2017 (11) TMI 866 - AT - Central Excise

Manufacture - interpretation of statue - validity of SCN - Held that - the impugned Order-in-Original did not give any categorical finding of the six components which were directed to be examined by this Tribunal whether to have been cleared from their manufacturing unit - Shri Pathak has stated that the appellant were supplying some goods from trading warehouse and that blower air inlet and condenser was not cleared from the factory but they were supplied from their trading warehouse to M/s General Motors India Ltd. Therefore, the show cause notice was not issued with fullest consideration after examining all the facts and provisions of Rule 2(a) of said Rules of Interpretation as stated above were wrongly invoked for the issue of said show cause notice and for that reason the said show cause notices not sustainable and, therefore, the impugned Order-in-Original is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Challenge against Order-in-Original dated 05.02.2014 passed by Commissioner, Central Excise, Customs, and Service Tax, Noida.
2. Allegations of supplying car air conditioner parts instead of assemblies.
3. Interpretation of Circular No.666/57/2002-CX dated 25.09.2002 by CBEC.
4. Examination of components supplied by the appellant.
5. Compliance with remand directions and Final Orders.
6. Confirmation of demands and interest by the Original Authority.
7. Appellant's contentions regarding the show cause notice and components supplied.
8. Respondent's argument on the supply of essential characteristics.
9. Lack of categorical findings in the impugned Order-in-Original.
10. Issue of show cause notice without fullest consideration and examination of all facts.
11. Invocation of Rule 2(a) of Rules for interpretation of Central Excise Tariff Act, 1985.
12. Sustainability of the show cause notices.
13. Set aside of the impugned Order-in-Original and allowance of the appeal.

Analysis:

The appellant challenged the Order-in-Original dated 05.02.2014, alleging that they were wrongly accused of supplying car air conditioner parts instead of assemblies. The matter revolved around the interpretation of Circular No.666/57/2002-CX dated 25.09.2002 by CBEC, which specified essential components for classifying a product as an air conditioning machine. The Tribunal had previously remanded the case to the Original Authority for verification based on the Circular's criteria. The Original Authority confirmed the demands and interest, leading to the appellant's appeal.

During the hearing, the appellant's counsel argued that the components mentioned in the Circular were not manufactured by the appellant but supplied independently, indicating that what was cleared were parts of an air conditioner, not assembled units. The counsel highlighted discrepancies in the Original Authority's findings, suggesting a lack of clarity regarding the goods manufactured and traded by the appellant. On the other hand, the AR contended that all essential characteristics specified in the Circular were indeed supplied by the appellant.

After considering the arguments and examining the record, the Tribunal found that the impugned Order-in-Original lacked a categorical finding on the components supplied by the appellant. It was noted that the show cause notice was issued without full consideration, as some components were supplied from a trading warehouse, not the manufacturing unit. Consequently, the Tribunal ruled that the show cause notices were unsustainable, setting aside the impugned Order-in-Original and allowing the appeal. The appellant was granted consequential relief as per the law.

In conclusion, the Tribunal's decision centered on the proper examination of components supplied by the appellant, adherence to remand directions, and the validity of the show cause notices issued without thorough consideration, ultimately leading to the allowance of the appeal and setting aside of the impugned Order-in-Original.