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C.C.E. Chandigarh Versus Punjab Tractors Ltd.

2015 (6) TMI 433 - CESTAT NEW DELHI

Duty demand - Captive consumption - Whether the Transmission Assemblies captively consumed in the manufacture of tractors of Engine Displacement Capacity (EDC) below 1800-CC manufactured by respondent during the period 1.8.1996 to 1.06.1998 is exigible to excise duty - Bar of limitation - Held that:- TA comes into existence during manufacture of Tractor, is an intermediate product and the same is a distinct product commercially known to the market as such. The Apex Court [2015 (5) TMI 28 - SUPRE .....

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TAs which came into existence in the course of manufacture of Tractors. - Respondent cannot be accused of any fraud, wilful misstatement or suppression of facts so as to invoke the extended period of limitation clause as per proviso to Section 11A(1) of the Central Excise Act, 1944. Since the Show Cause Notice for demand of duty for the period from 1.8.1996 to 1.6.1998 has been issued on 31.8.2001, the same is wholly time barred and the duty demand is not sustainable on limitation. - Decided aga .....

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ractors of Engine Displacement Capacity (EDC) below 1800-CC manufactured by respondent during the period 1.8.1996 to 1.06.1998 is exigible to excise duty. 2. Revenue filed this appeal against the Order-in-Original passed by CCE Chandigarh. In the impugned order the CCE has come to the conclusion that it is not established that TA is an excisable product emerging at intermediate stage in the manufacture of Tractors by the respondent. The proceedings initiated for excise duty demand of ₹ 5,5 .....

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nufacture of Tractors of EDC below 1800-CC. 4. A show cause notice dated 31.8.2001 was issued to the respondent alleging that the respondent is liable to pay excise duty on 7014 pieces of TAs captively consumed in the manufacture of Tractor EDC below 1800-CC which was exempt from Central Excise duty upto 01.6.1998. The TAs are separately classifiable under Central Excise Tariff heading 8708 and therefore attracted Central Excise duty @ 15% ad valorem during the period 01.08.1996 to 01.06.1998. T .....

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of TAs captively consumed were not eligible for exemption as per Notification No. 67/95-CE dated 16.3.1995. The respondent was thus asked to show cause as to why Central Excise duty of ₹ 5,50,99,810/- payable on 7014 TA should not be recovered under Section 11A of the Central Excise Act, 1944 and why penalty should not be imposed under Section 11AC and why interest under Section 11AB should not be demanded and recovered and also why penalty should not be imposed under Section 9(2),173Q and .....

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ds. It is his case that in the process of manufacture of Tractor, TA comes into existence as an independent product and is then put for online assembly along with other components of Tractors. He submits that on 26.7.2001 the officers of Central Excise Preventive took photographs of the assembly which was assembled by putting together the following sub assemblies: a) differential sub-assembly including trumpet I axle sub-assembly. b) Rear cover sub-assembly. c) Gear box sub-assembly. d) Steering .....

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the extended period of limitation is to be invoked in this case as there is fraud, willful misstatement and suppression of facts. In support of his argument he relied on the following judgement: i) Union of India Vs. J.G. Glass Industries Ltd. reported in 1998 (97) E.L.T. 5 (S.C.) ii) Escorts Ltd. Vs. CCE, New Delhi-IV reported in 2004 (172) E.L.T. 223 (Tri.-Del.) iii) M/s ESCORTS LTD Vs. CCE, Faridabad reported in 2015-TIOL-92-SC-CX Civil Appeal No. 6561 of 2004, Civil Appeal No. 457 of 2006 an .....

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rding to him so-called TA was only an aggregate of various sub assemblies which connected the engine of Tractor with its wheels. He pointed out that the TA which is relied on by the revenue as an excisable product was only components in the continuous process of manufacture. He contended that the sub-assemblies would not constitute T.A. which is excisable under law. The second argument advanced by the respondent is that they have not sold a single TA and the TA was designed for respondent s Trac .....

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se, has held that TA comes into existence during manufacture of Tractor, is an intermediate product and the same is a distinct product commercially known to the market as such. The Apex Court has categorically held that the transmission assemblies of tractors are commercially known products, and that the fact that not a single sale of such Assembly has been made by the appellants is irrelevant. The ratio in the above case is squarely applicable to the case before us. We, therefore, have no doubt .....

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