2018 (3) TMI 258 - AT - Central Excise

Classification of goods - green houses in ready to assemble condition - whether classified under CTH 9406 or under CTH 8424? - Held that - The tariff entry 9406 00 11 covers the green houses in ready to assemble sets. It stands established that the supply which has been made is for green houses in ready to assemble condition. Such goods are specifically covered under the above tariff heading - the goods cleared by the appellant are classifiable under 9406 00 11 as green houses in ready to assemble sets and liable for payment of excise duty during the period under dispute. Such Central Excise duty is required to be paid on the entire value of the green houses i.e. including the value of both the components fabricated in the factory as well as those procured from outside. However, the appellant will be entitled to the benefit of cenvat credit on goods procured from outside subject to verification of such entitlement on the basis of documents to be produced by the appellant. It is also fairly well settled that the total consideration received is to be considered as cum duty price and such benefit will be entitled to the appellant. The demand for Central Excise duty under 9406 made in the impugned order is upheld but with the modification that the appellant will be entitled to CENVAT credit subject to the verification of documents - appeal allowed in part.

Summary

Issues Involved:
1. Classification of goods manufactured and supplied by the appellant.
2. Eligibility for exemption under Notification No. 12/12-CE.
3. Time-barred demand.
4. Entitlement to cum duty price benefit and cenvat credit.

Issue-wise Detailed Analysis:

1. Classification of Goods:
The primary issue was whether the goods supplied by the appellant, specifically "green houses," should be classified under "pre-fabricated buildings" (Tariff Heading 94060011) or as parts of mechanical appliances used in agriculture or horticulture (Tariff Heading 84249000). The Department argued that the appellant supplied green houses in ready-to-assemble sets, classifiable under 94060011. The appellant contended that the goods were not ready-to-assemble units and should be classified under 94060019. The Tribunal, after examining the evidence, concluded that the goods were indeed green houses in ready-to-assemble sets and thus classifiable under 94060011.

2. Eligibility for Exemption under Notification No. 12/12-CE:
The appellant claimed exemption under Notification No. 12/12-CE, which applies to parts of mechanical appliances used in agriculture or horticulture. The Tribunal found that the goods fabricated in the factory, such as pipes and girders, did not merit classification under 8424. Consequently, the claim for exemption under this notification was without merit.

3. Time-barred Demand:
The appellant argued that the demand was time-barred as their unit had been regularly audited by the Department. The Department countered that only a test check of documents is conducted during audits, which cannot be a basis for claiming that the demand is time-barred. The Tribunal did not explicitly address the time-barred issue in its final decision, focusing instead on the classification and duty liability.

4. Entitlement to Cum Duty Price Benefit and Cenvat Credit:
The appellant sought the benefit of cum duty price and cenvat credit on inputs procured from outside. The Tribunal upheld the demand for Central Excise duty but allowed the appellant to claim cenvat credit on goods procured from outside, subject to verification of documents. It was also established that the total consideration received should be considered as cum duty price, and this benefit should be extended to the appellant.

Conclusion:
The Tribunal upheld the demand for Central Excise duty on the green houses classified under 94060011 but allowed the appellant to claim cenvat credit on inputs procured from outside, subject to verification. The benefit of cum duty price was also to be extended to the appellant. The appeals were partially allowed, with modifications to the original order to include these benefits.