TMI Blog2017 (9) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... as the correctness of finding regarding confiscation and consequent redemption fine has to be re-examined by the original authority. Penalty u/r 26 of CE Rules, 2002 - Held that: - we note that the second appellant is a limited company. In various decisions, the tribunal has held that penalty under Rule 26 can be imposed only on individuals and not on companies - the order has been passed exparte and the appellant had claimed that due opportunity has not been provided to them to defend their case. In fact they claimed that they have filed reply to the SCN 24.12.2011 which was not considered. The original authority is required to decide the case of penalty, afresh. Appeal decided against appellant in part and part matter on remand - Appeal allowed by way of remand. - E-52001, 52093/2014-EX(DB), E/Misc/50366/2017-Ex(DB) - A/54636-54637/2017-EX[DB] - Dated:- 5-7-2017 - (Dr.) Satish Chandra, President And Mr B. Ravichandran, Member (Technical) Present for the Appellant: S/Shri Rajesh Kumar, TR Harsh Makhija Present for the Respondent: Ms Suchitra Sharma, JCR ORDER Per: B. Ravichandran These two appeals are against common impugned order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. b) The product fabricated by the main appellant are unfinished pipes which become complete and functional in the operation of erection and they actually become immovable property upon erection in the required site. c) The pipes are not marketable products as they are made to specific requirement for the NTPC project. d) Exemption under notification no.3/2005 CE dated 24.02.2005 should be applicable, considering the amendment carried-out vide notification No.41/2011-CE dated 18.11.2011 as retrospective. e) All operation, if carried-out in the factory of NTPC benefit of notification No.67/1995, is available. f) The valuation adopted to arrive at duty liability is not correct. ₹ 16,506/-, which is a rate charged by M/s Simplex to NTPC, cannot be considered for tax liability of the main appellant. The said rate includes fabrication, erection and transportation whereas the fabrication charges are only ₹ 3880/- PMT. Further, 3195 PMT of structural steel said to have been supplied by NTPC is used for fabrication of pipes, test plates, protection against transit damage, erection and installing of temporary structures, saddles, etc. There was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that they have undertaken various fabrication work in terms of work order in their own account using the material supplied by the main contractor. We note that the original authority exhaustively examined this issue with the help of ratio laid-down in various decided cases. We are in agreement with the findings as recorded by the original authority. The same is re-produced below: 6.3.5-Careful examination of the manufacturing activities as detailed above, reveals that the party has manufactured CW Liners and Pipes Bends of 1000 mm to 3200 mm. These pipes are required and used in cooling water of Thermal Power Plant of M/s NTPC, Vidhyanagar Distt. Singrauli. These pipes have a different and distinct identity as compared to the MSD plates (raw material) and are classifiable under a separate/different Tariff heading other than the MS Plates. The resultant products i.e. Pipes Bends fall under Sub heading 7305 39 90 of the first schedule to the Central Excise Tariff Act, 1985 (5 of 1986). The CW Liners Pipes so fabricated from mild steel by welding process, which fall under Sub heading 7305 39 with eight digit classification as 7305 39 90, thus, satisfy the requisite two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instruction of engineer of M/s Simplex that they are providing service of fabricating and erecting CW liners and pipes and they are only piece rate contractors. It is observed that the issue has already been settled in J.S.T. Engineering Services Vs CCE, Jamshedpur case (supra) in which Hon ble Tribunal has held: This brings us to the second question to be decided in this matter that is who is the manufacturer? Manufacturer is the one who actually undertakes the manufacturing activity. According to the appellants they had, after getting Letter of Intent from M/s DVC had entered into another contract with M/s Rainbow Engineering Works and awarded job for fabrication, erection, testing and commissioning of CW piping-system for DVC Bokaro Site. He has also drawn our attention to the condition of the contract dated 31.12.1982 according to which all tools tackles/consumables such as electrodes, gasses shall be provided by Rainbow who will also provide a competent Site Engineer and required skilled, semi-skilled and unskilled labour force . The contract also contained clause for penalty for delayed fabrication, erection and commissioning. This goes to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Finance Act, 1994 by itself will not absolve them from central excise duty liability for manufacture of any excisable items which might have been used in completion of the service rendered by them. We are in agreement with the findings of the original authority as below: 6.6.1. As regards the invoking of extended period or issue of limitation, it is noticed that M/s KFPL did not apply for the Central Excise registration to the jurisdictional Central Excise authority i.e. Superintendent, Central Excise, Range-Waidhan, for the manufacturer of CW Liners, Pipes Bends and never informed to the Department that they were carrying out any such activity from November, 2009 as revealed from the statement dated 03.06.2011 of their authorized representative. Department came to know this fact only when on gathering intelligence, an investigation in the matter was initiated. They failed to maintain daily stock register for manufacture and clearance of the excisable goods. They cleared the said excisable goods without issuance of invoice and without payment of appropriate Central Excise duty. They also did not file statutory monthly ER-1 returns. Thus, the party has suppressed the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty liability as enclosed to the show cause notice. It is apparent that the claims of the main appellant have not been considered in detail before quantification of duty liability by the original authority. 13. One more important aspect contested by the main appellant is with reference to confiscation of detained goods and imposition of redemption fine for releasing the same. The main appellant categorically stated that the question of confiscation does not arise as there was no seizure of the goods. In fact, the main appellants questioned the valuation of detained goods as recorded in para 6.11 of the impugned order. It is contended that the value of detained goods comes to ₹ 11 lakhs only. We note that there is no mention about seizure of goods and their provisional release, execution of bond, etc. In fact, it appears that the goods were already being put to use during the detention itself and they are not available for confiscation and consequent imposition of fine. We find that there is no specific finding regarding seizure of the goods and whether the said goods were available at the time of ordering confiscation. 14. In view of the above discussion, we find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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