2018 (2) TMI 542 - AT - Central Excise

Demand of differential duty - it was alleged that they have cleared parts of different machineries and not the complete machinery hence liable to pay duty @ 15% Adv. as the same is not complete Sugar Mill Machinery - Held that - in order to settle the controversy the detailed examination of purchase order and the nature of goods has to be made into so as to decide the classification of the goods and the duty applicable thereon - Since the relevant records has to be scrutinized, it is appropriate to remand the case back to the adjudicating authority who shall carry out the detail scrutiny of the relevant records and documents and shall decide the classification of the goods and applicable duty on the goods involved - appeal allowed by way of remand.

Summary

Issues:
1. Appeal against demand of duty and penalty by M/s Kay Iron Works Pvt. Ltd.
2. Appeal by revenue against setting aside of demand.

Analysis:
1. The appeals were filed by M/s Kay Iron Works Pvt. Ltd. (M/s KIWP) and the revenue against the Order-in-appeal passed by the Commissioner (Appeals). M/s KIWP appealed against the demand of duty amounting to ?2,80,736 and penalty, while the revenue appealed against the setting aside of the demand of ?8,62,863.

2. M/s KIWP, engaged in manufacturing goods under specific chapters of the Central Excise Tariff Act, cleared various goods treating them as Sugar Mill Machinery and paying duty at 10% Adv. The dispute arose when it was alleged that they had cleared parts of different machineries and not complete machinery, making them liable to pay duty at 15% Adv. The Commissioner (Appeals) set aside the demand of ?8,62,863 but upheld the demand of ?2,80,736 along with a penalty of ?5,000. M/s KIWP contended that the machinery was cleared in a knocked down condition, falling under the category of complete machinery as per the General Explanatory notes.

3. The advocate for M/s KIWP argued that the demand was wrongly confirmed as the machinery cleared by them constituted complete machinery, citing the General Explanatory notes. They also requested consideration of their cross objection against the revenue appeal to set aside the demands.

4. On the other hand, the revenue representative reiterated the points made in the Order-in-original, claiming that the demand was wrongly dropped. They argued that certain clearances were of parts of machinery and not complete machinery, hence duty demands were sustainable. Detailed arguments were presented regarding specific clearances to various entities, highlighting discrepancies in the supplied machinery and the duty demands.

5. After considering the submissions, the Tribunal decided to remand the case back to the adjudicating authority for detailed scrutiny of relevant records and documents to determine the classification of goods and applicable duty. The Appellant was given the opportunity to produce relevant material before the adjudicating authority, ensuring a fair hearing. The case was remanded for a fresh examination and appropriate orders to be passed.

6. The appeals were disposed of accordingly, with the cross-objection also being addressed. The decision was pronounced in court, concluding the legal proceedings.