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VVF Ltd. Versus Commissioner of Central Excise, Mumbai

2015 (10) TMI 2139 - CESTAT MUMBAI

Demand of duty on goods manufactured by the Job worker - Assessee received goods under Notification No.214/86 and not returned the same - Held that:- On perusal of the Notification No.214/86, it is seen that para 2 of the said notification clearly lays down that it shall be the responsibility of the supplier of goods to ensure that the goods are used in the manner specified in the notification. The liability in respect of the goods produced out of, such inputs would be of the recipient of the go .....

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bility of the sender and that of the receiver of the goods. - show-cause notice itself issued wrongly to the recipient of the goods instead of the supplier of the goods. Learned AR further argued that since the appellant have paid the duty they have assumed the liability and therefore, they cannot escape the responsibility of paying interest and penalty. Reliance on the decision of the Hon ble High Court of Madras in the case of Alstom T&D India Ltd., (2015 (6) TMI 300 - MADRAS HIGH COURT) is mi .....

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pellant have units in Kutch as well as in Sion, Mumbai. The appellant unit in Sion, Mumbai received certain material from Kutch unit under Notification No.214/86-CE dated 25/03/1986. Part of this material was not returned to the Kutch unit and consumed by the Sion unit. A show-cause notice was issued to the Sion unit alleging that they have received goods under Notification No.214/86 and not returned the same. The said show-cause notice was confirmed by the Assistant Commissioner and the appeal .....

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oods in respect of which, - (i) the supplier of the raw materials or semi-finished goods avails of the credit of duty paid on inputs under rule 57A of the said Rules, and gives an undertaking to the Assistant Collector of Central Excise having jurisdiction over the factory of the job worker that the said goods will be used in or in relation to the manufacture of the final products; (ii) the said supplier produces evidence that the said goods have been so used; and (iii) the said supplier underta .....

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e Central Excise Tariff Act, 1985 (5 of 1986). Goods classifiable under any headings of Chapters 28, 29, 30, 32, 33, 34, 35, 36, 37, 38, 39, 40, 70, 72, 73, 74, 75, 76, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95 or 96 (other than those falling under Heading Nos. 36.03 or 37.05) of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). 3. He argued that there was no liability of paying duty on the unit at Sion and duty could have only be demanded from Kutch u .....

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king to the jurisdictional departmental authorities that the goods shall be so used and also produces evidence that the goods have been actually so used. Accordingly, the matter was taken up with the supplier of the raw material by the Jurisdictional Central Excise authority viz. In charge Central Excise Authority of M/s.VVF Ltd. Gandhidham. M/s.VVF Gandhidham vide their letter dated 04/08/2009 stated to the jurisdictional range superintendent that the challan issued under notification No.214/86 .....

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uty through e-payment vide GAR-7 Challan No.00010 dated 20/01/2009 amounting to ₹ 2,41,505/- vide PLA debit entry No.290/20.01.2009 . 3.1 He asserted that the adjudicating authority recognized that the liability was of the Kutch unit but fixed it on them only because they had paid. He also relied on the decision of the Hon ble Supreme Court in the case of Tata Chemicals Ltd. Vs. CC (P) Jamnagar 2015-TIOL-120-SC-CUS wherein the Hon ble Supreme Court observed as follows: Clearly the samples .....

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y perverse finding both on fact and law. On fact, it has been more than amply proved that no representative of the appellant was, in fact, present at the time the Customs Inspector took the samples. Shri K.M. Jani who was allegedly present not only stated that he did not represent the Clearing Agent of the appellants in that he was not their employee but also stated that he was not present when the samples were taken. In fact, therefore, there was no representative of the appellants when the sam .....

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He asserted if a particular method is prescribed by law the same has to be followed. In this case the Notification No.214/86 clearly prescribed that liability is to be fixed on the sender of the goods. 3.3 Learned Advocate further argued that there was no determination of duty done and therefore, interest and penalty could not have been recovered. He argued that penalty and interest and could only be recovered after determination of duty under Section 11A and since in this case no demand has be .....

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sputed. The grievance was that? the aspect of undervaluation has not been considered by the Tribunal at all. Grievance would have merited acceptance if the ultimate exercise would have benefited the Revenue by collection of duty in the coffers of the exchequer. In the facts of the present case, admittedly no such benefit accrues to the exchequer. In the circumstances, if the Tribunal has chosen not to determine an academic issue, it is not possible to state that any legal infirmity exists in the .....

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of the decision of the Hon ble Tribunal in the case of Xerox India Ltd., Vs. CCE, Meerut 2011 (270) ELT 0395-(Tri-Del). He highlighted specifically para 88 of the said decision which reads as follows: 88. It is settled law that when a cause of action in relation to offendable incident or in relation to series of activities which are offendable or the violation of the provisions of law arises within the jurisdiction of different investigating officers or adjudicating officers, every such officer .....

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pon the matter. 4.1 He further argued that once the appellant have paid duty voluntarily no determination is required interest can be recovered in terms of Section 11A (2b). For this purpose, he relied on the decision of the Hon ble High Court of Madras in the case of Alstom T&D India Ltd., Vs. CESTAT, Chennai 2015 (316) ELT 362 (Mad.). He particularly relied on para 8.1 & 8.2 of the said judgement which reads as follows: 8.1 The second plank of the argument raised by the learned counsel .....

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interest on delayed payment of duty does not arise. 8.2 Section 11AA of the Act, as amended by Section 64 of the Finance Act, 2011 (8 of 2011), does not in any way advance the case of the appellant, as we find that the liability to pay interest on delayed payment of duty is clearly envisaged in Section 11A(2B) read with Explanation 2 to the said provision. Such interest was leviable even during the period in question. In fact, the Supreme Court in SKF India Ltd. case, referred supra, observed t .....

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e desired objective. Even as originally cast the provisions were far from very happily framed and worded. Subjected to amendments from time to time those provisions have now become so complicated that in order to discern their meaning it becomes necessary to read them back and forth several times. We see no reason why the two periods for which interest is leviable may not be put together and dealt with in one consolidated provision instead of being split up in Sections 11AA and 11AB. Also, there .....

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all at the Kutch unit and this assertion of there have not taken any credit, the question of demand of duty and interest does not arise. 6. I have gone through the case records and the submissions made by both sides. It is noticed that primary question to be decided is if the jurisdictional authorities at Sion had the jurisdiction to issue show-cause notice in this matter. On perusal of the Notification No.214/86, it is seen that para 2 of the said notification clearly lays down that it shall be .....

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