TMI Blog2015 (10) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... ot fall under the four corners of chapter note 3. - Decided in favor of assessee. As regard the dropping of the demand on account of alleged removal of add on kits and parts and shortage found in the physical stock verification in Powai and Silvassa units, we find that there are serious conflicts between the allegation made in the show cause notices and Commissioner's findings in the impugned orders. The Ld. Counsel also made submissions that due to claim of SSI Exemption demand is not sustainable and also it is time bar. We therefore find that as regard demand of excise duty on alleged removal of add on kits and parts from Powai and Silvassa units needs re-consideration. - matter remanded back on this matter. Determination of turnover for the purpose of SSI exemption - extended period of limitation - Matter remanded back for reconsideration. - APPEAL NOS. E/225, 329 AND 339/2005-MUM - Final Order Nos. A/2831-2833/2015-WZB/EB - Dated:- 31-8-2015 - P.K. JAIN AND RAMESH NAIR, JJ. For The Appellant : Ashutosh Nath, Asstt. Commissioner (AR) For The Respondent : Rajeev D. Wagley and Ms. Anagha Gavade, Advs. ORDER Ramesh Nair, Judical Member - Revenue has fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er heading 8701, 8702, 8703, and 8711 and manufacture of body building of Motor Vehicle falling under 8702. They are also engaged in manufacture of parts/sub assemblies of motor vehicles. In all the three adjudication orders five show cause notices were adjudicated. In the show cause notice summarily demand was proposed on the following counts. (a) Excise duty demand on customization of the already built up motor vehicle on the ground that the customization or modification of built up motor vehicle amounts to manufacture. (b) Excise duty demand on the body building falling under chapter heading 8702 denying the exemption Notification No. 3/2001-CE dated 1/3/2001 on the ground that the respondent availed the Cenvat credit of the input which is in violation of condition of said notification. (c) The excise duty demand on the removal of add on kits on the ground that either it was found short in the stock taking or removed under the cover of challan without issuing the invoices. (d) Excise duty demand by denying SSI exemption Notification No. 8/2001-CE dated 1/3/2001 during the period 2001-2002 on the ground that the aggregate value of the clearances during the year 2000-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s respectively, alongwith interest and as well as impose penalty under the relevant provisions of Central Excise laws. (c) Whether the CESTAT should pass any such other order as may be deemed fit. Appeal No. E/329/05 (a) Whether after taking into consideration, the facts and circumstances as stated above, read with the show cause notice, the said order of the Commissioner, Central Excise, Mumbai-IV is legal and proper? (b) Whether by an order passed under Section 35C of the Act, the CESTAT should: (i) To hold that Central Excise duty is liable on the goods cleared by M/s. DCDPL, Powai to M/s. DCDPL, Silvassa, and consequently, order recovery of Central Excise duty amounting to ₹ 11,66,802/- liable on such clearance. (ii) Deny the exemption availed by M/s. DCDPL, Andheri under the provisions of Notifications No. 08/2001-CE dated 1/3/2001 in respect of clearances effected by it during the year 2001-2002 and consequently, order recovery of Central Excise duty amounting to ₹ 1,68,317/- liable on such clearances. (iii) Impose penalty, as proposed under Show cause notice dated 1/1/2003 issued to M/s. DCDPL, Andheri, on all the noticees and order recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeding the duty on the excisable goods or Rupees ten thousand whichever is greater. (c) Whether the CESTAT should pass any such other order as may be deemed fit. In an another proceeding the appellant had filed appeal against Order-in-Original No. 27/2003 dated 10/12/2003 challenging the confirmation of demand of ₹ 16,48,780/- before this Tribunal by way of an appeal No. E/574/2004-MUM. on the ground that though the respondent had availed modvat credit but equal amount was lying in balance and subsequently that amount stood lapsed which amount to non-availment of Cenvat credit. This tribunal vide final order no. A/649/2004-WZB/C-II dated 22/7/2004 allowed the appeal of the respondent by extending benefit of notification no. 3/2001 -CE dated 1/3/2001. Against the said Tribunal order, revenue field appeal before Hon'ble Bombay High Court which was allowed by the Hon'ble High Court vide order dated 12/3/2015 wherein the Hon'ble High Court reversed the Tribunal's by upholding the demand but the penalty was waived. The order of the High Court then attained finality. Aggrieved by the impugned orders the Revenue filed these three appeals. 