M/S Indian Oil Corporation Ltd vs Cce, Rohtak

[Arising out of the Order-in-Original No. 14/Comm/RP/2005 dated 31/10/2005 passed by The Commissioner of Central Excise, Rohtak.]

For Approval and signature :

Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

M/s Indian Oil Corporation Ltd. Appellant

Versus

CCE, Rohtak Respondent

Appearance

Ms. Tuhina Sinha, Advocate  for the Appellant.

Shri M.S. Negi, Authorized Representative (DR)  for the Respondent.

CORAM : Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

Final Order No. 50866/2015 Dated : 18/03/2015

Per. Rakesh Kumar :-

The appellant, a company engaged in manufacture of petroleum products by refining of crude oil and also in marketing of the petroleum products, had got the storage tanks for use in their retail outlets; manufactured on job work basis through certain contractors. The fabrication of the tanks was done by the contractors at their own premises out of the raw material and specification supplied by the appellant. After fabrication, the tanks were supplied to the appellant companys retail outlets where the same were installed. The Department was of the view that it is the appellant who is to be treated as manufacturer of the tanks and accordingly on this basis, the Commissioner vide order-in-original dated 31/10/05 confirmed the Central Excise duty demand of Rs. 67,20,579/- against the appellant company alongwith interest on it under Section 11AB and imposed penalty of equal amount on them under Section 11AC. Against this order of the Commissioner, this appeal has been filed.

2. Heard both the sides.

3. Ms. Tuhina Sinha, Advocate, the learned Counsel for the appellant, pleaded that the issue involved in this case stands squarely covered in favour of the appellant by the Tribunals final order dated 22/03/10 in the appellants own case reported in 2010 (253) E.L.T. 234 (Tri.  Del.), wherein the Tribunal held that when Indian Oil Corporation got the storage tanks and other steel structures fabricated through job workers out of the raw material supplied by them, it is the contractors/who have to be treated as manufacturer and duty cannot be demanded from Indian Oil Corporation. She, accordingly, pleaded that the ratio of this judgment of the Tribunal is squarely application to the facts of this case, as in this case the fabrication of storage tanks through job workers had been done against similar contracts. She, therefore, pleaded that the impugned order is not correct.

4. Shri M.S. Negi, the learned DR, defended the impugned order by reiterating the findings of the Commissioner in the impugned order.

5. We have considered the submissions from both the sides and perused the records.

6. The appellant entered into contracts with certain contractors for fabrication of tanks to be used in their retail outlets and accordingly, the job workers fabricated the tanks in their own premises out of the raw material supplied by the appellant and as per their specification. On going through the contracts, we are of the view that the contracts between the appellant company and the job workers is on principal to principal basis and the contractors could not be said to be the hired labour. In view of this, we hold that the judgment of the Tribunal in the appellants own case reported in 2010 (253) E.L.T. 324 (Tri.  Del.) would be applicable and as such the impugned order is not sustainable. The impugned order is, therefore, set aside. The appeal is allowed.

(Dictated and pronounced in open court.)

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member (Judicial)

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