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TMI Blog2023 (12) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... s.10,52,892/-; it is proposed to recover the said duty with interest and penalty. On adjudication, the proceedings initiated in the show-cause notice was dropped. Revenue filed an appeal before the learned Commissioner(Appeals), who after analyzing the evidences on record, set aside the order of the adjudicating authority and allowed the Revenue's appeal confirming the recovery of duty of Rs.10,52,892/- along with interest and imposed penalty of equal amount. Aggrieved by the said order, the appellant preferred an appeal before this Tribunal. The Tribunal by its order dt. 06/02/2018 dismissed the appeal filed by the appellant. Aggrieved by the said order, appellant approached the Hon'ble High Court of Kerala and by order dt. 28/06/2022, the Hon'ble High Court remanded the matter to the Tribunal for fresh consideration. Consequently, the matter is taken up for hearing and disposal. 3. Learned advocate for the appellant assailing the impugned order submitted as follows:- i. During the period 01/04/2000 to 24/06/2002, the appellant, to meet the requirements of the market needs for supply of acoustic enclosures, outsourced the same from manufacturers having infrastructure facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not lead to the conclusion that manufacture took place at the premises of the appellant. Stray cases are considered by the learned Commissioner(Appeals) where either owing to excessive demand of acoustic enclosures or where there were repeated defects in acoustic enclosures manufactured by the job workers, certain specific jobs were carried out at the appellant's premises. ix. Finding of aluminum scrap cannot lead to the conclusion that manufacture took place at the appellant's premises since such sheets were used in the manufacture of DG sets also. x. Stock statements given to the banks cannot be relied upon in confirming the demand. In support he placed reliance on the following judgments:- a. CCE Vs. Beekaylon Synthetics Ltd. [2003 taxmann.com 77 (New Delhi - CESTAT)] b. CCE, Vapi Vs. Synfab Sales [(2015) 57 taxmann.com 338(SC)] c. Coimbatore Spinning & Weaving Co. Ltd. Vs. CIT [95 ITR 375] xi. There was no testing of acoustic enclosure in the factory premises as the same are assembled only at the premises of the customers. xii. Drawing /sketches for bending and corrugation found in the appellant's premises should not lead to any adverse inference as the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of Acoustic Enclosure is maintained by the appellants. (vouchers for unloading charges) b. The raw materials received/accounted are sent to jobworkers for bending/corrugating from the factory of appellant and received back from the jobworkers into their factory. (vouchers of cash payment) c. Drawings/sketches for bending & corrugating supplied by the appellant, that has been prepared by their Works manager. d. Though it is contended that the goods are then sent to M/s SEW/SBN, there are no documents available/ submitted to prove that the goods have been sent to them. e. Manufacturing processes are carried in the premises of the appellant factory only. Consumption/ stock of Glasswool and Aluminium perforated sheets, used exclusively in the manufacture of AE are maintained by the appellant. (vouchers pertaining to Meals allowance bill, food bill, night allowance, Overtime bill) f. The job workers are not specialised in manufacture of Acoustic Enclosure as they do not manufacture the said item for anyone else; they do not have their own specific raw materials suppliers of quality; they do not have any skilled labourers for the said activity; all these proves that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were till then working in their factory to the new factory. This shows that the said employees were actually carrying out the said manufacturing activity in the appellant's unit. 4.2. Replying to their grounds, the learned Authorised Representative (AR) for the Revenue submitted as follows:- I. In the grounds of appeal, among others, the appellants have claimed that they have procured the raw materials in the name of jobworkers and had sent them for manufacture of Acoustic Enclosures and that they received the Acoustic Enclosure under invoice on payment of Sales Tax. They have claimed that they have not manufactured acoustic Enclosure and if at all the activity amounts to manufacture, it should be the jobworker who is liable to pay duty as manufacturer. II. In the grounds of appeal, they have stated that 'The said raw materials were never taken into the appellant's stock at any stage'. The said statement is very much far from truth, as during the investigation, the department has found a document declaring the material stock position by the appellants to M/s Dhanalakshmi Bank during the month of March 2002, April 2002 and May 2002. The appellant had shown stock of items/ raw m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer of the Acoustic Enclosure. Also, at para 26-38 of the show cause notice, the investigation has discussed all the pieces of evidences to prove that the manufacturing activities of Acoustic Enclosure have been carried out at factory premises of the appellant and hence the contention of the appellant that job workers are the manufacturers is not acceptable. V. The appellants have argued that the agreement entered into between the appellant and the job workers was one, which was on principal to principal basis and that the job worker was not a hired labourer. It is seen from the documents on record that the appellant has not produced any documentary evidences/ copy of the agreement to prove /support their claim of manufacture was on principal to principal basis. VI. It has been stated by Shri Jolly Francis, employee/labourer, who was working in the appellant unit that the acoustic enclosure used to be tested within the factory. Even when the said employee was cross examined ruing the adjudication proceedings, while answering the Question No. 6 during the cross examination, he has confirmed that the 'Acoustic Enclosures {assembled form} which are to be sent to distant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r manufacturers and cleared to the customers directly. 7.1. The allegation of the Revenue is that the appellant in the guise of getting the said acoustic enclosure manufactured on job work basis, but in fact the appellant manufactured the same in their factory premises and later supplied it to their customers to be fitted with the manufactured DG sets. 7.2. In support of the allegation that goods were manufactured in the factory premises of the appellant, the Revenue on the basis of statements recorded and evidences collected, it is claimed that the raw materials necessary for the fabrication of acoustic enclosures are procured by them in the name of M/s. SBN Engineering Works and M/s. Steel Engineering Works, but in fact the same were unloaded in the premises of the appellant and it is purchased by the appellant as payments were made by them and the raw materials were received by them. In support of the allegation that the raw materials were unloaded and accounted as stock in the premises of the appellant, the Revenue relied upon the procedure for the purchase of raw materials adopted by the appellant and maintained in their office. Also, vouchers indicating payment of unloading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures to the show-cause notice contain the documentary evidences in this regard. Further analyzing the payments made to the job workers brought on record that the amount paid ranging from Rs.660/- to Rs.1340/- being 3% of the total sales value cannot meet even 1/4 of the actual labour expenses involved in the fabrication of the acoustic enclosures. Thus, the claim of the appellant that the goods were manufactured on job work basis negated by the Revenue. No contrary evidence is placed by the appellant showing the amount collected is sufficient to meet the job-work charges and any costing of the manufacture of the same placed on record by the appellant. 10. Thus, the Revenue could be able to establish that even though the appellant claimed to have manufactured the acoustic enclosures on job work basis from M/s. SBN Engineering Works and M/s. Steel Engineering works, in fact the same were manufactured in their premises during the relevant period and cleared without payment of duty. The claim of the evidence from the stage of procurement of raw-materials, receipt in the factory, manufacture using their labour force adduced by the Department in the demand notice and confirmed in the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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