TMI Blog2019 (2) TMI 1486X X X X Extracts X X X X X X X X Extracts X X X X ..... 8502, and excisable as they have paid certain excise duty on the same, they should not have any grievance with the order of Commissioner up-holding everything as declared in their invoice and clearance documents. Demand of interest made under Section 11A - Held that:- Since the differential duty in the present case became payable on determination made by Commissioner under Section 11A (2) the demand of interest is justified. Time limitation - Held that:- In this case the demand for payment of differential duty has been made within period of one year from the date of filing the returns i.e. 06.04.2000 for the clearance made vide invoice dated 1.3.2000 - the demand is not barred by limitation. Appeal dismissed - decided against appellant. - E/405/2009-DB - Final Order No. 20200/2019 - Dated:- 25-2-2019 - SHRI S.S GARG, JUDICIAL MEMBER And SHRI SANJIV SRIVASTAVA, TECHNICAL MEMBER Mr. M.S. Nagaraja, Advocate For the Appellant Dr. J. Harish, Jt. Commissioner (AR) For the Respondent ORDER Per: SANJIV SRIVASTAVA The appeal is directed against order in original No 02/CCE/09 dated 30.01.2009/ 05.02.2009 of the Commissioner of Central Excise Mysore. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emanded and recovered from them under Section 11A of The Central Excise Act, 1944; (b) a penalty should not be imposed on them under Rule 173Q(1) of the Central Excise Rules, 1944. 2.6 The show cause notice was adjudicated by the commissioner as per his order in original referred in para 1, supra. 2.7 Aggrieved Appellant filed an appeal before the Tribunal which was then dismissed by the Tribunal for want of clearance to pursue the matter in Tribunal from the Committee of Disputes. Accordingly, appellants deposited the differential duty demanded along with the interest payable. 2.8 After the requirement of seeking clearance from Committee of Disputes was done away with as per the order Apex Court in case ECIL [2011 (265) ELT 11 (SC)], the order dismissing the appeal filed was recalled and the appeal restored to its original number. 3.1 In their appeal appellants have assailed the order of Commissioner stating- (a) The 6 MW DG set installed in the factory as captive power plant was not goods attracting levy of excise duty. (b) Department itself has taken stand before audit that the captive power plant was immovable property {Letter C No IV/1/73/2000 Audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack. iii. From the above it is clearly established that what was offer for sale was not D G Set but Items of 6 MW DG Set as per tender for a total value of ₹ 5.30 crores. iv. Since they had earlier taken the MODVAT Credit on the purchase of the various components listed in para 15 of the impugned order, they cleared the same as per the provision of Rule 57S(2)(b) after reversing the MODVAT Credit on depreciated value. v. No duty could have been demanded on the Power Plant/ DG Set assembled at site as it do not answer the test of marketability and manufacture. vi. Department has itself taken the stand before the audit that the DG Set was erected and embedded to earth and hence was not goods and hence not dutiable. vii. The order demanding duty on D G Sets is contrary to the authorities indicated in para 3 (i)(d), supra. viii. Order is clearly beyond the show cause notice as the differential duty as per the show cause notice is calculated at the rate of 10% of Capitalized Value of D G Set and duty paid by them at the time of clearance of gods. Whereas Commissioner is demanding the duty @ 16% of the value adopted by them at the time of clearance of goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural corollary to short payment of duty and hence demand of interest cannot be said to beyond the show cause notice. 5.1 We have considered the impugned order, submissions made in appeal and during the course of hearing. 5.2 To better appreciate the issues involved in the matter we reproduce para 14 15 of the impugned order- 14. I have considered the submissions very carefully. Coming to the first argument that the DG sets are immovable property and hence, they cannot be considered as excisable goods liable for payment of duty needs to be considered in the facts and circumstances of the case. The Central Excise Tariff specifies Electric generating sets and Rotary converters under Chapter Heading NO.85.02; therefore, they are excisable goods. In the instant case, the assessee has sold the DG set to M/s. Jindal Strips Limited, Delhi Road, Hisar, Haryana vide Invoice No.137 dt.1.3.2000. In the said invoice, the description of the goods is given as items of 6 MW DG Set . Further, in the said invoice issued under Rule 52A, the classification of the goods is shown as Heading No.85.02; the assessee has indicated the excise duty @ 8% amounting to ₹ 24,91,862/-. