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TMI Blog2019 (11) TMI 1615X X X X Extracts X X X X X X X X Extracts X X X X ..... al Commissioner] in connection with the four show cause notices issued to the Appellant requiring them to show cause why the benefit of the exemption sought under a notification dated 10 June, 2003 should not be denied. 3. Excise Appeal No. 51337 of 2016 and Excise Appeal No. 51903 of 2016 have been filed to assail the order dated 4 February, 2016 passed by the Commissioner (Appeals) by which the order dated 16 April, 2015 passed by the Joint Commissioner, Central Excise, Dehradun [The Joint Commissioner] has been upheld and the Appeals have been dismissed. 4. It needs to be noted that both the Additional Commissioner and the Joint Commissioner have denied the benefit of an exemption granted under the Notification No. 50/2003-CE dated 10 June, 2003 [exemption notification] to the Appellants and have confirmed the demand of Central Excise duty with interest and penalty. It also needs to be noted that the Commissioner (Appeals) in the two Excise Appeals bearing Nos. 51337 of 2016 and 51903 of 2016 has relied upon the earlier order dated 25 February, 2015 and separate reasons have not been recorded. 5. An important condition mentioned in the exemption notification for a new indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Central Excise, as the case may be, with a copy to the Superintendent of Central Excise giving the following particulars, namely:- (a) name and address of the manufacturer; (b) location/locations of factory/factories; (c) description of inputs used in manufacture of specified goods; (d) description of the specified goods produced; (e) date on which option under this notification has been exercised. (ii) The manufacturer may, for the current financial year, submit his option in writing on or before the 30th day of November, 2003. 2. The exemption contained in this notification shall apply only to the following kinds of units, namely:- (a) new industrial units set up in areas mentioned in Annexure-II and Annexure-III, which have commenced commercial production on or after the 7th day of January, 2003 but not later than the 31st day of March, 2010; (b) industrial units existing before the 7th day of January, 2003 in areas mentioned in Annexure-II, but which have undertaken substantial expansion by way of increase in installed capacity by not less than twenty-five percent, on or after the 7th day of January, 2003, but have commenced commercial productio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) Service Grinding (01); (4) Sharper (01); (5) Drill Machine (01); (6) Grinder (01); (7) Milling Machine (01); (8) Lathe Machine (01); (9) Sheering Machine (01); (10) Vacuum Plate (01); (11) Power press (07). 11. All the above machines except the Power Press were found installed. The Power Press, however, was put into use only on 17 April, 2010 as was informed by Ram Swaroop Kalia. 12. A Panchnama was drawn in the presence of two independent witnesses. Statements of Ram Swaroop Kalia, Plant Incharge and Gopal Sharma, Human Resources Manager were also recorded under Section 14 of the Central Excise Act, 1944 [Excise Act]. The gist of the statement of Gopal Sharma is as follows : "(i) M/s Bentex Control & Switchgear Co., B-2 Khasra No. 10, Dev Bhoomi Industrial Estate, Village Bantakheri, Roorkee filed its declaration on 17.03.2010 to claim exemption from whole of Excise duty under Notification No. 50/2003-CE dated 10.06.2003. (ii) The unit is a partnership firm having 4 partners viz. namely Sh. Satish Chopra, Sh. Kapil Chopra, Sh. Rahul Chopra and Sh. Karan Chopra. (iii) The unit has been sanctioned 50 HP (70KW) power load from UPCL Roorkee. (iv) The unit filed the declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working on the date of visit. (iv) During course of visit of unit, it has been found that the cartoons in which finished goods packed were marked as SKN and manufactured at B-63 to 65/3, Naraina Indl. Area, Phase-2, New Delhi and some cartons were opened in the presence of factory representative and found that the specification plates were fixed on finished goods, which were marked as manufactured at B-63 to 65/3, Naraina Indl. Area, Phase-2, New Delhi. The photographs have been taken to strengthen the findings of the team A Panchnama in presence of two impendent witnesses was also drawn by the officers on spot to substantiate the above findings. A stated of Shri R.S. Kalia, Plant Incharge of above factory was also recorded. In the light of the above, it is apparent that M/s Bentex Control & Switchgear Co. B-2, Khasra No. 10, Dev Bhoomi Industrial Estate, Bentakheri, Roorkee, Distt. Haridwar do not qualify for the exemption under the Notification No. 50/2003 dated 10.6.2003, as claimed by them under the Declaration dated 17.03.10. You are, therefore directed to opt for the central excise registration and clear excisable goods on payment of appropriate Central Excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 under Section 14 of the Excise Act. The gist of the statement is as follows : "(i) Their manufacturing unit is situated at B-2 Khasra No. 10, Dev Bhoomi Industrial Estate, Roorkee and the office as well as registered office is at B-63 to 65/3, NIA, Phase-II, New Delhi-110028. (ii) Apart from above, they have their sister concern situated at B-63 to 65/3, NIA, Phase II, New Delhi-28. (iii) Both the unit have common partners namely- (i) Mr. Kapil Chopra (ii) Mr. Satish Chopra (iii) Mr. Rahul Chopra (iv) Mr. Karan Chopra All residing at 47, Anand Lok, New Delhi-110049. (iv) The declaration was filed on 17.03.2010. (v) The raw material used in manufacturing are Copper strips, CRC Sheets, Brass Sheet, PCB Meter Card, SM Counter, Meter Body Set, Current Transformers and Thermo Bio-metal Strips etc. and the final products are Motor Starter, KWH Meter, Miniature Circuit Breaker, Change Over Switches/main switches. (vi) Process flow chart will be provided within 3 days. (vii) The photo copies of the plant & machinery duly procured, will also be provided. (viii) Copies of the acknowledgement duly filed before DIC Roorkee as on 20.02.2008 have been provided. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 65/3 Naraina Industrial Area, Phase-II, New Delhi and some cartons were opened in presence of factory representative and found that the specification plates were fixed on finished goods which were marked as manufactured at B-63 to 65/3 Naraina Industrial Area, Phase-II, New Delhi thus trying to show that the packed goods were manufactured at Roorkee but originally were brought from their New Delhi unit and thus not fulfilling the basic condition as laid down under the said Notification regarding commercial production. (ii) The party vide its statement dated 18.04.10 admitted the fact that due to illiterate labour they have loaded SKN marked labels and carton marked B-63 to 65/3 Naraina Industrial Area, Phase-II, New Delhi-110028. The same labels were affixed on finished goods and packed in cartons by mistake. This shows that no production was actually carried out by the unit till 31.03.2010 and hence could not fulfill the condition as laid down under Notification No. 50/2003-CE dated 10.06.2003. (iii) The party filed its Declaration for the manufacture of Motor Starters, KWH Meter, Miniature Circuit Breakers; Change Over Switches/Main Switches whereas on verification as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on managers and the dispatch staff. Further the labour in a manufacturing unit manufacturing electrical items cannot be termed as an illiterate, they ought to be at least semi-skilled if not skilled. Moreover raw materials are kept in the stores, receipt and issue of the raw materials is carried out by the store keeper which can't be an illiterate person. After the issue and before putting in production line, raw materials are subjected to quality control check. Quality control check is also carried out before effecting clearance of the finished goods. This system is adopted in almost all the manufacturing units. A manufacturing unit engaged in manufacturing electrical goods such as motor starter, MCB & Change Over Switches must be having QC checks at number of stages. In such circumstances, it does not seem credible that such large quantity of the products had been affixed with wrong plates/packed in wrong cartons without having been noticed during the course of the manufacturing processes. Further the party have not controverted the allegation that the said goods had been found in ready-to-sale condition. Thus the state in which these goods were found in their factory clearly ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-installation of Power Press which was an essential machine for the production and so the goods could not have been produced at the Roorkee unit. 22. The adjudicating authority also found that all the show cause notices had been issued within time and the contention of the Appellant that penalty should not be imposed since it was bona fide omission could not be accepted as it was a well planned strategy designed by the Appellant with an intent to evade payment of duty. The benefit of cum duty was also not granted and nor the Appellant was found entitled to avail credit of duty paid on inputs and capital goods or credit of service tax. 23. As noticed above, the order dated 25 February, 2015 decided the four show cause notices. The other two show cause notices were decided by order dated 16 April, 2015. The four Appeals filed by the Appellant against the order dated 25 February, 2015 and the two Appeals filed by the Appellant against the order dated 16 April, 2015 were dismissed by the Commissioner (Appeals) by orders dated 25 February, 2015 and 4 February, 2016 respectively. The latter order dated 4 February, 2016 merely reiterates the findings recorded in the earlier order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the necessary