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2015 (3) TMI 1086 - CESTAT NEW DELHI

2015 (3) TMI 1086 - CESTAT NEW DELHI - TMI - Waiver of pre deposit - Denial of exemption claim - Held that:- While initially, when the appellant had started the manufacture of tubular poles in the year 2005, they had been allowed to avail of benefit of Notification No. 56/02-CE by treating their process as amounting to manufacture. It is only in view of Apex Courtís judgment dated 27/3/06 in the case of Hindustan Poles Corporation vs. CCE, Kolkata (2006 (3) TMI 2 - SUPREME COURT ), that the Addi .....

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se of Hindustan Poles Corporation vs. CCE, Kolkata. (supra) and has held that making tubular poles by joining duty paid price of different diameters by welding would amount to manufacture. In this background there would be no justification for imposition of penalty. - It is seen that the bulk of the duty demand of ₹ 61,74,218/- for the period from January 2012 to November 2012 and December 2012 to June 2013 is within normal limitation period. However, as held by Joint Commissioner, the app .....

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K. Grover, Authorized Representative (DR) ORDER Per. Rakesh Kumar :- The facts leading to filing of these appeals and stay applications are, in brief, as under. 1.1 The appellant are manufacturers of steel tubular poles and the accessories like clamps etc. used on electric poles. The steel tubular poles are made by welding the steel pipes of different diameters. The appellant had set up their unit in December 2005 and since their unit was located in the area specified under Notification No. 56/0 .....

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not amount to manufacture under Section 2 (f) of the Central Excise Act, 1944. The appellant filed refund claims total ₹ 4,28,959/- for the months of March 2006 and April 2006 before the Jurisdictional Assistant Commissioner. However, the Additional Commissioner vide order-in-original dated 31/3/08, keeping in view the Apex court judgment in the case of Hindustan Poles Corporation vs. CCE, Kolkata (supra) (a) rejected the refund claim totalling ₹ 4,28,959/- ; (b) ordered cancellation .....

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in respect of the clearances of tubular poles. 1.3 While Additional Commissioners order dated 31/3/08 holding that the fabrication of tubular poles by welding the steel pipes of different diameters does not amount to manufacture had cancelled the appellants registration certificate, rejected their refund claim under Notification No. 56/02-CE, had ordered the recovery of Cenvat credit taken in respect of inputs alongwith interest and had imposed penalty, the Apex court vide judgment dated 28/3/ .....

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hi Industries vs. CCE, Chandigarh (supra). However, even after the Apex court s judgment in the case of Prachi Industries vs. CCE, Chandigarh (supra), the Department did not take any corrective action for a long time. It is only in the year 2013 that the Department issued two show cause notices show cause notice dated 05/2/13 for demand of duty of ₹ 48,06,722/- in respect of the clearances of tubular poles during period from January 2012 to November 2012 and show cause notice dated 10/9/13 .....

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t subsequently while demanding duty has alleged suppression of fact on the part of the appellant and sought to impose penalty on them under Rule 25 of the Central Excise Rules. 1.4 Both the show cause notices were adjudicated by the Joint Commissioner vide order-in-original dated 28/3/14 by which the total duty demand of ₹ 61,74,218/- was confirmed against the appellant alongwith interest under Section 11AA. The Joint Commissioner, however, allowed the Cenvat credit in respect of the input .....

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hese two appeals have filed alongwith stay application. 2. Heard both the sides in respect of stay applications. 3. Shri Rajesh Gupta, CA, learned Counsel for the appellant, pleaded that the non-payment of duty in respect of clearances of tubular poles by the appellant was in pursuance of the order dated 31/3/08 passed by Additional Commissioner by which he, holding that the fabrication of steel tubular poles by joining the steel pipes of different diameters, does not amount to manufacture, had .....

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e Joint Commissioner in order-in-original, if duty is demanded on the tubular poles the appellant would be eligible for Cenvat credit of ₹ 36,15,915/- and as such the net duty liability would be only ₹ 25,58,303/-, that this duty would also be exempt under Notification No. 56/02-CE, that in view of this, the impugned order confirming duty demand against the appellant alongwith interest and imposing penalty is not correct, that in any case in view of the circumstances of this case the .....

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records. 6. There is no dispute that while initially, when the appellant had started the manufacture of tubular poles in the year 2005, they had been allowed to avail of benefit of Notification No. 56/02-CE by treating their process as amounting to manufacture. It is only in view of Apex Court s judgment dated 27/3/06 in the case of Hindustan Poles Corporation vs. CCE, Kolkata (supra), that the Additional Commissioner vide order-in-original dated 31/3/08 cancelled the appellant s registration c .....

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