2017 (10) TMI 1021 - AT - Central Excise

Change of opinion - Whether Show Cause Notice was rightly issued on the same set of facts and disclosures made to the revenue, for change of opinion, and whether the demand raised against the appellant is sustainable? Held that - It is evident from the record that the appellant after fabricating the machinery had installed the same in their old units, at Sector 57, Noida and thereafter under proper permission which was granted after due verification by the Central Excise Authority, shifted the machinery to the new plant at Greater Noida without payment of duty as permissible under the scheme of the Act and the Rules - the finished products of both the units, the Unit, Sector 57, Noida & the new Unit at Udyog Vihar Industrial Area, Greater Noida are excisable. Thus, if any duty is paid by the Unit-I on removal of machinery, fabricated in their premises, the credit for the same is available to the new Unit under the same management. Appeal allowed - decided in favor of appellant.

Issues:
- Whether Show Cause Notice was rightly issued for change of opinion based on the same set of facts and disclosures made to the revenue.
- Whether the demand raised against the appellant is sustainable.
- Whether the benefit of Notification No.67/95 dated 16/03/1995 was rightly availed by the appellant.

Analysis:
1. Change of Opinion in Show Cause Notice:
The main issue in this appeal was whether the Show Cause Notice was validly issued based on a change of opinion regarding the same set of facts and disclosures made to the revenue. The Tribunal noted that the appellant had shifted machinery from their old unit to a new unit after proper permission was granted by the Central Excise Authority. The Show Cause Notice was issued almost a year later, alleging duty evasion. However, the Tribunal found that no new facts were presented, and the machinery was shifted under permissible rules without duty payment, making the exercise revenue neutral. Therefore, the Tribunal held that the Show Cause Notice was not tenable, and the appeal was allowed.

2. Sustainability of Demand:
The demand raised against the appellant was based on allegations of deliberate misdeclaration to evade duty payment. The department alleged that machinery was not used in production in the old unit before being transferred to the new unit, contrary to the appellant's assertions. The Adjudicating Authority confirmed the demand and imposed penalties. However, the Tribunal, after analyzing the facts, found that the machinery was shifted with proper permission and that duty payment, if any, by the old unit would be creditable to the new unit under the same management. As the exercise was revenue neutral, the Tribunal held that the demand was not sustainable and set aside the impugned order.

3. Availment of Notification No.67/95 Benefit:
The appellant had availed the benefit of Notification No.67/95 dated 16/03/1995 for transferring machinery between their units. However, the department alleged that this benefit was wrongly availed as the machinery was not installed and used in the manufacture of finished goods in the old unit. The Adjudicating Authority upheld this allegation. Nevertheless, the Tribunal, upon review, found that the machinery was shifted as per permissible rules and that any duty paid by the old unit would be creditable to the new unit. Therefore, the Tribunal concluded that the benefit of the said Notification was rightly availed by the appellant, and the demand based on its alleged misuse was not sustainable.

In conclusion, the Tribunal allowed the appeal, set aside the impugned order, and held that the appellant was entitled to consequential benefits in accordance with the law. The judgment emphasized the importance of following proper procedures and rules while transferring capital goods between units to ensure compliance with excise regulations and avoid allegations of duty evasion.

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