conditions contained in the exemption notification; (ii) The Department failed to substantiate that the goods which were sold under the commercial invoices were not manufactured at the Roorkee unit; (iii) It had been explained by Ram Swaroop Kalia, Plant Head of the unit that Roorkee Unit was procuring the components and steel boxes from the Delhi unit and were joining these parts into the steel boxes and then packing them into cartons and, therefore, there was no requirement of using the Power Press Machine; (iv) The Appellant had employed workers and was paying electricity bill; (v) The benefit of the exemption notification could not have been denied to the Appellant merely because the Delhi address was mentioned in the packed cartons or on the labels fixed on the products as that was because of mistakes committed by the workers; (vi) It was necessary for the officers who went to the Roorkee unit for verification of the declaration made by the Appellant to have enquired from Gopal Sharma or Ram Swaroop Kalia about the presence of the raw material, but having failed to do so, the benefit of the exemption notification cannot be denied to the Appellant on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellant on 17 March, 2010 for claiming exemption from excise duty in terms of the exemption notification mentions that the Appellant intends to manufacture four items namely, Motor Starters, KWH Meters, Miniature Circuit Breakers and Change Over Switches. The Appellant, however, claims that it started commercial production of Motor Starters only prior to 31 March, 2010 and it did not start commercial production of KWH Meters. Miniature Circuit Breakers and Change Over Switches. 30. To claim the benefit of the exemption notification, it was imperative for the Appellant to have substantiated that the new industrial unit set up by the Appellant had commenced commercial production on or after 7 January, 2003 but not later than 31 March, 2010. The main submission of the Appellant to substantiate that the commercial production started before 31 March 2010 is issuance of the invoices on 19 March, 2010 and the courier receipts. According to the Appellant, this fact is sufficient to prove that the commercial production started prior to 19 March, 2010 because in that case the invoices would not have been issued on 19 March, 2010 and nor the goods could have been dispatched by couri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st important aspect, if the goods were actually manufactured at the Roorkee unit. 32. It was also necessary for the Appellant, as a manufacturing unit of electrical goods, to have maintained proper records regarding the manufacture of goods. But even after a period of one month from the date of production, the Appellant had no documents or registers to substantiate its claim about commercial production. If labours are engaged, it was imperative for the Appellant, in view of the statutory provision to have intimated the Employees State Insurance Corporation and others but such documents have not been produced. 33. If the Appellant was actually manufacturing the Motor Starters, it would have raw materials but no raw material was kept in the premises of the unit. The contention of learned Counsel for the Appellant is that it was for the visiting team to have enquired this fact from the two senior officers present in the unit at the time of inspection, but since no information was sought, the Appellate Authority was not justified in holding that no raw material was kept in the unit. The submission is that it was, therefore, not necessary for the two officers of the Appellant to point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 March, 2010. The Bench also noticed that the Appellant, apart from the invoices, had also submitted proof of receipt of goods. In the present case only invoices had been placed. The Appellant did not produce any document showing receipt of goods by the person in whose favour the invoices had been issued nor any document was filed to show receipt of money by the Appellant. 37. In East India Udyog Ltd., Sahibabad, Ghaziabad & Shri N.K. Lohia Versus Commissioner of Central Excise & Service Tax, Ghaziabad [2017 (8) TMI 583-CESTAT Allahabad], the Tribunal found that that all the transactions had been properly recorded in the books of accounts maintained in the ordinary course of business and the returns filed with the Department. Evidence had also been filed regarding delivery of the orders. 38. In S.K. Rasps & Files Pvt. Ltd. Versus Commissioner of Central Excise., Chandigarh-I [2015 (12) TMI 1619 - CESTAT Chandigarh], the Bench found that the Appellant had sold the goods against consideration. 39. These decisions do not help the Appellant for the simple reason that the Appellant could not substantiate its case that the goods sold through the invoices had actually been received by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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