9911796707
TMI Blog2006 (7) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... ading No. 7206.90 of the Central Excise Tariff Act, 1985 were to be discharged duty as per Section 3A of the Central Excise Act read with Notification No. 30/97-C.E. (N.T.), dated 1-8-97. On the basis of capacity of production in terms of Rule 96ZG(3) of the Central Excise Rules, 1944 the provisions were not applicable to an unit which ordinarily produced castings and non-alloy steel Ingots and billets were incidental to such production. 3. The assessee were issued a show cause notice for levy of duty by considering that the M.S. Ingots were an intended production and not incidentally production since the assessee itself had declared M.S. Ingots to be chargeable and to be cleared at 16% ad-valorem rate and on scrutiny of the returns file under Rule 173(G) of the Central Excise Rules, 1944 it was found that the appellant had manufactured 726.095 MT of M.S. Ingots falling under Heading 7206.90 and 113.080 MT of C.I. castings during the period impugned in these proceeding i.e., April 1999 to Februrary, 2000 and 155.840 MT of M.S. Ingots and 4.42 MT of C.I. Casting during the period February and March, 1999 which would indicate that the assessee was ordinarily manufacturing M.S. Ingo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the volume of castings manufactured, it can be reasonably held that castings were manufactured incidentally. Thus, the stablished on record that during aforementioned period the assessee was ordinarily manufacturing M.S. Ingots and the manufacture of M.S. Casting was incidental. In this context, the relevant portion of the submission of the assessee is reproduced below and to quote : - (8) That it needs mention that we had initially charged the furnace and tested it by manufacture of simple castings, that is M.S. Ingot, as in the mean time we had not received any work order from any customer for manufacture of castings for the Machineries; (9) That it needs to emphasize that while M.S. Ingot is a standard commercial product, the castings are made to order product; (10) That in course of time while we received work orders from different customers ( A few copies of such work Orders are enclosed as Annexure- K/1 to K/44 at pages 47 to 90) and undertook manufacture, we had to resort to manufacture of M.S. Ingots from time to time as and when castings were not manufactured in order to keep the furnace fit for operation without any technical snag, that is to say, M.S. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present circumstances since Ingots have not come out by chance but have come out with a design since the appellant did not have any orders for castings since intention can always change. 6. As regards the plea of time bar under Section 11A the Commissioner has considered and found as follows : - Another submission of the assessee is that demand is barred by limitation. As regards Time bar their submission is that they have filed monthly revenue figure and quarterly return before the jurisdictional Superintendent in time and therefore their entire activity was in the knowledge of the department. Accordingly, they have submitted that allegation of suppression of facts could not have been made against them so as to invoke the extended period under proviso to Section 11A of the Act. In this context, it may be mentioned that party have claimed 16% rate of duty in respect of their M.S. Ingot/billets. They have also declared about their intention to manufacture C.I. Castings. In view of the provisions of sub-rule 3 of Rule 96ZO, the provisions of the annual production based duty scheme do not apply to the Induction furnace unit ordinarily manufacturing castings but incid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of facts to the department, misstatement and/or contravention of Rule 173B ibid with intent to evade payment of duty, and therefore the proviso to Section 11A(1) is invokable for recovery of the amount not paid by them. Once the suppression of facts, misstatement on the part of the assessee and the contravention of the provisions of Central Excise Rules, with intent to evade payment of duty is established on record, the extended period as provided in Section 11A of the Act is attracted and issue of the show cause notice within the period of five years is legally correct and sustainable. It may further be mentioned that in their declarations under Rule 173B submitted with effect from 9-2-99 onwards (enclosed as Annexure-III to the show cause notice), they have clearly cited the notification No. 30/97-C.E., dtd. 1-8-97 as amended against their product M.S. Ingots/Runners/Risers. As stated above, they were also aware that they had no order for manufacture of Castings and to keep the machinery running they are to manufacture Ingots. Therefore, it is found after being aware of the quantum of products to be manufactured by them and the provisions of law and limitations stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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