Ludhiana vs M/S Swaraj Foundry Division

[Arising out of OIO No.07/Ldh/05, dt.21.02.2005, passed by Commissioner of Central Excise & Customs, Ludhiana)

Commissioner, Central Excise & Service Tax,

Ludhiana Appellant

Vs

M/s Swaraj Foundry Division Respondent

Represented by:

For Appellant: Shri Yashpal Sharma, Authorised Representative

For Assessee: Shri B.L. Narsimhan, Advocate

For approval and signature:

Mr. P.K. Das, Honble Member (Judicial)

Mr. P.S. Pruthi, Honble Member (Technical)

1. Whether Press Reporters may be allowed to see the No

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 of Seen

the order?

4. Whether order is to be circulated to the Departmental Yes

authorities?

CORAM:

MR. P.K. DAS, HONBLE MEMBER (JUDICIAL)

MR. P.S. PRUTHI, HONBLE MEMBER (TECHNICAL)

Date of Hearing/Decision:23.01.2015

Final Order No.51101/2015

Per: P.K. Das

1. Revenue filed this appeal against the order of Commissioner as the demand of duty was dropped for the extended period of limitation.

2. After hearing both the sides and on perusal of the records, we reproduce below the relevant portion of the findings of the Adjudicating authority:-

4.6.5 One of the contentions of the Noticee regarding invocation of extended period of limitation is that they had filed declaration (Marketing pattern) under Rule 173C of the erstwhile Central Excise Rules 1944 in which they had declared that they were selling goods to other units of the company as well as to other companies and thus the fact of clearance of castings to SCD and STD was in complete knowledge of the Department at all points of time.

4.6.6 I have perused declarations filed by the Noticee for the period 1997-98, 1998-99, 1999-2000 and 2000-01 under the provisions of Rule 173C (3A) of the erstwhile Central Excise Rules 1944 and find that though the Noticee, against the Heading Marketing pattern had mentioned that they were clearing the goods at factory gate and under the Heading Marketing Agencies they had mentioned that the sale was Direct to industrial consumers, yet I further find that under the Head Pricing Pattern and against the heading for sale to Industrial Consumers the Noticee has declared as under:-

Goods are sold to other units of the company as well as to other company at the uniform prices. No variation of prices between the contracted prices and the normal prices

From the above declaration made by the Noticee for the respective period, it is clear that the Noticee had declared to the Department that they would be selling the goods to other units of the company. Selling/clearance of goods to own units of the Noticee does not involve sale. When the Noticee has made the above said declaration, the Department was at liberty to ask the party to file price declaration, if not already filed and to make further enquiry with regard to the valuation of the goods cleared/sold to other units (division) of the Noticee company. The show cause notice does not state as to whether any such enquiry was made by the Department.

3. In this case, there is a transfer of the goods of the same company. Larger Bench decision of the Tribunal in the case of Jay Yuhshin Ltd Vs CCE New Delhi  2000 (119) ELT 718 (Tri-LB) held that in such situation, it is a case of revenue neutrality. Honble Gujarat High Court in the case of CCE Surat II Vs Gujarat Glass Pvt. Ltd.  2013 (290) ELT 538 (Guj.) dismissed the appeal filed by the Revenue on identical issue. It has been observed by Honble Gujarat High Court that the conduct of the assessee was honest and they cannot be ascribed with intention to evade the duty and the extended period of limitation was not invokable.

4. In view of the above discussion, we not find any reason to interfere the order of the Adjudicating authority. Accordingly, the appeal filed by the Revenue is rejected.

(Dictated & Pronounced in Court)

(P.S. Pruthi) (P.K. Das)

Member (Technical) Member (Judicial)

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