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result in an immovable property and hence they cannot be considered as excisable goods. In the present case, the goods have been sold and delivered. In fact, the tender conditions stipulate that the sale is on as is where is and no compliant basis and the delivery of the goods shall be effected 'IN SITU'. The goods sold would he removed by the buyer from the site after dismantling, wherever required, within 120 days from the date of sale order. Merely because the goods were removed in SKID or CKD condition for facilitating transportation, it does not mean that the goods sold are not DO Sets but they are something else. Further the assessee's argument that the department had taken the stand before AG's audit that the goods were not excisable and hence cannot demand duty now has no relevance. Whatever stand the department takes before audit or anybody else is purely an internal matter and that cannot in any way affect the adjudication proceedings or the decision of the adjudicating authority. No fetters can be cast/put on the adjudicating authority on the basis of extraneous and irrelevant considerations and hence this argument is rejected in limine. It would be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, then the said rule permits deduction @ 2.5% of credit taken for each quarter of a year of use or part thereof. In other words, these provisions would apply when the capital goods on which credit has been taken are cleared as such. In the instant case, what has been cleared by the assessee, as evidenced from, the document on record is a 6 MW DG Set Falling under Heading No. 85.02. But, it is not on DG set on which credit has been taken by the assessee. The credit has been taken by the assessee on various components and parts used in the manufacture of DC Set. These components and parts as evidenced from the documents/ central excise invoices on record fall under various headings of the Central Excise Tariff as detailed below:- Sl. No. Supplier s Name Invoice No. Date Central Excise Tariff Heading 1. M/s. Wartsila Diesel India Ltd. 22/20.09.94 8408.00 2. 29/24.10.94 8409.00 3. 35/30.11.94 8483.00 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Switchgears Controls (P) Ltd. 63/12.02.95 8537.00 25. M/s. Thermopads (P) Ltd. 262/19.02.95 8516.00 26. Patny Systems (P) Ltd. 126/18.02.95 7216.80 Central Excise duty has been discharged on these components and parts under these headings. These parts and components have been used in the manufacture and assembly of DG Set and once DG Set is formed, the components and parts do not have any separate identity. These are not the items which has been cleared vide an invoice No.] 37 dated 01.03.2000 and what has been removed vide the said invoice is DG set falling under heading No. 85.02 of the Central Excise Tariff. Therefore, the provisions of rule 57S(2)(b) does not apply to the situation at all and duty liability should have been discharged oil the goods under clearance, namely, DG Set falling under Heading No. 85.02 at the rate applicable for such goods at the relevant time. The rate of duty applicable on the DG Set cleared for home consumption was 16% Adv. The sale value as evidenced in the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to penalty under Rule 173Q(1) of Central Excise Rules, 1944. From the said para it is quite evident that the duty has been demanded on the clearance of goods from the premises of the appellants and not on the act of erection of the D G Set in their premises. It is thus evident that demand of duty is not in respect of D G Set erected at the site, which becomes immovable property, which in terms of the catena of judgments referred to by the appellants is not excisable. Since no duty has been demanded on the D G Set which was immovable property the decision relied upon by the Appellants are not applicable in the present case. 5.5 Para 4 (vii) of Order No 58/1/2002-CX dated 15.01.2002 relied upon by the appellants read as follows: (vii) When the final product is considered as immovable and hence not excisable goods, the same product in CKD or unassembled form will also not be dutiable as a whole by applying Rule 2(a) of the Rules of Interpretation of the Central Excise Tariff. However, components, inputs and parts which are specified excisable products will remain dutiable as such identifiable goods at the time of their clearance from the factory or warehouse. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction or direction as the case may be, no interest shall be payable and in other cases the interest shall be payable on the whole of the amount, including the amount already paid. (2) The provisions of sub-section (1) shall not apply to cases where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. Since the differential duty in the present case became payable on determination made by Commissioner under Section 11A (2) the demand of interest is justified. 5.8 In this case the demand for payment of differential duty has been made within period of one year from the date of filing the returns i.e. 06.04.2000 for the clearance made vide invoice dated 1.3.2000. Commissioner has in the impugned order held as follows: 16. The assessee has put forth another argument that the demand is time barred. The basis for this argument is that the DG Set was assembled in 1995 and the demand on the DG set was made in 2011 and there is no allegation of any fraud, collusion, suppression of facts or willful misstatement etc. in the show-cause notice and hence, only the normal period would ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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