2007 (1) TMI 393 - AT - Central Excise

Summary

Issues:
1. Appeal against order-in-appeal confirming demand and imposing penalty.
2. Classification of charges as trial charges or job work charges.
3. Liability to pay Central Excise duty on job work charges.
4. Barred by limitation on the ground of bona fide belief.

Analysis:
The appellant filed an appeal against the order-in-appeal confirming a demand of Rs. 2,09,111/- and an equal amount of penalty imposed by the Commissioner (Appeals). The demand was confirmed after considering goods processed by the appellant, termed as mould trial charges in their records. The appellant argued that they were only charging for trial charges, not liable for excise duty, as small manufacturers sent moulds and dies for trials without installing injection moulding machines. The Revenue contended that the appellant processed goods on behalf of other manufacturers, clearing them along with moulds and dies for consideration, thus liable for Central Excise duty on job work charges.

The appellant maintained that they believed the charges were for trials, not job work, and claimed the demand was time-barred due to bona fide belief. The Tribunal noted that the appellant did receive moulds and dies along with raw material from other manufacturers, processed them, and cleared the goods to the suppliers. Consequently, the Tribunal agreed with the Revenue that the charges were indeed job work charges, confirming the demand. However, the Tribunal found no penalty applicable as the appellant consistently treated and invoiced the charges as trial charges, reflecting them as such in statutory records. Therefore, the appeal was disposed of without penalty.

In conclusion, the Tribunal upheld the demand on job work charges, rejecting the appellant's argument of trial charges. The decision highlighted the importance of consistent invoicing and record-keeping in determining the nature of charges for excise duty purposes. The Tribunal's ruling emphasized the distinction between trial charges and job work charges based on the actual processing and clearance of goods, ultimately resolving the appeal in favor of the Revenue while dismissing the penalty claim due to the appellant's consistent billing practices and record maintenance.