2008 (1) TMI 782

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..... ereinafter referred as FSL-2) is engaged in the manufacture of coil springs and leaf springs out of spring steel rounds received from FASL, and leaf springs were supplied to Railways. The coil spring and leaf springs were manufactured as rounds as per drawings provided by the Indian Railways. The show cause notice was issued to the appellant that FASL manufacture allow steel rounds weighing 2622.23 MT for supply to FSL 2 without getting them entered into their RG 1 record and the same were supplied without payment of duty to FSL 2. The FSL 2 manufacture and supply the coil springs to Indian Railways out of alloy steel rounds received without payment of duty. It is also like that FASL obtained alloy steel billets from their other units for M .....

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..... cause notice; that if there is no clandestine manufacture and clearance by Frontier Steel Alloy Ltd. does not arise. He finally submitted that the demand pertains to the period from October, 1997 to June, 1999 during which period they were discharging the duty under Section 3A of the Central Excise Act on the basis of Annual Capacity of Production (except for the period December, 1998 to 11-5-1999); that they had sent an intimation to the Department on 25-11-98 regarding their stopping activity relating to manufacture of M.S. bars/twisted bars w.e.f. 30-11-1998 and to start manufacturing activity for spring steel round structures; that the Chartered Engineer has given a certificate to the effect that simultaneously both the products cannot .....

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..... without payment of duty the goods were cleared without payment of duty to Railways or to some other party. As the FSL 2 received the steel rounds on payment of duty from other manufacturers regarding which they had also availed credit it cannot be said that the same quantity has been supplied by FASL without payment of duty to M/s. FSL-2. As M/s. FSL-2 manufactures coil springs and leaf springs out of steel round received from other manufacturers on payment of duty and the same have been supplied to the railways. Therefore, the present demand on FASL is not sustainable, hence set aside. Consequentially penalties are also set aside. Appeals are allowed. (Pronounced in the open Court on 10-1-2008)
Case laws, Decisions, Judgements, Orders .....

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