2020 (1) TMI 183 - AT - Central Excise

Benefit of exemption - job-work - manufacture of Pipes on behalf of M/s. ITD Cementation India Limited on job work basis - demand on the ground that the pile liners fabricated at site of construction were used at the marine site, is exempted vide N/N. 23/2011-CE (NT) dated 01.12.2011 - HELD THAT - As per the nature of contract, there is absolutely no doubt that MS pipes/ tubes manufactured at site for fabrication pile liners. Though the N/N. 3/2005-CE dated 24.02.2005, under serial No. 64 of the table appended thereto, grants exemption to all goods of Chapter heading 7308. However, by issue of N/N. 23/2011-CE (NT) dated 01.12.2011, under Section 11C of the Act with retrospective effect, the goods falling under Chapter heading 7305 are clearly exempted - the contention of the Revenue, in the grounds of appeal that the goods become exempted as per the amending N/N. 41/2011-CE dated 18.11.2011, is not relevant in view of N/N. 23/2011-CE (NT) dated 01.12.2011 issued under Section 11C of the Central Excise Act, 1944. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the appellant's manufacture of MS Pipes on job work basis without discharging Central Excise duty is liable for demand of excise duty.
2. Whether the MS Pipes/Tubes manufactured by the appellant are exempted under Notification No. 23/2011-CE(NT) dated 01.12.2011.
3. Whether the goods become exempted as per amending Notification 41/2011-CE dated 18.11.2011.

Analysis:
1. The appellant was engaged in manufacturing MS Pipes falling under Chapter heading 73053190 without discharging Central Excise duty. A show cause notice was issued demanding excise duty, which was dropped by the Adjudicating Authority citing exemption under Notification No. 23/2011-CE(NT) dated 01.12.2011. The Revenue appealed against this decision.

2. The Revenue argued that the MS Pipes/Tubes manufactured by the appellant, used as segments of pile liners, are distinct products and not exempted. However, the Tribunal found that the nature of work assigned to the appellant was for fabricating pile liners, and the MS pipes/tubes were intermediate products for pile liners. The Tribunal noted that Notification No. 23/2011-CE(NT) dated 01.12.2011 exempted goods falling under Chapter heading 7305, making the Revenue's argument irrelevant. Therefore, the appeal lacked substance, and the impugned order was upheld.

3. Despite the absence of the Respondents, the Tribunal considered the facts and relevant notifications. It was established that the appellant's manufacturing of MS Pipes for pile liners fell under the exemption provided by Notification No. 23/2011-CE(NT) dated 01.12.2011. The Tribunal clarified that the amending Notification 41/2011-CE dated 18.11.2011 was not applicable in this case, as the exemption was covered under Notification No. 23/2011-CE(NT) dated 01.12.2011. Consequently, the Revenue's appeal was dismissed, affirming the Adjudicating Authority's decision.

This detailed analysis of the judgment highlights the key issues involved and the Tribunal's reasoning behind dismissing the Revenue's appeal in light of the relevant legal provisions and notifications.