The Indian Hume Pipe Co.Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. 17-2007 dated 10/07/2007 passed by CCE(Appeals), Hyderabad]

For approval and signature:

HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

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?

THE INDIAN HUME PIPE CO.LTD., AZAMABAD INDUSTRIAL AREA, HYDERABAD Appellant(s)

Versus

Commissioner of Central Excise, Customs and Service Tax HYDERABAD-I NULL KENDRIYA SHULK BHAVAN, L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD, - 500004 ANDHRA PRADESH Respondent(s)

Appearance:

None For the Appellant

Shri L. Dendem, Authorised representative For the Respondent

Date of Hearing: 28/05/2015

Date of Decision: 28/05/2015

CORAM:

HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 21435 / 2015

Per : B.S.V. MURTHY

Nobody is present for the appellant. This is the 6th occasion when the matter is coming up for hearing. Therefore the appeal is taken up for decision.

2. Appellant is a manufacturer of PSC / RCC and steel pipes. Appellants supplied 28 BWSC pipes to Public Health and Municipal Engineering Department, Rajamundry without payment of duty by claiming exemption under Notification No.6/2002-CE dt. 01/03/2002. Taking a view that appellant is not eligible for the benefit of this notification since the certificate issued by the District Collector mentioned the name of the plant as the one in Patancheru whereas pipes were cleared by the Hyderabad Unit (appellant). Accordingly proceedings were initiated culminating in confirmation of demand for duty of Rs.25,382/- for the clearances made in June 2005. Penalty of Rs.25,884/- was also imposed.

3. Learned AR would submit that the appellants had deliberately suppressed the fact that exemption had been extended to their Patancheru unit whereas the goods were cleared by Azamabad unit. Therefore the demand for duty as well as imposition of penalty are sustainable.

4. We have considered the submissions. On going through the records and the appeal memorandum, we find that they had no doubt received a consolidated certificate for 1520 RMT of 400 MM BWSC pipes to be manufactured and supplied by the Patancheru unit. However they had supplied 28 pipes from their Azamabad unit because of heavy work load and other technical problems, Patancheru unit had asked them to manufacture and supply. The appellants also undertook to produce end-use certificate from the project authorities and they produced a copy of the letter dt. 09/12/2007 confirming the receipt and end-use of the pipes in question.

5. The observations made hereinabove would show that apparently the pipes were used for the end-use as per the notification. The only difficulty is that according to notification and condition No.47A, the exemption is available subject to the condition if, a certificate is issued by the Collector/DM/DC of the district in which the plant is located, is produced to the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, having jurisdiction, to the effect that such goods are cleared for the intended use specified in Column 3 of the table. The order was placed on Patancheru unit and the certificate was in the name of Patancheru unit and therefore the stand taken by the Revenue that the appellant unit was not eligible for exemption cannot be found fault with. At the same time, we have to take note of the fact that the pipes have been used for the purpose for which the notification provided the exemption. Moreover both Patancheru unit and Azamabad unit belong to the same company. Further the appellants also explained that because of heavy workload and technical problems, pipes were supplied by the other unit. While the demand for duty cannot be found fault with as already mentioned and interest is also payable, we cannot sustain the imposition of penalty under Rule 25 of Central Excise Rules since apparently there was a mistake on the part of the appellant and after all the pipes have been used for purpose for which exemption has been provided. Further the appellants have also reversed the entire amount of CENVAT credit availed in respect of the inputs since they had not paid the duty on the final product. Now that the duty on final products has been upheld by us, the appellants would be entitled to take back the CENVAT credit or seek alternative remedy if it cannot be taken back.

6. In the result, the demand for duty and interest is upheld, penalty is set aside and CENVAT credit already reversed need not have been reversed. The appeal is decided in above terms.

(Operative part of this order was pronounced on completion of the hearing)

JUSTICE G. RAGHURAM PRESIDENT

B.S.V.MURTHY TECHNICAL MEMBER Raja.

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