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TMI Blog2015 (10) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... fore they have neither fabricated any body/equipment nor mounted the same on chassis. Therefore the activity of customization carried out by the respondent does not fall under the four corners of chapter note 3. - Decided in favor of assessee. As regard the dropping of the demand on account of alleged removal of add on kits and parts and shortage found in the physical stock verification in Powai and Silvassa units, we find that there are serious conflicts between the allegation made in the show cause notices and Commissioner's findings in the impugned orders. The Ld. Counsel also made submissions that due to claim of SSI Exemption demand is not sustainable and also it is time bar. We therefore find that as regard demand of excise duty on alleged removal of add on kits and parts from Powai and Silvassa units needs re-consideration. - matter remanded back on this matter. Determination of turnover for the purpose of SSI exemption - extended period of limitation - Matter remanded back for reconsideration. X X X X Extracts X X X X X X X X Extracts X X X X ..... f the already built up motor vehicle on the ground that the customization or modification of built up motor vehicle amounts to manufacture. (b) Excise duty demand on the body building falling under chapter heading 8702 denying the exemption Notification No. 3/2001-CE dated 1/3/2001 on the ground that the respondent availed the Cenvat credit of the input which is in violation of condition of said notification. (c) The excise duty demand on the removal of add on kits on the ground that either it was found short in the stock taking or removed under the cover of challan without issuing the invoices. (d) Excise duty demand by denying SSI exemption Notification No. 8/2001-CE dated 1/3/2001 during the period 2001-2002 on the ground that the aggregate value of the clearances during the year 2000-2001 exceeded threshold limit of ₹ 3 crores. 2.1 In the adjudication, the adjudicating authority dropped the proceedings in respect of excise duty demand on the customization of the motor vehicles, excise duty demand on alleged removal of add on kit, demand related to SSI exemption on the ground that threshold limit in 2000-01 was below ₹ 3 crores. However excise duty demand on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and proper? (b) Whether by an order passed under Section 35C of the Act, the CESTAT should: (i) To hold that Central Excise duty is liable on the goods cleared by M/s. DCDPL, Powai to M/s. DCDPL, Silvassa, and consequently, order recovery of Central Excise duty amounting to ₹ 11,66,802/- liable on such clearance. (ii) Deny the exemption availed by M/s. DCDPL, Andheri under the provisions of Notifications No. 08/2001-CE dated 1/3/2001 in respect of clearances effected by it during the year 2001-2002 and consequently, order recovery of Central Excise duty amounting to ₹ 1,68,317/- liable on such clearances. (iii) Impose penalty, as proposed under Show cause notice dated 1/1/2003 issued to M/s. DCDPL, Andheri, on all the noticees and order recovery of interest on duty. (iv) Liable as above under the relevant provisions of the Central Excise Rules, and Rules thereunder. (v) Impose penalty as provided in Rule 209 A of Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2001, viz a penalty not exceeding the duty on the excisable goods or Rupees ten thousand whichever is greater. (c) Whether the CESTAT should pass any such other order as may be deemed fit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modvat credit but equal amount was lying in balance and subsequently that amount stood lapsed which amount to non-availment of Cenvat credit. This tribunal vide final order no. A/649/2004-WZB/C-II dated 22/7/2004 allowed the appeal of the respondent by extending benefit of notification no. 3/2001 -CE dated 1/3/2001. Against the said Tribunal order, revenue field appeal before Hon'ble Bombay High Court which was allowed by the Hon'ble High Court vide order dated 12/3/2015 wherein the Hon'ble High Court reversed the Tribunal's by upholding the demand but the penalty was waived. The order of the High Court then attained finality. Aggrieved by the impugned orders the Revenue filed these three appeals. 