3. Shri Ashutosh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such wrong fact are incorrect. He further submits that during the physical stock at Silvassa unit, no excess stock was found so as to assumed that duty would be paid on its further clearance from Silvassa unit. He also submits that no evidence was produced regarding duty paid clearance from Silvassa unit of the goods said to have been transferred from Powai unit. Therefore the demand of duty amounting to ₹ 11,66,802/- raised in the show cause notice dated 1/1/2003 was liable to confirmed. In regard to OIO No. 27/2003 dated 10/12/2003 he submits that demand of ₹ 16,48,750/- though dropped by the tribunal vide order dated 22/7/2004 but the Hon'ble Bombay High Court vide order dated 12/3/2015 maintained the demand confirmed by original order, hence the same attained finality. Regarding duty of ₹ 4,93,276/-, on shortage of goods found in Silvassa unit, duty of ₹ 1,01,644/- on the kits manufactured but not accounted for in the statutory records and duty of ₹ 21,917/- in respect of kits cleared from Silvassa unit without payment of duty, he submits that Ld. Commissioner dropped the demand on the basis that the stock taking was carried out for individ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that as per the Chapter Note 3 only if the whole body of motor vehicle is fabricated and mounted on chasis, then only it amounts to manufacture, whereas it is admitted fact in the present case that the respondent's activity is limited to redesigning and restyling of the already built up cars. It is not a case of the Revenue also that the respondent is removing the old body and fabricating a new body and mounting on the chassis. Therefore the activity of the respondent in any case does not fall under the Chapter Note 3 of Chapter 87 of Central Excise Tariff Act. He submits that in view of this fact, the judgments relied upon by the revenue are not applicable as those judgments are related to the issue where the independent body was fabricated. He further submits that as regard the SSI exemption, the respondent was of bona fide belief that clearance of bus/tempo traveller was under exemption notification no. 3/2001 dated 1/3/2001 and accordingly the value of said exempted goods were not liable to be added in the total aggregate value and consequently they were entitle for SSI exemption for the period 2000-01 as well as 2001-02. He submits that clearances on which SSI exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he most can be demanded only on ₹ 1,59,005/- and not on ₹ 6,35,270/-. As regard duty demand ₹ 21,917/- he submits that this demand was raised on the allegation of clandestine removal whereas no positive evidence was produced therefore the Ld. Commissioner rightly dropped the demand. He further submits that if at all any demand arises the value should be considered as cum duty value and abatement on account of excise duty be extended while re-quantification of the duty. 5. We have carefully considered the submissions made by both sides. 6. In all the appeals the issues to be decided by us are as under: (a) Whether customisation of the motor vehicles as per requirements of customers is amounts to manufactured as per Section 2(f) of Central Excise Act, 1944 and/or Chapter Note 3 of Chapter 87 of Central Excise tariff. (b) Whether dropping of demand by the Commissioner on alleged removal of add on kits and parts from Powai and Silvassa units are correct. (c) Whether the Respondents are entitle for SSI Exemption notification No. 8/2001-CE dated 1/3/2001 during the year 2001-2002. (d) Whether personal penalty imposed for ₹ 5000/- each in two OIO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. In view of this, we upheld the setting aside the demand in respect of customization of the motor vehicle. As regard the dropping of the demand on account of alleged removal of add on kits and parts and shortage found in the physical stock verification in Powai and Silvassa units, we find that there are serious conflicts between the allegation made in the show cause notices and Commissioner's findings in the impugned orders. The Ld. Counsel also made submissions that due to claim of SSI Exemption demand is not sustainable and also it is time bar. We therefore find that as regard demand of excise duty on alleged removal of add on kits and parts from Powai and Silvassa units needs re-consideration. Therefore for this part of the demand we remand the matter to the Original Adjudicating Authority for passing a fresh order after appreciating the facts, considering the representation, if any, made by the respondent, issue of time bar etc. As regard the duty demand related to clearances claimed to be covered under SSI Notification No. 8/2001-CE dated 1/3/2001 during the year 2001-02 it is observed that Ld. Commissioner while computing the aggregate value of ₹ 3 Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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