2015 (10) TMI 1313 - AT - Central Excise

Demand of establishment charges - 100% EOU - Held that - Issue arises from the facts whether the appellant is liable to pay establishment charges for the posting of Departmental Officer in their unit when they were not posted at all or not. The issue has been answered by this Tribunal in the case of Granada Footwear Pvt. Ltd. 2006 (5) TMI 38 - CESTAT, NEW DELHI and Nath Brothers Exim International Ltd. (2005 (6) TMI 141 - CESTAT, NEW DELHI) wherein this Tribunal held that when no officer has been posted in the unit of appellant no establishment charges is payable by the appellant. Therefore, following the precedent decisions of this Tribunal I hold that as no departmental officer was posted in the factory premises of appellant for supervision, establishment charges are not payable. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues: Appeal against the demand for establishment charges - Liability to pay establishment charges when no departmental officer was posted.

Analysis:
The appellant, a 100% EOU, appealed against an order demanding establishment charges of Rs. 13,19,539. The appellant had initially requested the removal of departmental officers from their premises, which was granted, allowing them to operate under self-removal procedure from a specified date. A show cause notice was later issued demanding establishment charges for a specific period. The appellant argued that as per the permission granted, no officer was posted in their premises, hence establishment charges were not payable. Both lower authorities upheld the demand, leading to the appeal.

The appellant contended that no departmental officer was posted in their factory for supervision after the permission was granted, therefore establishment charges were not due. Citing precedents, the appellant's counsel argued for setting aside the impugned order. On the other hand, the respondent argued that permission was granted for only one of the appellant's units, not both, and thus, establishment charges were justified. The appellant clarified that they had shifted their EOU to a different location after obtaining permission, consolidating their operations at one site, which was not considered by the authorities demanding the charges.

Upon hearing both parties and considering the submissions, the issue at hand was whether the appellant was liable to pay establishment charges when no departmental officer was posted at their unit. Referring to previous decisions, the Tribunal held that if no officer was posted at the appellant's premises, no establishment charges were payable. Relying on the precedents set by the Tribunal, the judgment favored the appellant, setting aside the impugned order and allowing the appeal with any consequential relief.

In conclusion, the Tribunal's decision was based on the absence of any departmental officer being posted at the appellant's factory premises for supervision, leading to the determination that establishment charges were not payable in this case.