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Komatsu India Pvt. Ltd., T. Laxmi Narayana Versus Commissioner of Central Excise, Nagpur

2016 (8) TMI 1063 - CESTAT MUMBAI

Duty liability - parts of dumpers and others imported, further repacked and labelled by the appellant and sold - whether the items/parts which are repacked are parts of automobiles to fall under Third Schedule and/or Section 4A Notification or not - Held that:- the appellant has no case on merits as the Tribunal in the case of Larsen and Toubro Ltd. vs. CCE [2015 (12) TMI 224 - CESTAT MUMBAI] has held that these items are liable for central excise duty as per Section 2(f)(iii) of the Central Exc .....

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lue only. On this point, we agree with the appellant that the value which has been considered, if it is, the transaction value as per the invoice, then the benefit of cum duty has to be extended to the appellant, is the law settled by various High Courts and even in the case of Larsen and Toubro Ltd., the Bench had extended such a benefit. Having held so, we find that the quantification of the duty after extending cum duty benefit needs to be redone by the lower authorities. - Cenvat credit .....

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s of entry on the parts which were imported, repacked and sold. - Requantification of demands - Held that:- the adjudicating authority will also work out the interest liability on the main appellant. Since the penalty imposable is on the main appellant is dependent upon the quantum of duty liability, we also direct the adjudicating authority to consider the quantum of penalty to be imposed on the appellant after requantification of the duty liability. - Imposition of penalty - suppressio .....

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n of the provisions of the Central Excise Act, personal penalty under Rule 26 is not imposable on the individual. Accordingly, we set aside the penalty imposed on the individual. - Appeal disposed of - Appeal Nos. E/86490, 86489/14-Mum - A/89413-89414/16/EB - Dated:- 25-8-2016 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri G. Natarajan, Advocate, for the appellant Shri Hitesh Shah, Commissioner (AR), for the respondent ORDER Per M. V. Ravindran These two app .....

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es of the main appellant and subsequent investigation and statements recorded, it appeared that the activities of the main appellant like repacking and affixing of MRP of the unit containers of the goods amounted to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1944. Show cause notice was issued to the main appellant as well as the individual demanding duty with interest and also for imposition of penalty. The main appellant as well as the individual contested the demands .....

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iod. He would take us through the entire legislative intent and submit that the items/parts which are repacked are not parts of automobiles to fall under Third Schedule and/or Section 4A Notification. It is his submission that there was a drafting error and these items were not included in the Third Schedule but were included in the Section 4A Notification. He would then take us through the definition of motor vehicle and construction equipment vehicle under the Motor Vehicles Act, Air Pollution .....

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on of the term automobile taxing statutes, especially those dealing with deeming fiction have to be interpreted strictly. He would submit that the Revenue relied on the decision in the case of JCB India Ltd. and Larsen and Toubro Ltd. but the facts are totally different as in the case of Larsen and Toubro Ltd., the parts were of Scania trucks, dumpers, motor graders, wheel loaders, dozers and hydraulic excavators while in the case of JCB India Ltd., the parts involved were of loaders, backhoe lo .....

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aka High Court as reported at 2015-TIOL-1189-HC-KAR-CX) and Western Coalfields Ltd. vs. State of Maharashtra 2016-TIOL-78-SC, for the proposition that reliance can be placed on other Central Acts for arriving at the correct conclusion. 4. As regards the invocation of extended period, it is his submission that the business of packing, repacking was commenced by the appellant in 2009 and circular issued by the Central Board of Excise and Customs in 2008 was indicating the dumpers and other machine .....

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in the case of JCB India Ltd., the demand has been confirmed only for normal period. He relies upon the judgment of the Hon ble Karnataka High Court in the case of BEML (supra). The demand has been restricted by the Hon ble High Court within the limitation period. It is his submission that personal penalty imposed on the employee of the appellant is not at all justified, hence it may be dropped. 5. The learned departmental representative, on the other hand, would take us through the entire orde .....

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vehicles are self-propelled, either on rubber/pneumatic wheels or steel drum wheels and hence they are all automobiles and the parts manufactured by the appellant would fall under the category of parts of automobiles for applying the demand of the duty under Section 4A of the Central Excise Act, 1944. He would submit that automotive vehicles may be classified under Chapter 84 or 87 but did not lose the identity as automobiles. He would submit that reliance placed on the circulars of CBEC of 1990 .....

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ended at this juncture. As regards the benefit of cum duty, the said benefit cannot be extended for the goods under Section 4A. This is because there is prescribed abatement available and was considered while fixing the abatement. He would rely upon the decision of the Tribunal in the case of CCE, Pune- vs. JCB India Ltd. reported in 2014-TIOL-09-CESTAT-MUM and Larsen and Toubro Ltd. vs. CCE reported in 2015-TIOL-2561-CESTAT-MUM, as the issue is decided on merits against the appellant and submit .....

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te involved in this case is regarding the liability to duty on the parts imported, further repacked and labelled by the appellant and sold. It is on record that the appellant sells most of its parts to Larsen and Toubro Ltd. and some quantity to others. The parts which are repacked are for dumpers and other vehicles. 8. At the outset, we find that on merits, the appellant has no case as the Tribunal in the case of Larsen and Toubro Ltd. vs. CCE reported in 2015-TIOL-2561-CESTAT-MUM, in paragraph .....

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s, components and assemblies of automobiles are covered in the third schedule to the Central Excise Act which is required to be read with Section 2(f)(iii) of the same Act. Further, parts, components and assemblies are also specified by notification for purpose of valuation under Section 4A. The appellants contention is that earlier mentioned earth moving vehicles/equipments are not automobiles and therefore parts, components and assemblies being dealt with by them are not covered under Section .....

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al was considering identical issue and also the fact that the goods which were repacked and manufactured by the appellant were sold to Larsen and Toubro Ltd., who further sold the same. The Tribunal held in the case of Larsen and Toubro that these items are liable for central excise duty as per Section 2(f)(iii) of the Central Excise Act, 1944 after considering the entire gamut of the arguments made by the learned counsel before them. On careful reading of the judgment of the Tribunal, we find t .....

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lso. We find that the appellant being in the organized sector, should have known the law and should have considered the implications of that before hand. In view of this, we hold that the invocation of extended period is correct. 9. As regards the cum duty benefit on the goods which were considered as manufactured, we find that the duty has been demanded under old Section 4 as well as Section 4A of the Central Excise Act, 1944. On perusal of the annexures to the show cause notice, which has calc .....

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ellant, is the law settled by various High Courts and even in the case of Larsen and Toubro Ltd., the Bench had extended such a benefit. Having held so, we find that the quantification of the duty after extending cum duty benefit needs to be redone by the lower authorities. 10. As regards the eligibility to avail cenvat credit of the CVD paid by the appellant on the goods imported, we find strong case in favour of the appellant as it has to be held that if the appellant is saddled with the centr .....

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. For verification of the claim of the CVD, we remand the matter back to the adjudicating authority to requantify the demands after extending the eligible cenvat credit to the appellant. 11. After requantification of the demands as indicated in paragraphs 9 and 10, the adjudicating authority will also work out the interest liability on the main appellant. Since the penalty imposable is on the main appellant is dependent upon the quantum of duty liability, we also direct the adjudicating authorit .....

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