2023 (12) TMI 1106 - AT - Central Excise

Clandestine removal - Acoustic Enclosures - manufacture and clearance without payment of duty or the said goods were manufactured on job-work basis by other manufacturers and cleared to the customers directly - relevant period i.e. 01/04/2000 to 04/06/2002 - HELD THAT - The Revenue could be able to establish that even though the appellant claimed to have manufactured the acoustic enclosures on job work basis from M/s. SBN Engineering Works and M/s. Steel Engineering works, in fact the same were manufactured in their premises during the relevant period and cleared without payment of duty. The claim of the evidence from the stage of procurement of raw-materials, receipt in the factory, manufacture using their labour force adduced by the Department in the demand notice and confirmed in the impugned order by learned Commissioner (Appeals), the owner shifts to the appellant to establish that the goods acoustic enclosures manufactured on job-work basis. It is found that the submissions advanced by the appellant are of general in nature and devoid of rebuttal of evidences brought on record indicating procurement of raw materials, processing of the same in the factory premises, stock of the glass wool etc. used in the manufacture of acoustic enclosures found in their factory, low conversion charges reflected in the invoice of job-worker etc. overwhelmingly indicate that the acoustic enclosures were manufactured and cleared without payment of duty from their factory. The appeal of the appellant is rejected and order of the Commissioner(Appeals) is upheld.

Summary

Issues Involved:
1. Whether the appellant manufactured and cleared 'Acoustic Enclosures' without payment of duty.
2. Whether the said goods were manufactured on a job-work basis by other manufacturers and cleared to the customers directly.

Summary:

Issue 1: Manufacture and Clearance of 'Acoustic Enclosures' Without Payment of Duty

The Revenue alleged that the appellant manufactured 'Acoustic Enclosures' in their factory premises and cleared them without paying duty, despite claiming that these were produced on a job-work basis by other manufacturers. The Tribunal examined the evidence, including statements and documents, and concluded that raw materials were procured in the name of job workers but were actually unloaded and accounted as stock in the appellant's premises. The appellant's procedure for purchasing raw materials, vouchers for unloading charges, and stock declarations to banks supported this conclusion. Additionally, the glass wool and perforated sheets used in manufacturing were purchased in the appellant's name, contradicting their claim of job-work manufacturing.

Issue 2: Job-Work Basis Manufacturing

The appellant contended that the 'Acoustic Enclosures' were manufactured on a job-work basis by other manufacturers. However, the Tribunal found that the job workers did not have the necessary infrastructure or skilled labor to manufacture the enclosures. Statements from job workers and other evidence indicated that the raw materials were processed and the enclosures were manufactured in the appellant's factory. Payments made to job workers were insufficient to cover actual labor expenses, further supporting the conclusion that the appellant manufactured the enclosures. The Tribunal rejected the appellant's claims, finding that the manufacturing activities were carried out in the appellant's factory, and upheld the order of the Commissioner (Appeals).

Conclusion:

The Tribunal upheld the order of the Commissioner (Appeals), confirming that the appellant manufactured and cleared 'Acoustic Enclosures' without payment of duty. The appeal of the appellant was rejected.