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M/s. Jai Maa Appliances (P) Ltd. Versus CCE Chandigarh

2015 (4) TMI 851 - CESTAT NEW DELHI

Area based exemption - Manufacturing activity or not - Job work - Activity of winding the wire on the stator and thereafter were putting varnish on the wires wound on the stators, receipt of stamping rotors and electrical grade aluminum and also dies and making cast, machined and painted rotors, which were being sent back to the principal manufacturer - Held that:- duty would be chargeable on the goods being made by the appellant on job work basis only if, those goods are in fully finished condi .....

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h regard to sending of semi finished/ raw material to SE for certain job work and hence, it cannot be said that the Department was not aware of the activity of SE. Similarly, in respect of JMAPL, it is seen that during 2004, there was correspondence between them and the Department with regard to the nature of their activity and whether they are eligible for exemption under notification no. 50/03-CE and from this correspondence also it is clear that the Department was aware about the nature of th .....

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e and for the same reason, penalty under section 11AC would not be imposable. - Matter remanded back - Decided in favour of assessee. - Excise Appeal No. E/48/2009 -Ex[DB], Excise Appeal No. E/451/2010 -Ex[DB] - Final Order No. 50822/50823 /2015-Ex(Br) - Dated:- 12-3-2015 - Hon'ble Mr. Rakesh Kumar, Member (Technical) And Hon'ble Mr. S.K. Mohanty, Member (Judicial),JJ. For the Appellants : Mr. Rajesh Kumar, Advocate For the Respondent : Mr. MS Negi, DR ORDER Per Rakesh Kumar (for the Ben .....

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od from 2004 to 2008 were manufacturing electrical fans. KEL were sending the stators winding wires and top and bottom covers to JMAPL for certain job works. JMAPL were winding the wire on the stator and thereafter were putting varnish on the wires wound on the stators. In respect of top and bottom covers, the same were subjected to some machining. Top and bottom covers after being machined and the stators with copper wire wound on the same and varnished were being returned back by JMAPL to KEL. .....

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st JMAPL and SE along with interest and penalty of equal amount were imposed under section 11AC. The orders in this regard were passed by the Commissioner of Central Excise Chandigarh. Against these orders of the Commissioner, these appeals have been filed. 2. Heard both the sides. 3. Sh. Rajesh Kumar, Advocate, the Ld. Counsel for the appellant pleaded, that the items which emerge from the factory of the appellants are not fully finished parts of the fans, that in case of JMAPL they receive the .....

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annot be called fully finished parts of fans and, hence, the same are not marketable, that in case of SE, they receive the stamping rotors, electrical grade aluminum metal and dies and they fabricate cast and machined rotors which are intermediate product and it is these cast and machined rotors which are sent back to KEL where the same are subjected to further process before being used as part of electrical fans, that in case of SE also, the items which are sent back to KEL cannot be said to fu .....

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gard to the availment of duty exemption under this notification. He, therefore, pleaded that the impugned orders are not sustainable. 4. Sh. M S Negi, the Ld. DR, defended the impugned order by reiterating the findings of the Commissioner and emphasized that in both the cases the goods which are made by the appellant on job work basis are fully finished parts of the fans and the same are used by KEL without any further process, and hence, the same have to be treated as marketable, and hence, exc .....

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egard to benefit of exemption under notification no. 50/03-CE, he pleaded that this correspondence was not in respect of this claim of JMAPL for exemption under notification no. 50/03-CE as no such declaration had been filed by JMAPL at that time. With regard to limitation, he pleaded that longer limitation period under proviso to section 11A(1) has been correctly invoked. He accordingly, pleaded that there is no infirmity in the impugned orders. 5. We have considered the submissions from both t .....

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or the exemption under this notification. JMAPL received stators, winding wire and top and bottom covers and while the top and bottom covers were subject to machining, in respect of the stator, the job work winding of the wire and thereafter the varnishing was of the stator was done. The stator with wire wound on it and varnished and the machined top and bottom covers were returned by JMAPL to KEL. The point of dispute is as to whether the items which are being returned by JMAPL to KEL are fully .....

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ed goods which require further processing. 6. In both the cases the appellant s claim is that the items being cleared by them to KEL are not fully finished goods but have to be subjected to further processing like grinding, spindle pressing, testing etc. On going through both the orders, it is seen that no finding has been given by the Commissioner on this point. In our view, the duty would be chargeable on the goods being made by the appellant on job work basis only if, those goods are in fully .....

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it is seen that so far as SE are concerned, there was correspondence between KEL and the Department with regard to sending of semi finished/ raw material to SE for certain job work and hence, it cannot be said that the Department was not aware of the activity of SE. Similarly, in respect of JMAPL, it is seen that during 2004, there was correspondence between them and the Department with regard to the nature of their activity and whether they are eligible for exemption under notification no. 50/ .....

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