2015 (12) TMI 1585 - AT - Central Excise

Demand - whether the appellant was engaged in the manufacture of canopies has to be addressed by the nature of process undertaken by the appellant - Held that - The documentary evidences in respect of all the canopies procured by the appellant either from job worker or by purchase indicated that the impugned goods were obtained by the appellants from these sources - In the absence of any supporting evidence adduced by the Revenue to establish any manufacture of impugned goods by the appellant at their Delhi unit prior to July, 2000 and taking into consideration the evidences submitted by the appellants regarding purchase of capital machinery and electricity consumption during the year 2000 - Decided in favor of the assessee.

Summary

Issues:
- Duty liability on canopies manufactured and cleared by the main appellant.
- Whether the main appellant had a manufacturing facility for canopies prior to July 2000.
- Applicability of Central Excise duty on canopies procured from job workers or vendors.
- Allegations against the main appellant and two individuals regarding non-payment of duty.
- Abatement of the case against one individual due to their demise.

Analysis:
1. Duty Liability on Canopies:
The Revenue claimed that the main appellant manufactured and cleared canopies without paying Central Excise duty from April 1999 onwards. The main appellant argued that they only established a manufacturing facility in July 2000 and registered with the Central Excise Department. They accepted duty liability from July 2000 to September 2000 but contended that before July 2000, canopies were procured from vendors or job workers, absolving them of duty liability.

2. Manufacturing Facility Existence:
The main appellant emphasized that they lacked a canopy manufacturing facility in New Delhi before July 2000. They provided detailed evidence of machinery purchases and electricity consumption patterns pre and post-July 2000 to support their claim. The tribunal found no substantial evidence to prove the department's assertion that the main appellant manufactured canopies before July 2000.

3. Central Excise Duty Applicability:
The tribunal concluded that the main appellant was not engaged in manufacturing canopies before July 2000. They procured canopies from job workers or vendors, and activities like refitting and painting were related to gensets, not canopy manufacturing. The tribunal highlighted that the goods procured were specifically described as acoustic canopies for DG sets, and there was no evidence of manufacturing at the Delhi unit before July 2000.

4. Allegations and Penalties:
The tribunal set aside the penalties imposed on the main appellant and one individual due to the lack of evidence supporting duty liability before July 2000. The case against the other individual abated following their demise. The tribunal upheld duty payment for canopies manufactured and cleared between July 2000 and September 2000, while rejecting the demand for the period before July 2000.

In conclusion, the tribunal ruled in favor of the main appellant, stating that they were not liable to pay Central Excise duty for canopies manufactured before July 2000. The decision highlighted the lack of concrete evidence supporting the department's claims and emphasized the importance of examining the nature of the manufacturing process to determine duty liability accurately.