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TMI Blog2017 (7) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of the Tribunal in the case of Thermax Ltd. V. CCE [1995 (11) TMI 139 - CEGAT, NEW DELHI] which has held grain storage systemas classifiable under heading 84.36. Classification of goods - Tractor Trollywithout Hub and Tyres lawn or sports ground rollers at nil rate of duty as prescribed for goods within such classification. The explanation of machineryas hereinabove is adopted for the purpose of classifying the said item. Classification of Phawara blade/Belch (both without stick) - classified under CTH 8201 or 8432? - Held that: - a spade, in commercial parlance cannot be without a stick or handle - It has been stated by the Appellant that the stick or handle is not provided by them and the same has not been refuted by the Department. The Adjudicating Authority has wrongly denied the benefit of nilrate of duty to the said items by incorrectly classifying them under Chapter Sub Heading 8201 as the items in question are both without handle but are used for soil preparation and cultivation and are therefore classifiable under Chapter Sub Heading 8432. Classification of Tasla - classified under chapter 73 or under chapter 84? - Held that: - item is classifiable under Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory premises, at the time of inspection and/or drawal of proceedings and there is no investigation by the Revenue, as to the period, during which the appellant had connection from the Electricity Department and other relevant fact like, number of units consumed, etc. It is admitted fact that they were using generator for running their welding machine and compressor. Under these admitted facts, we hold that the appellant is not liable to excise duty on the Steel Boxes & Almirah and they are entitled to exemption under Notification No. 30/2001-CE dated 01/03/2001. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Gas Welding Machine 1 Hand Drilling Machine 1 (iii) Raw Materials GP Sheet 8'x 3' 40 Black Sheet 5 Further, on being asked Shri Kamla Kant Shukla informed that the aforementioned finished goods had been manufactured in the factory. Further informed that there was no electricity connection and the same is lying disconnected since long, and that for manufacturing they were using 5 KW generator set, which was also out of order at the relevant time, and had been sent for repair on 21/04/2000 i.e. 2 years prior to the date of search being on 23/04/2002. On being asked about the 4 shops Cum-godowns which were located at the front side of the factory within the premises, Shri Kamla Kant Shukla informed that shop number four was on rent and other three shops were being used for storing the factory made goods. The three shops were opened and the following items were found lying in the shops: Description Quantity Duly painted Steel Almirah [Full size] 5 Almirah 50[Steel Grey] 1 Book Shelf 5 Steel Bukhari 10 Phawra 20 The Panchnama was drawn for the search conducted on 23rd April, 2002. Further Shri Kamla Kant Shukla stated that the items had been manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Furniture [Table/Table racks, Almirahs, Book shelf, etc.] (b) Steel Boxes (c) Phawra Blade (Spade) (d) Tractor trolly & Parts (e) Thresher/Chop cutter Parnala (f) Thresher Parts (g) Thresher Jali (h) Thresher/Chop cutter stand (i) Machine Base [Theeha] (j) Tasla (k) Bakhari [Container for keeping wheat] (l) Mini Trolly (m) Tractor Far [Hal or Plough] It was further explained that there being manufacturing activities done by about 10 to 12 workers and those workers was assisted by him. He also stated that he assigned work to them on contract basis and cost of nut, bolt and handles etc. were included in the contract price as they did not provide any such things to the workers. Items were sold on cash basis and addresses of buyers were incomplete for which Shri Shukla explained that buyers were coming to M/s KGS and gave orders. At the time of accepting the order 50% amount is accepted and the balance 50% is payable at the time of delivery of the goods. They issued cash memo either in the name of buyer or as cash sale. As such, the address of buyers was not known to them. Mr. Shukla further informed and/or stated that items manufactured like Parnala would be used in pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arnala, Rahat Parnala & other Parnala were similar in look, weight, rate per MT and can be used anywhere according to need. Similarly, machine stand could be used anywhere. Thus, Parnala and machine stand could be taken as items of general use and may be classified under chapter heading 7326.90 of the Central Excise Tariff Act, 1985. The other items of manufacture by M/s GS were