Case Law Details
Tansi Pump Unit Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Brief facts are that the appellants are registered as manufacturer of hand-pumps, EB line material, Benches, Desks etc. They availed small scale exemption under Notification No.8/2003-CE dt. 1.3.2003 and after crossing the exemption limit were clearing the products on payment of duty. Appellant also availed cenvat credit while paying duties on the finished product. On verification of records, it was found that appellant had converted steel scrap into angles and channels through job workers for which purpose they removed scrap under Rule 4 (5) (a) of Cenvat Credit Rules, 2004 to the job worker. The scrap so sent to the job worker was returned to the appellant as angles and channels. While so returning the goods to the appellant, the job worker discharged duty liability on angles and channels. The Department was of the view that the appellant ought to have paid duty on scrap while removing them to the job worker. Show cause notice 14.06.2012 was issued proposing inter alia to recover an amount of Rs.1,10,221/- as Central Excise duty on scrap removed to job worker for the period from September 2008 to February 2010, to demand interest thereon and for imposing penalty under Section 11AC of the Central Excise Act, 1944.
The issue to be considered is whether the appellant is liable to pay duty on the scrap that has been sent to the job workers for manufacture of intermediate products such as angles and channels. It is not disputed that removal of the scrap to the job worker was done as per Rule 4 (5) (a) of Cenvat Credit Rules, 2002. So also, it is not disputed that the job worker cleared intermediate goods in the nature of angles and channels to the appellant by paying duty and raising invoices.
CESTAT held that the demand cannot sustain and requires to be set aside which we hereby do. The show cause notice dated 14.06.2012 is issued invoking the extended period. It is not disputed that the appellant has accounted the removal of scrap to the job worker as well as the clearance of the intermediate goods (angles and channels) by payment of duty. The Department has vaguely alleged that the appellant has suppressed facts with intention to evade payment of duty. There is no evidence to show that the appellant has done any positive act to deliberately suppress the facts so as to evade payment of duty. The appellant therefore succeeds on the ground of limitation also. The impugned order is set aside on merits as well as on the ground of limitation. Appeal is allowed with consequential relief, if any, as per law.
FULL TEXT OF THE CESTAT CHENNAI ORDER
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