M/S Bhagwati Autocast Ltd vs Commissioner, Central Excise & Service ...

Appeal No.E/1181,1182/2007-DB [Arising out of OIA No.80 & 81/2007(Ahd-II)CE/Raju/Commr(A), dt.17.07.2007, passed by Commissioner (Appeals), Central Excise & Service Tax, Ahmedabad]

M/s Bhagwati Autocast Ltd Appellant

Vs

Commissioner, Central Excise & Service Tax, Ahmedabad-II Respondent

Represented by:

For Appellant: Shri Kuntal Parikh, Advocate For Respondent: Shri Alok Srivastava, Authorised Representative

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial) Honble Mr. P.M. Saleem, 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:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. P.M. SALEEM, MEMBER (TECHNICAL)

Date of Hearing/Decision:30.07.2015

Order No.A/11141-11142/2015, 30.07.2015

Per: P.K. Das

These appeals are arising out of common order and therefore, both are taken up together for disposal.

2. The Appellants were engaged in the manufacture of C.I. Castings and S.G.I. Castings, classifiable under Chapter 73 of the Schedule to Central Excise Tariff Act, 1985. They purchased Moulds and Dyes, in accordance with the specific design, drawings and dimensions of the goods as required by buyers. The Appellant collected the cost of the moulds and dyes from their customers and it was not included in the assessable value. Show cause notices dt.18.09.2006 and 26.09.2006 were issued for the period 2004-05 and 2005-06 respectively, demanding duty alongwith interest and to impose penalty.

3. Adjudicating authority confirmed the demand of duty of Rs.2,34,934.00 and Rs.1,86,739.00 alongwith interest and imposed penalties. Commissioner (Appeals) upheld the Adjudication order.

4. After hearing both the sides and on perusal of the records, we find that the main contention of the learned Advocate on behalf of the Appellant is that the extended period of limitation cannot be invoked as Show Cause Notice dt.18.09.2006 is barred by limitation and the show cause notice dt.26.09.2006 is partly barred by limitation. He submits that on the identical issue by show cause notice dt.25.07.2004, demand was raised for the period 2001 to 2004. The Tribunal by Final Order No.A/1244/WZB/AHD/2011, dt.22.06.2011 remanded the matter for quantification of demand of duty. It is submitted that the Department was aware of the fact as evident from the earlier Show Cause Notice dt.25.07.2004 and therefore, the extended period of limitation cannot be invoked. He relied upon the decision of the Honble Supreme Court in case of Nizam Sugar Factory Vs CCE  2006 (197) ELT 465 (SC).

5. On the other hand, the learned Authorised Representative for the Revenue submits that the demand was raised on the basis of balance sheet. It is submitted that the balance sheet was prepared in 2006 and therefore, show cause notice was issued in September 2006. It is further submitted that the Appellant has not supplied the figure to the Department.

6. We are unable to accept the submission of learned Authorised Representative. The Tribunal by Final Order dt.22.06.2011 in respect of first Show Cause Notice dt.25.07.2004, observed that the limitation aspect does not stand dealt with by the lower authorities by taking into account the overall facts and circumstances and the plea of the Appellant that that the figures of demand/data having been picked up by the Revenue from the balance sheet, which is a public document, no malafide can be attributed to the Appellant. In the present case, the Commissioner (Appeals) observed that balance sheet for the year 2004-05 could not have been available on 25.07.2005 which was prepared in October/November after closure of financial year. We do not find any material on record that the Department had initiated any enquiry for getting the figures despite their knowledge of non-inclusion of the value in the finished goods. The Honble Supreme Court in the case of Nizam Sugar Factory (supra) held that all relevant facts were in knowledge of the authorities when first show cause notice was issued. There is no suppression of facts on the part of the assessee and demands and penalties were set aside. We find that in the present case, all the facts are within the knowledge of the Department, when first show cause notice was issued on 25.07.2004. So the demand of duty for extended period of limitation by show cause notice dt.18.09.2006 and 26.09.2006 cannot be sustained. However, the demand of duty for the normal period by Show Cause Notice dt.26.09.2006 is liable to be upheld. But it is required to examine the quantification of demand by the lower authorities as per earlier order dt.22.06.2011 of the Tribunal.

7. In view of the above discussion, we set aside the impugned order in Appeal No.E/1181/2007 and the appeal is allowed with consequential relief. In Appeal No.E/1182/2007, the demand of duty alongwith interest and penalty for the extended period of limitation is set aside. The Adjudicating authority is directed to quantify the demand of duty for the normal period of limitation as per Tribunals order dt.22.06.2011. The appeal No.E/1182/2007 is disposed of in above terms.

(Dictated & Pronounced in Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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