Ram Techno Pack vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. PIII/222 to 224/2004 dated 2.12.2004 passed by Commissioner of Central Excise (Appeals), Pune-III)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. Ramesh Nair, Member (Judicial)

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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 :

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?

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Ram Techno Pack Appellant Vs. Commissioner of Central Excise, Pune-III Respondent

Appearance: Mrs. Aparna Rao, Advocate, for appellant Shri V.K. Agarwal, Additional Commissioner (AR), for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of Hearing: 14.1.2015 Date of Decision: 14.1.2015

ORDER NO

Per: P.K. Jain

Brief facts of the case are that the appellants were engaged in the manufacture of excisable goods falling under Chapter Heading 4822.00 of the Central Excise Tariff Act, 1985. It was also found that in addition to manufacturing on their on, they were also doing job work on behalf of one M/s. D.S. Enterprises. The appellants were converting the paper sent by M/s. D.S. Enterprises into paper reels, cores and tubes. No duty was being paid by the appellants as it was assumed that the said activity is covered under Notification 214/86. In the impugned order, the first appellate authority found that the appellants were not eligible for the benefit of Notification 214/86 as the supplier of the goods was not paying any duty. However, it was considered that if the appellants had followed the correct procedure, they would be entitled to the modvat credit on the inputs and, therefore, their net duty liability would come down. He set aside the penalty under Section 11AC. The appellants are in appeal against the said order.

2. Heard both sides.

3. The main contention of the learned counsel for the appellants was that though they agree that the appellants were not entitled to the benefit of Notification 214/86 but they were entitled to the benefit of Notifications 83/94-CE and 84/94-CE both dated 11.4.1994 and if they had claimed the benefit of the said Notifications, there would be no duty liability. It was also contended that this is a point of law and can be raised at any point.

3.1 Another contention of the learned counsel was that since the Commissioner (Appeals) has set aside the penalty under Section 11AC, extended period of limitation cannot be invoked and on this ground also, the demand has to be dropped.

4. The learned ARs main contention was that the benefit under the two said Notifications was not claimed by them either before the original authority or before the first appellate authority and they cannot claim such a benefit for the first time before the Tribunal.

5. We have considered the rival submissions. We note that the appellants have claimed the benefit of Notifications 83/94 and 84/94 for the first time before the Tribunal and obviously the same has not been examined by the original authority or by the first appellate authority. It also appears to us that the supplier of the goods, M/s. D.S. Enterprises, is a trading unit and not a manufacturing unit and the conditions stipulated under Notifications 83/94 and 84/94 are of a nature which can be satisfied by a manufacturer. Since the plea for the benefit of the two notifications has been raised for the first time, it would be proper to remand the matter to the original authority to examine whether the appellants would be really eligible to get the benefit of Notifications 83/94 or 84/94.

6. Learned counsel for the appellant has also raised the issue of extended period. We find that the Commissioner (Appeals) has set aside the penalty imposed under Section 11AC of the Central Excise Act on the grounds that the appellants could have been eligible for modvat credit and, therefore, the duty liability would come down. In our view, for deciding whether or not penalty is imposable under Section 11AC, what is required to be done is whether the ingredients of Section 11AC are satisfied or not. This has not been done by the Commissioner (Appeals). However, we find that the Revenue has not filed appeal against the said order and, therefore, the issue raised against the penalty is not before us. Therefore, we are not issuing any direction on that. However, as far as extended period of limitation is concerned, in our view, the proviso to Section 11AC again prescribes certain ingredients and if those ingredients are satisfied, extended period of limitation would be invokable. Since we are remanding the matter for examination of the benefit of the two Notifications now claimed, original authority may also examine the plea of extended period of limitation without getting influenced by any of the observations of the Commissioner (Appeals) in the impugned order.

7. The appeal is thus allowed by way of remand keeping all issues open.

(Operative port pronounced in Court)

(Ramesh Nair) Member (Judicial) (P.K. Jain) Member (Technical)

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