3. Shri Ashutosh Nath, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue submits that as regard the customization of motor vehicle, the activity amounts to manufacture on the ground that as per Chapter Note 3 of Chapter 87 the independent activity of building of body/fabrication on the chasis of motor vehicle is amount to manufacture therefore irrespective of the fact that the motor vehicle on which customization was undertaken, though duty paid but body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 1/1/2003 was liable to confirmed. In regard to OIO No. 27/2003 dated 10/12/2003 he submits that demand of ₹ 16,48,750/- though dropped by the tribunal vide order dated 22/7/2004 but the Hon'ble Bombay High Court vide order dated 12/3/2015 maintained the demand confirmed by original order, hence the same attained finality. Regarding duty of ₹ 4,93,276/-, on shortage of goods found in Silvassa unit, duty of ₹ 1,01,644/- on the kits manufactured but not accounted for in the statutory records and duty of ₹ 21,917/- in respect of kits cleared from Silvassa unit without payment of duty, he submits that Ld. Commissioner dropped the demand on the basis that the stock taking was carried out for individual item whereas accounting was done as per kit and one kit consist of number of parts. He submits that there was no dispute at the time of panachanama drawn therefore whatsoever shortage was recorded at the time of panachanama the same cannot be disputed at later stage. As regard SSI exemption Notification No. 8/2001- Cus claimed by the respondent and allowed by the Ld. Commissioner, he submits that there is apparent error in the computation of aggregate clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent in any case does not fall under the Chapter Note 3 of Chapter 87 of Central Excise Tariff Act. He submits that in view of this fact, the judgments relied upon by the revenue are not applicable as those judgments are related to the issue where the independent body was fabricated. He further submits that as regard the SSI exemption, the respondent was of bona fide belief that clearance of bus/tempo traveller was under exemption notification no. 3/2001 dated 1/3/2001 and accordingly the value of said exempted goods were not liable to be added in the total aggregate value and consequently they were entitle for SSI exemption for the period 2000-01 as well as 2001-02. He submits that clearances on which SSI exemption was availed were very much declared to the department in their returns. The exemption become ineligible only on the ground that the aggregate value of 2000-01 exceeded ₹ 3 crore, which is due to denial of exemption notification No. 3/2001-CE. The issue of eligibility of the said notification was highly contentious and once the Tribunal has allowed it and subsequently the Hon'ble Bombay High Court has reversed the order of the Tribunal. In these circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of the duty. 5. We have carefully considered the submissions made by both sides. 6. In all the appeals the issues to be decided by us are as under: (a) Whether customisation of the motor vehicles as per requirements of customers is amounts to manufactured as per Section 2(f) of Central Excise Act, 1944 and/or Chapter Note 3 of Chapter 87 of Central Excise tariff. (b) Whether dropping of demand by the Commissioner on alleged removal of add on kits and parts from Powai and Silvassa units are correct. (c) Whether the Respondents are entitle for SSI Exemption notification No. 8/2001-CE dated 1/3/2001 during the year 2001-2002. (d) Whether personal penalty imposed for ₹ 5000/- each in two OIO on Shri BD Bajaj is correct or to be increased to ₹ 10,000/- each. As regard demand of duty on customization of motor vehicle we find that the respondent is carrying out the activity of cosmetic changes on the duty paid cars and vehicles these duty paid vehicles are completely ready for use with its body. They are doing cosmetic changes as per the requirement of the customer inside and outside of the vehicle. In our considered view these activity do not amount to manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions that due to claim of SSI Exemption demand is not sustainable and also it is time bar. We therefore find that as regard demand of excise duty on alleged removal of add on kits and parts from Powai and Silvassa units needs re-consideration. Therefore for this part of the demand we remand the matter to the Original Adjudicating Authority for passing a fresh order after appreciating the facts, considering the representation, if any, made by the respondent, issue of time bar etc. As regard the duty demand related to clearances claimed to be covered under SSI Notification No. 8/2001-CE dated 1/3/2001 during the year 2001-02 it is observed that Ld. Commissioner while computing the aggregate value of ₹ 3 Crores during the year 2000-01 made an error that value of ₹ 1,03,04,873/- towards clearances of bus/tempo traveller was not taken into account therefore aggregate value remained below ₹ 3 Crores, accordingly extended the benefits of SSI Exemption Notification No. 8/2001 -CE dated 1/3/2001. We find that there is no dispute particularly when the Hon'ble Bombay High Court in the appellant's own case held the clearances of buses/tempo traveller as dutiable de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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