2008 (11) TMI 500 - AT - Central Excise

Summary

Issues:
1. Duty payment on final products clearance
2. Clubbing of clearances of different units
3. Activity classification as manufacture
4. Imposition of penalties and interest
5. Appeal against Commissioner's order

Analysis:
1. The appeals were filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Customs, Central Excise & Service Tax. The Revenue alleged that the final products, "System Furniture and Work Stations," were cleared by the Respondents without payment of duty.

2. The Revenue contended that the clearances of M/s. B. K. Office Needs (P) Ltd. should have been clubbed with the clearances of two other units, M/s. Tab Top Steel Industries and M/s. Fab Craft Industries. The lower authority confirmed a demand for Central Excise duty for the period from 1997-98 to 1999-2000, imposing penalties and interest. A personal penalty was also imposed on the Managing Director of M/s. B.K. Office Needs (P) Ltd.

3. The Commissioner (Appeals) overturned the lower authority's decision, stating that the activity of the Respondents did not amount to manufacture. Additionally, the Commissioner found that the clearances of the three units did not need to be clubbed due to the absence of financial flow back. The Revenue challenged the Commissioner's order, arguing that the Respondents did engage in manufacturing activities.

4. Upon review, the Tribunal noted that the Revenue did not contest the Commissioner's decision regarding the clubbing of clearances of the other two units. Even if the Respondents' activity amounted to manufacture, it was within the Small Scale Industries (SSI) exemption limit. Moreover, no show cause notice was issued to the other two units for clubbing clearances. Consequently, the Tribunal found procedural defects in the Revenue's appeals and upheld the Commissioner's order, dismissing the Revenue's appeals.

5. In conclusion, the Tribunal dismissed the Revenue's appeals, emphasizing the lack of infirmity in the Commissioner (Appeals) order. The judgment highlighted procedural shortcomings and the absence of grounds for challenging the clubbing of clearances, ultimately leading to the dismissal of the Revenue's appeals.