2018 (2) TMI 220 - AT - Central Excise

Benefit of N/N. 83/94 CE dt. 11.04.94 - Wrapping and packaging paper falling under chapter 48.05 of the Central Excise Tariff Act - demand has been made against the Appellant on the ground that they have wrongly claimed the benefit of exemption notification no. 83/94 by showing that they have done jobwork activity of manufacture of kraft paper on raw material supplied by the principal manufacturer - Held that - while determining the duty, the cum duty benefits should be extended to the assessee. We also find that the adjudicating authority have not examined the fact whether there is a suppression of facts or otherwise. Accordingly, the issue of limitation was also not considered properly - it is fit to remand back the case to the adjudicating authority to consider the case afresh after granting the opportunity of cross examining the persons who were not made available for cross examination as well as examining the record and accounts of the Appellant as to how the alleged jobwork activity has been considered in their books - appeal allowed by way of remand.

Summary

Issues Involved:
- Benefit of exemption notification No. 83/94
- Cross-examination of principal manufacturers
- Quantification of demand
- Time bar aspect
- Consideration of cum duty benefits
- Suppression of facts
- Opportunity for re-examination by adjudicating authority

Analysis:

Benefit of exemption notification No. 83/94:
The case involves the appellants engaged in the manufacture of Wrapping and packaging paper under chapter 48.05 of the Central Excise Tariff Act, claiming the benefit of Notification No. 83/94 for job work activity. The adjudicating authority alleged that the benefit was wrongly claimed as the principal manufacturers denied supplying raw material for job work. The appellants argued that they had undertaken job work activity supported by documentation, including an undertaking from the principal manufacturer. The Tribunal found discrepancies in the reliance on statements of principal manufacturers and directed a re-examination of the case.

Cross-examination of principal manufacturers:
The appellants contested the reliance on statements of principal manufacturers without the opportunity for cross-examination. They argued that the case should have been decided based on verification of accounts and proper consideration of all relevant documents. The Tribunal agreed that the lack of cross-examination raised doubts on the credibility of the statements, emphasizing the importance of examining records and accounts to determine the nature of job work activity.

Quantification of demand:
The appellants raised concerns about the improper quantification of demand, suggesting that clearances were wrongly added despite the acceptance of eligibility by the adjudicating authority. They requested the consideration of prices as cum duty. The Tribunal acknowledged these concerns and highlighted the need for a thorough examination of all aspects, including the calculation of duty, before reaching a final decision.

Time bar aspect:
The appellants argued that the time bar aspect was not adequately examined by the adjudicating authority, pointing out the finality of a previous order allowing exemption for an earlier period. The Tribunal noted the importance of addressing the time bar aspect and directed the adjudicating authority to consider it along with other relevant issues upon re-examination.

Consideration of cum duty benefits and Suppression of facts:
The Tribunal emphasized the importance of considering cum duty benefits for the assessee and noted that the adjudicating authority had not properly examined whether there was a suppression of facts. These factors were deemed crucial in determining the duty liability and required thorough assessment during the re-examination process.

Opportunity for re-examination by adjudicating authority:
Given the various discrepancies and unaddressed issues in the case, the Tribunal decided to remand the matter back to the original adjudicating authority. The authority was directed to grant the opportunity for cross-examination, examine all relevant records and accounts, consider reports from the Preventive Superintendent, and review intimations filed by the principal manufacturer before making a fresh decision. The appellants were instructed to provide all necessary documents for the re-examination process.

In conclusion, the appeals were allowed by way of remand to the original authority for a comprehensive re-evaluation of the case based on the directions provided by the Tribunal.