2017 (5) TMI 1532 - AT - Central Excise

Manufacturer or trader - appellant s plea was that it was the trader of the computer parts, Revenue discarded such plea on the basis of oral evidence of the partner as well as the engineer of the appellant firm who stated that the appellant was engaged in the manufacture of computer - Held that - Evidence gathered by the Revenue from the partners of the appellant as well as the engineer of the appellant and the buyers of the computer supplied by appellant unerringly proved that the appellant was engaged in manufacture of computer without being the trader of the said goods - appeal dismissed - decided against appellant.

Summary

Issues:
Determining whether the appellant was a manufacturer or a trader of computer parts, admissibility of evidence from buyers, proper application of excise duty regulations.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the nature of the appellant's business - whether they were a manufacturer or a trader of computer parts. The appellant claimed to be a trader, but the Revenue argued otherwise based on oral evidence from the partner and engineer of the appellant firm. The Revenue contended that the appellant was engaged in the manufacture of computers, not merely trading computer parts. The Tribunal noted that invoices were manipulated to give the impression of trading, but evidence suggested manufacturing activities. The Revenue highlighted that buyers confirmed purchasing computers from the appellant, supporting the conclusion that the appellant was a manufacturer. Consequently, the Tribunal upheld the decision that the appellant was liable to pay excise duty amounting to ?15,78,945.30.

Upon examining the grounds of appeal, the Tribunal found that the appellant failed to provide substantial evidence to support their claim of being a trader. The appellant's argument that the Revenue's conclusions were baseless lacked evidentiary backing. The Tribunal emphasized that the evidence gathered from the appellant's partners, engineer, and buyers unequivocally demonstrated the appellant's involvement in the manufacture of computers. The buyers' statements, confirming the purchase of computers from the appellant, were crucial in establishing the nature of the appellant's business. Importantly, the buyers were not cross-examined by the appellant during the adjudication process, further strengthening the Revenue's position.

In light of the evidence presented and the failure of the appellant to substantiate their claim of being a trader, the Tribunal dismissed the appeal. The decision underscored the importance of concrete evidence in establishing the nature of business activities, emphasizing the significance of buyer statements and the lack of rebuttal through cross-examination. The judgment served as a reminder of the need for clarity and consistency in business operations to avoid disputes over tax liabilities and regulatory compliance.