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M/s Man Structurals Pvt Ltd Versus Commissioner of Central Excise, Jaipur-I

2016 (1) TMI 435 - CESTAT NEW DELHI

Duty demand - Removal of towers for testing - whether the appellant's are liable to pay duty on the tower manufactured, and send for destructive testing - Held that:- Unless the towers undergo destructive testing they are not saleable to the buyer/Rajasthan Rajya Vidyut Prasaran Nigam Ltd. Thus if not saleable, it only means that the process of manufacture is incomplete and the duty of excise is not leviable on them. Merely because the appellants received the cost for manufacture along with test .....

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order is not sustainable - Decided in favour of assessee. - Appeal No. E/2728/2007-EX(DB) - Final Order No. A/53319/2015-EX(DB) - Dated:- 19-10-2015 - Sulekha Beevi C S, Member (J) And B. Ravichandran, Member (T) For the Appellant : Shri Bipin Garg, Adv For the Respondent : Shri S Nunthuk, JCDR ORDER Per Sulekha Beevi CS The appellant is engaged in manufacture and supply of towers to Rajasthan Rajya Vidyut Prasarn Nigam Ltd. In the contract entered between the parties there is a condition that .....

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ost of tower, the appellants are liable to pay central excise duty on the towers removed for testing. A show cause notice dated 5.12.2006 was issued proposing recovery of duty, with interest and penalty. The appellants contested the notice stating that as the said towers have been destroyed during testing, there is no liability to pay duty. After adjudication the order passed confirmed the duty demand, interest and penalty. In appeal, the Commissioner (Appeals) upheld the same vide the impugned .....

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no dispute that the goods were removed for job work/testing according to the provisions of law. It is the case of the department that as the appellants have received the value of the tower including cost of testing from the buyer, they are liable to pay the excise duty. It is not disputed that the goods were removed for testing. It is also not disputed that in the process of testing the goods/towers were destroyed and were returned as scrap only. Per se there was no clearance of excisable goods. .....

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bly goods at that stage were not excisable goods. As per law, central Excise duty is chargeable only on excisable goods. 5. Further the contract entered between the parties for supply of towers, stipulates that the towers should undergo quality control testing/destructive testing. As this requirement is compulsory, unless the towers satisfy the technical specifications including that of destructive testing, they cannot be considered as goods liable to payment of duty. 6. Similar issue came up fo .....

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