Tata Motors Limited Vs Commissioner (CESTAT Kolkata)
The appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) concerned the confirmation of Central Excise duty demand of Rs.13,63,639/- for the period November 2015 to March 2017. The Adjudicating Authority confirmed the demand, and the Commissioner (Appeals) dismissed the appellant’s appeal on the ground that it had been filed with a delay of 8 days beyond the prescribed period.
The appellant submitted that the delay of eight days fell within the condonable period available to the Commissioner (Appeals) and should have been condoned. On merits, it was argued that the demand arose from denial of exemption under Notification No. 67/95, relating to goods manufactured and captively consumed within the factory. The disputed goods included trolleys, lifting tackles, trailers, cabinet work benches, racks, tables and similar items.
The appellant contended that the issue had already been decided in its favour by the Tribunal in Commissioner of Central Excise, Jamshedpur v. Tata Motors Ltd. [2010 (251) ELT 411 (Tri.-Kol.)]. It was further submitted that, for another period involving identical goods, the Commissioner (Appeals), through Order-in-Appeal No.586/JSR/2018 dated 19.12.2018, had also decided the matter in the appellant’s favour. According to the appellant, no further appeal had been filed against that order, demonstrating that the issue had attained finality. The appellant therefore requested the Tribunal to decide the appeal on merits instead of remanding the matter.
The Revenue argued that the appeal before the Commissioner (Appeals) had been filed without adequate explanation for the delay and that its dismissal was justified. Alternatively, it submitted that if the Tribunal considered the delay condonable, the matter should be remanded to the Commissioner (Appeals) for adjudication on merits.
The Tribunal observed that the delay before the Commissioner (Appeals) was only eight days and held that such delay ought to have been condoned. Accordingly, it condoned the delay.
On the substantive issue, the Tribunal found that the matter was squarely covered by its earlier decision in Commissioner of Central Excise, Jamshedpur v. Tata Motors Ltd. [2010 (251) ELT 411 (Tri.-Kol.)]. The earlier decision had examined shop floor equipment such as tool cabinets, pigeon hole cabinets, racks, die racks, work benches, tables and chargeman desks manufactured for captive use. It referred to an earlier CEGAT decision reported at 1988 (37) E.L.T. 432 (T), which held that specially designed industrial items used in works or factories were not classifiable as steel furniture. The Tribunal in that earlier case had held that such goods qualified as shop floor equipment used within the factory and that Chapter 94 was not excluded from the benefit of Notification No. 67/95. It had further held that the goods constituted capital goods used in or in relation to manufacture and were therefore entitled to the exemption.
The Tribunal also referred to Order-in-Appeal No.586/JSR/2018 dated 19.12.2018, wherein the Commissioner (Appeals) dealt with demands concerning Pallet Bin Container & Stand, Trolley, Lifting Tackle, Trailer and Cabinet Work Bench Rack & Table. That order recorded that the Kolkata Bench of CESTAT had already held the goods to be classifiable under Chapter 94 and eligible for the benefit of Notification No. 67/95 as shop floor equipment used in the factory. The Commissioner (Appeals) had observed that judicial discipline required following the Tribunal’s decision since it had neither been stayed nor set aside.
The Tribunal noted that the present proceedings related to a subsequent periodical notice involving the same issue. It held that both the earlier Tribunal decision and the subsequent Order-in-Appeal were directly applicable to the present dispute.
Accordingly, the Tribunal set aside the impugned order, allowed the appeal, and held that the appellant would be entitled to consequential relief, if any, as per law.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The Appellant is aggrieved by the confirmation of demand by the Adjudicating authority and affirmation of the same by the Commissioner(Appeals) vide the impugned order. The lower authorities have confirmed the demand of Excise Duty of Rs.13,63,639/- for the period of November 2015 to March 2017.
2. The Ld.Counsel, appearing on behalf of the Appellant submits that the Commissioner(Appeals) has dismissed their Appeal before him on the ground that it was filed after 60(sixty) days with a delay of 8(eight) days. She submits that the delay of 8(eight) days is within the condonable power granted to the Commissioner(Appeals). Accordingly, she prays that this delay may be condoned.
3. She further submits that the issue lies in a narrow compass. The demand has been raised by denying the benefit of exemption granted under Notification No.67/95 available for goods manufactured and captively consumed. She submits that the demand is towards items like Trolley, Lifting tackle, Trailer and cabinet work bench, rack, table etc. The same issue was before the Tribunal in respect of the present Appellant which stands decided in their favour as reported as Commissioner of Central Excise, Jamshedpur v. Tata Motors Ltd. [2010 (251) ELT 411 (Tri.-Kol.)]. She submits that another periodical demand was made in respect of same items which came to be decided by the Commissioner(Appeals) vide Order-in-Appeal No.586/JSR/2018 dated 19.12.2018. She draws our attention to Para 2 of page No.1 and 2 of this order wherein it can be seen that the goods in question in that Appeal were identical to the goods in the present Appeal. No further Appeal was filed by the Revenue against this Order-in-Appeal dated 19.01.2018. Therefore, this shows that the issue has reached finality. In view of these submissions, she prays that the Appeal itself may be taken up by the Tribunal and the same may be allowed.
4. The Ld.AR for the Revenue submits that the Appellant had filed the Appeal before the Commissioner(Appeals) with a delay without proper explanation towards such delay. Therefore, he justifies the dismissal of the Appeal by the Commissioner(Appeals). He further submits that if the Tribunal takes the view that the delay is condonable, he prays that the Appeal may be remanded to the Commissioner(Appeals) to decide the issue on merits.
