2010 (10) TMI 259 - AT - Central Excise

Duty liability - Manufacturer - M/s. Leuva Engineers is purchasing liquid metal on payment of duty from M/s. Kothi Steel Ltd., who were issuing excise invoice for the same. M/s. Leuva Engineers were purchasing other materials like sand, sodium silicate, mould boxes etc. from the open market. It was alleged by the Revenue that they themselves were carrying certain activities for the manufacture of unfinished steel castings in the premises of M/s. Kothi Steel Ltd. and after manufacture, the same were removed from the premises of M/s. Kothi Steel Ltd. to other premises for completing the process of grinding and finishing of the same. - Held that - The Revenue s allegations are neither clear nor proper. It stands rightly observed by Commissioner (Appeals) that even according to the Revenue s allegations, the duty liability cannot be fastened on M/s. Kothi Steel Ltd. in as much as the goods allegedly stand manufactured by M/s. Leuva Engineers. - Revenue s appeal dismissed.

Summary

Issues: Revenue's appeal against dropping of duty recovery by Commissioner (Appeals) regarding alleged manufacturing activities at a premises.

Analysis:
1. Manufacture of non alloy steel ingots and cast articles: The respondent was engaged in manufacturing non alloy steel ingots and cast articles. Central Excise Officers visited the factory and found the appellant was clearing non alloy steel ingots to clients and unfinished steel castings to another entity. Allegations were made regarding the manufacturing process at the premises of another company.

2. Initiation of proceedings: Revenue initiated proceedings against another company, proposing duty recovery. The duty was confirmed by the original adjudicating authority but later dropped by the Commissioner (Appeals) in the impugned order.

3. Decision of Commissioner (Appeals): The Commissioner (Appeals) noted the lack of corroborating evidence to support the Revenue's case. Even if the allegations were true, it was unclear how the company could be held liable for duty. Relying on Tribunal decisions, the duty demand was set aside.

4. Grounds of appeal by Revenue: The grounds of appeal raised by the Revenue were deemed self-contradictory. The Revenue alleged that the company was manufacturing unfinished castings at another premises, but also argued that the other company should be treated as the manufacturer. The Commissioner (Appeals) observed that duty liability could not be imposed on the company as per the Revenue's own allegations.

5. Final decision: After analyzing the arguments and evidence, the Tribunal found no merit in the Revenue's case. The appeal was rejected, affirming the decision of the Commissioner (Appeals) to set aside the duty demand. The judgment was pronounced in court by the Tribunal.