification 83/94 and 84/94 are not followed by the appellant as well as Swojas. It is his submission that in the absence of any evidence to show that Swojas had filed a declaration to the authorities having jurisdiction over the appellants factory, it cannot be considered that appellant was doing jobwork for Swojas.

6. We have considered the submissions made by the learned D.R and perused the records.

7. The issue that arises our consideration is that whether the value of the jobwork undertaken by the appellant for Swojas is liable to be included in the value of clearances made by the appellant and deny him the benefit of Notification No.1/93 holding appellant as manufacturer. It is undisputed that appellant is manufacturer of various dairy equipments and claims benefit of small scale exemption No. 1/93 and also undertakes jobwork. It is seen from the records and more specifically the undertaking given by the Swojas to the jurisdictional authorities having jurisdiction over their office that they wished to get the dairy equipments manufactured on jobwork basis from the appellant herein. We specifically find that the said Swojas has informed and requested the Asst. Collector to forward one of the undertakings to the jurisdictional authorities of the appellants factory. Further we find that they had given a clear undertaking that any duty liability that arises on the dairy equipments manufactured as job work by the appellant, will be discharged by Swojas. On such categorical declaration and undertaking given by Swojas no demand is raised on Swojas. We find that the provisions of Notification No.84/94 are clear when read indicates that if any duty liability that arises on the goods manufactured on job work basis under the said Notification, is to be demanded from the supplier of the raw material. In the case in hand, the supplier of the raw material is Swojas and the demand of duty if any, should have been made on them and not on the appellant. The provisions of the said Notification are very clear to that extent and Revenue authorities were in error in demanding the Central Excise duty from the appellant.

7.1 Learned D.R. relied upon various case laws to submit that the procedure as required under Notification 83/94 and 84/94 having not followed, the demand confirmed by the first appellate authority are correct.

7.2 We find that the said case laws may not carry the case of the Revenue any further as it can be seen from the facts reproduced herein above that there is categorical declaration/undertaking by Swojas to discharge the duty liability that may arise in the course of jobwork undertaken by the appellant, on which no action is taken by the revenue.

8. In view of the foregoing, we find that the impugned order is unsustainable. The impugned order is set aside and the appeal is allowed.

(Dictated in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

nsk

??

??

??

??

1 6 Appeal No. E/1190/05