5. Heard the parties, perused the appeal papers and considered the submissions made by both the sides.
6. We find that the delay before the Commissioner(Appeals) was only to the extent of 8(eight) days, therefore, we hold that the Commissioner(Appeals) should have condoned the same. Therefore we codone the delay.
7. We also find that the issue is squarely covered in favour of the Appellant. Identical issue had arisen in the case of the Appellant which has been decided by this Bench in the case of Commissioner of Central Excise, Jamshedpur v. Tata Motors Ltd., cited supra. Relevant paragraphs of the said decision are reproduced below :
“2. …………………
The Lower Authority has not disputed the above features. From the records it appears that there are 26 tailor made products for facilitating shop floor operations. These are categorized as
(i) Different types of tool cabinet made of steel.
(ii) Different types and sizes of pigeon hole cabinet made of steel.
(iii) Different types of racks made of steel.
(iv) Different types of Die racks made of steel.
(v) Different types of workbench and tables made of steel.
(vi) Chargeman desk made of Steel.
The above items are used only for captive consumption. In an identical case of the Appellant the Hon‟ble CEGAT Special Bench – 1988(37) E.L.T. 432 (T) held as follows :
“Steel furniture, Steel cabinets, Steel tables, Steel benches, Steel racks and Steel tool holders, not meant for use or decoration in dwelling houses, place of business or public or private buildings but specially designed for use in works, and heavier in weight, made of thicker metal and costlier, not qualifying to be classified as Steel furniture under Item 40 of the Central Excise Tariff (Order per : G. Sankaran, Senior Vice-President and K. Prakash Anand, Member(T)]”.
Hence I am also inclined to take the view that the items in dispute cannot be called as „Steel furniture‟. The items certainly qualify only as „shop floor equipments‟ to be used in factories/workshops. In view of the above the impugned order is not sustainable on merits and is set aside. Appeal allowed.”
3. Contention of the Revenue is that items in question are „Shop Floor Equipments‟ to be used in the factory of production. The contention of the Revenue is also that the benefit of Notification No. 67/95-C.E., dated 16-3-95 is not available to the goods in question, as the Notification stipulates that the specified capital goods and inputs manufactured in a factory are exempted when used within the factory of production in or in relation to the manufacture of final specified products. The contention of the Revenue is also that the goods in question are basically storage devices and have no nexus of being used in or in relation to the manufacture of final products.
4. I find that the Notification exempts the specified capital goods manufactured in the factory of production. The goods are classifiable under Chapter 94 of the Tariff, which is not disputed by the Revenue and this Chapter is not excluded from the benefit of the Notification. The definition, „Capital Goods‟, during the relevant period, includes plant, machine or machinery used in or in relation to the manufacture and processing of the goods. The definition also includes parts, accessories and components of the plant, machine, machinery etc.
These item in question are „Shop Floor Equipment‘ which is used in the factory of production in or in relation to the manufacture of final product. In view of this, I find no infirmity in the impugned Order. The Appeal is dismissed. The Cross Objection filed by the Respondent also stands disposed off in the same terms.”
8. After this, on account of one more periodical proceedings, the matter reached the Commissioner(Appeals). Vide Order-in-Appeal No.586/JSR/2018 dated 19.12.2018, the Commissioner(Appeals) has held as under :-
“2. The above-named appellant has appealed against the Order-in-Original No. mentioned above (the impugned Order) wherein the ld. adjudicator has confirmed the demands, with interest, of Central Excise duty aggregating to Rs.26,43,801/- which were proposed vide five demand cum show cause notices (SCNs), all of which had alleged that the appellant had manufactured (i) Pallet Bin Container & Stand (ii) Trolley (iii) Lifting Tackle and (iv) Trailer and Cabinet Work Bench Rack & Table (the said goods) and had captively consumed them, without duty payment, under Notification No.67/95-CE dated 16/03/95 by wrongly classifying the said goods under Chapters 73, 84, 85 and 87 of CETA, 1985 though they appeared to be classifiable under Chapter 73/94 ibid and duty was payable on the said goods because they were neither inputs nor capital goods.
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7. It is seen that in a similar issue of the appellant, Hon‘ble CESTAT, Kolkata, while dismissing the Department‘s appeal against Order-in-Appeal No.53/JSR/2009 dated 30/04/09, vide its Order No.A-660/KOL/2009 dated 27/10/09, had held that the said goods are classifiable under Chapter 94 of the Tariff which is not disputed by the Revenue and this Chapter is not excluded from the benefit of the said Notification. It had also held that the items in question are Shop Floor Equipment which are used in the factory.
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9. I am bound by judicial discipline in this issue. Hon‘ble CESTAT, Kolkata‘s Order mentioned above is still in force as no stay order exists against it nor has it been set aside by any order. Thus, notwithstanding the fact that the Department had to withdraw its appeal because of the prescribed monetary limit, as of now, the Hon‘ble CESTAT, Kolkata‘s said Order still prevails and the issue stands determined in the appellant‘s favour vide the said Order. Accordingly, I must follow the same.”
9. Finding that the present proceedings are on account of subsequent periodical notice, we hold that the decided case law and Commissioner(Appeals)’s order is squarely applicable.
10. Accordingly, we set aside the impugned order and allow the Appeal. The Appellant would be eligible for consequential relief, if any, as per law.
