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Jayant Juneja Versus Commissioner Of Central Excise, Jaipur

2015 (12) TMI 669 - SUPREME COURT

Valuation - manufacture of items of furniture on job work basis - inclusion of cost of raw materials, job-charges paid to M/s. SJA, plus drawings and design charges for the furniture items - handicraft items or not - banafide belief - Extended period of limitation - Held that:- Assessees had taken a specific plea to the effect that they bona fide believed that the manufacture of wooden furniture manually by artisans/craftsmen were wholly exempt from payment of duty under Notification No. 76/86-C .....

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/s. ITC Ltd. were exempt for payment of excise duty. Thus, insofar as the appellants are concerned, they had taken a particular stand in the declaration filed as early as on 16.07.1987 disclosing all relevant facts. However, the Central Excise Department at New Delhi did not take any action thereof. Issuance of show cause notice on 22.10.1996, after a long gap, would clearly be time barred and under the aforesaid circumstances, it is not a case where the proviso to Section 11A(1) of the Act coul .....

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D. Satish, Adv. For the Respondent : Mr. Yashank Adhyaru, Sr. Adv., Ms. Nisha Bagchi, Adv., Ms. Sunita Rani Singh, Adv., Ms. Sujeeta Srivastava, Adv., Mr. Sanjai Kumar Pathak, Adv. And Mr. B. Krishna Prasad,Adv. ORDER The facts in brief are that on 13.1.1992,M/s Sita Juneja & Associates (hereinafter referred as M/s SJA), was awarded a contract by M/s ITC Ltd. to make different items of furniture for a Five Star Hotel at Jaipur, known as Hotel Rajputana Palace Sheraton. The work was to be don .....

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ned by M/s ITC Ltd., had entered into agreements with different manufactures of furniture for the manufacture of different items of furniture at site on labour contract basis as per the terms, conditions and rates set out in the respective agreements, the Officers of the Central Excise visited Hotel Rajputana on 12.12.1995 and directed the representatives of M/s ITC Ltd. to furnish complete information relating to the manufacture of different items of furniture for use in their premises. M/s ITC .....

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ents recorded, it appeared that M/s SJA had engaged itself in the manufacture of items of furniture on job work basis for M/s ITC Ltd. and, accordingly, they are the Manufacturer of the said excisable goods within the meaning of Section 2(f) of the Act. Accordingly, show cause notice dated 22.10.1996 was issued to M/s. SJA asking it to show cause as to why Central Excise Duty amounting to ₹ 23,90,715 should not be demanded from it under Rule 9(2) of Rules, 1944 for the extended period as p .....

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is that the firm had been dissolved on 05.10.1996 and one of the partners namely, Sita Juneja as proprietress was running the business thereafter under the name and style of Sita Juneja & Associate . The demand made was resisted by the erstwhile partners in their replies to the notice on various grounds, one of which was that the partnership firm was no more in existence. According to the appellants, there were no provisions in the Central Excise Act or any rules framed thereunder for asses .....

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confirmed the demand duty of ₹ 17,51,329/- under Section 11A read with Rule 9 (2) and imposed penalty of equal amount under Section 11AC. The Commissioner held that appellant along with other in the capacity as partners of the erstwhile firm were jointly and severally liable to pay the duty and penalty amounts as also to pay interest under Section 11AB on the duty amount. The Commissioner imposed penal of ₹ 1.5 lacs on appellant and ₹ 10 lacs on M/s Hotel Rajputana under Rule .....

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essed to duty in their names and whether any demand of such duty could be raised on them under the Act and the relevant rules framed thereunder. The Member (Technical) and Member (Judicial) of the Tribunal differed with each other and the matter was referred to before the President and the President consented with the view taken by Member (Technical) The Tribunal vide its order dated 29.08.2007 dismissed the appeal filed by the appellant and partly allowed the appeal filed by M/s Hotel Rajputana .....

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nd and are covered by the description of other furniture under Heading 94.03. It also held that M/s. SJA is not liable to pay any penalty since the duty demand was for the period prior to insertion of provisions. The quantum of redemption fine was also reduced to ₹ 3 lacs. However, no finding was given on the aspect of the immovability of the items in question and the issue of limitation. On the other hand, Member (Technical), only gave a finding on the first issue and held that even after .....

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alon the same issue decided in the case of Gopal Industries vs. CCE and agreed with Member (Technical). Hence, these appeals. After hearing the learned counsel for the parties, we are of the opinion that the appeals warrant to be allowed solely on the ground that the show cause notice issued was beyond the period of limitation and extended period of limitation as per the proviso to Section 11A(1) of the Act invoked by the Department was impermissible in the facts of the present cases. We may not .....

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