2017 (11) TMI 1962 - AT - Central Excise

Levy of Excise Duty - base tank - marketable commodity or not - HELD THAT - It is evident that the appellant was engaged in the manufacturing of the transformers. It also manufactured the base tank, for other company who is also supplied the transformers, on the basis of job work. It cannot be agreed that it has not marketable value - the base tanks has the marketable value and is a product which attracts the excise duty, as per the reasons mentioned by the original authority in its order - the order passed by the lower authority in this regard, need not be interfered. CENVAT Credit - input - input procured from M/s Dewas Contractor - HELD THAT - During investigation, it was found that M/s Dewas Contractor was not in the existence so, the claim was denied by the Department - When the payment is made through the cheque then the existence of the firm cannot be denied. Matter remanded to the original authority to decide this issue (regarding the Cenvat credit) de novo but by providing a reasonable opportunity to the appellant - appeal allowed by way of remand.

Summary

Issues:
1. Liability of excise duty on manufacturing base tank for another company.
2. Denial of Cenvat credit due to non-existence of the contractor.

Analysis:

Issue 1:
The appellant, engaged in manufacturing transformers and base tanks, contested the excise duty demand on the base tank supplied to another company for transformer manufacturing. The appellant argued that the base tank, being non-marketable, should not attract duty. The Commissioner (Appeals) had already discussed this argument and rejected it. The Tribunal upheld the original authority's decision, stating that the base tank indeed had marketable value and was subject to excise duty, as per the reasons given in the order. Therefore, the appeal on this issue was dismissed.

Issue 2:
The second grievance of the appellant concerned the denial of Cenvat credit due to the non-existence of the contractor, M/s Dewas Contractor, from whom the input was procured. The appellant contended that all payments were made through cheques, and entries were duly recorded in the stock register, indicating the existence of the firm. The Tribunal found merit in this argument and modified the impugned order. The matter was remanded to the original authority for a fresh decision, allowing the appellant a reasonable opportunity. The Tribunal also permitted the admission of fresh evidence if necessary. Consequently, the appeal was partly allowed on this issue.

In conclusion, the Tribunal upheld the liability of excise duty on the base tank manufactured for another company but allowed the appeal partially regarding the denial of Cenvat credit, remanding the matter for further consideration.