M/S. Maruti Udyog Ltd vs C.C.E. Delhi-Iii

[Arising out of Order-in-Appeal No. 01/PP/CE/2007 dated 21.02.2007 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Gurgaon].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

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 should 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 Departmental authorities?

M/s. Maruti Udyog Ltd. .Appellants

Vs.

C.C.E. Delhi-III .Respondent

.

Appearance:

Shri B.L. Narsimhan, Advocate for the Appellant

Shri Govind Dixit, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 30.07.2015

FINAL ORDER NO. 52430/2015-EX(DB)

Per Ashok Jindal:

The appellant has challenged the impugned order confirming a demand of duty of Rs.73,07,806/- along with interest and equivalent amount of penalty for the period March 2003  March 2005.

2. The facts of the case are that appellant is a manufacturer of motor vehicle and parts thereof. To manufacture the said finished goods the appellant is procuring sheet metal parts and availing Cenvat Credit on the input used in manufacture of motor vehicle and parts thereof. The appellant removed part of sheet metal parts so received without using in manufacture of motor vehicle that to after subjecting sheets to electro deposition and coating. Parts of sheet metal parts the appellant is reversing the Cenvat Credit availed on these sheets on the ground that inputs have been cleared as such. In these set of facts, a show cause notice was issued to the appellant to demand duty for the activity of electro deposition coating for these sheets which have been cleared by the appellant without using in manufacture of their final product on the premise that the activity of electro deposition and coating is an activity of the manufacture as per section 2(f) of the Central Excise Act 1944. Adjudication took place. Demand of duty along with interest as proposed in the show cause notice were confirmed. Penalty equivalent to the duty was also imposed. Aggrieved from the said order, the appellant is before me.

3. The Ld. Counsel for the appellant submits that the issue whether electro deposition coating is an activity amounts to manufacture as per section 2(f) of the Central Excise Act 1944 has come before this Tribunal for consideration and this Tribunal in their own case reported in 2003 (153) ELT 78 (Tri-Del) holding that appellant is liable to pay duty on the instrinct value of the coating of the said sheets for removed inputs after subjecting them to the process of electro deposition coating, mere reversal of Modvat Credit availed in respect of those input on being payment of appropriate amount of duty. Therefore, appellant is required to discharge the duty instrinct value of the goods. Relying on the said decision of this Tribunal the Adjudicating Authority confirmed the demand against the appellant. He further submits that in fact, the order of this Tribunal was challenged by the appellant before the Honble Apex Court and the Honble Apex Court in the said case reported in 2015 (318) ELT 353 (SC) wherein appeal of the appellant was allowed holding that the reversal made by the appellant is correct.

4. On the other hand Ld. AR supported the impugned order.

5. Heard the parties. Considered the submission.

6. As in appellants own case for the earlier period the matter travelled upto the Honble Apex Court wherein the Honble Apex Court observed as under:

We have heard ld. Counsel for the parties. In our view, on the true construction of Rule 57F(1), it would be clear that the input that is removed from the factory for home consumption is bumpers, grills, etc. being spare parts of motor vehicles procured by the appellant before us. According to us, ED Coating which would increase the shelf life of the spare parts and provide anti-rust treatment to the same would not convert these bumpers, etc., into a new commodity known to the market as such merely on account of value addition.

7. It was also observed that Bumpers and grills are more certainly of commercial use in themselves whether the process of electro deposotion coating applied or not. As the issue has been settled by the Honble Apex Court that if input after elctro deposition coating has been cleared by reversing Cenvat Credit as such in that case appellant is not required to pay any duty thereon, and the reversal of Cenvat Credit is sufficient. In these terms, we hold that the reversal made by the appellant at the time of clearing these inputs as such is sufficient. Therefore, demand as per the impugned order are not sustainable.

8. With these observations, impugned order is set aside. Appeal is allowed with consequential relief, if any.

0

(Dictated and pronounced in the open court)

(B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

2

E/1092/2007-EX(DB)