identified and their classification according to Central Excise Tariff Act, 1985, was held as follows:- Sr. No. Description of goods manufactured and sold Classification as per CETA, 1985 (a) Steel almirah/book shelf/table racks & other Steel furniture 9403.00 (b) Steel Box 7310.00 (c) Steel bakhari/Tin container (of 5 Qtl. Capacity for storing grains) 7309.00 (d) Phawra [Spate] blade (without stick) 8201.00 (e) Tractor Trolley without Hub and Tyres & Parts (body) 8716.00 (f) Thresher/CC Rahat Parnala/Parnala 7326.90 (g) Thresher/CC Stand 7326.90 (h) Mini Trolley 7326.90 (i) Thresher Jali 8433.00 (j) Thresher Parts 8433.00 (k) Tasla 7326.90 (l) Machine base (Theeha) 7326.00 (m) Tractor Far 8201.00 5. It further appeared that as per Notification No. 4/97 dated 01/03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65,63,040 2000-2001 7,41,86,000 4,41,02,000 3,00,84,000 48,13,440 2001-2002 6,09,07,000 4,48,62,000 1,60,45,000 25,67,200 TOTAL 15,76,19,000 2,33,59,158 Further, Revenue recognized appellant M/s KGS is SSI unit and for the year 1996-97. The sale of dutiable goods being less than 3 Crores (total sale Value - ₹ 3,24,85,700/-, (-) exempted goods Thresher parts) ₹ 39,70,381/- = ₹ 2,85,15,319/- (Dutiable goods) KGS were eligible for SSI exemption on the sale of dutiable goods for the year 1997-98 to 200102, the duty was calculated after allowing the exemption under SSI notification as applicable from time to time. The calculation is reflected in detail in the Annexure C-I, C-II, C-III, C-IV & C-V to the Show Cause Notice. It further appeared that appellant- M/s KGS have suppressed their affairs and have not disclosed their affairs with the Central Excise Department and were manufacturing dutiable items and cleared the same without taking Central Excise Registration and without observing other formalities and accordingly, it appeared that extended period of limitation was applicable. 8. The Show Cause Notice was adjudicated on contest and the duty was dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Versus Commissioner of Central Excise, Rajkot reported at 1996 (85) E.L.T. 154 (Tribunal), wherein it was held when documents are there to show that the duty paid cement has been used in the manufacture of tetrapods, which are held to be dutiable, the substantive benefit of Modvat credit cannot be denied, while confirming the demand. 10. PRODUCTS WRONGLY CLASSIFIED AND CHARGED TO DUTY It is submitted that the duty is sought to be imposed on the Appellant by seeking to classify the products wrongly and the same are detailed below item wise. 10.1. STEEL BAKHARI/TIN CONTAINER (SEEDS BIN) It is submitted that the item Steel Bakhari or Tin Containers used for storing grains has been wrongly held to be classifiable under Chapter Sub heading 7309 by the Adjudicating Authority. Chapter heading 7309 reads as under:- "Reservoirs, tanks, vats and similar containers 'for any material' (other than compressed or liquefied gas), of iron or steel of iron or steel, of a capacity exceeding 300L, whether or not lined or heat insulated, but not fitted with mechanical or thermal equipment." From the reading of the aforesaid entry it is absolutely clear that the said entry rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading 84.36 10.3 "Tractor Trolly" without Hub and Tyres & Parts It is submitted that the item "Tractor Trolley without Hub and Tyres & Partshas wrongly being classified by the Adjudicating Authority under Chapter Sub Heading 8716.00 and instead is classifiable under Chapter 84 as claimed by the Appellant. Tariff Heading 8716.00 which reads as follows:- "Trailers & Semi-trailers; other vehicle not mechanically propelled; parts thereof" The item in question is an open box of rectangular shape and size. It is not attached with any motor or mechanical device. The said tractor trolley is also without hub and tyres or wheels. The commodity is used for the purpose of transport of materials and had been sold without the trolley. Further, it is relevant to note that the Tribunal has held in the case of Steel Crafts V. Collector of Central Excise, Belgaum [1995 (75) E.L.T. 897 (Tribunal)]: "Trailer is a wheeled vehicle designed to be hauled by a motor vehicle" Therefore, where it has clearly been stated by the Appellant that the tractor trolley in question is not attached with any wheels or tyres, hub and motor, the same has been wrongly classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /belcha (both without stick) are covered by Tariff Heading 8432 under Chapter 84 of the Central Excise Tariff which reads as "Agricultural, Horticultural or forestry machinery for soil preparation or cultivation; lawn or sports ground rollers". The items in question are commonly used for soil preparation and cultivation and are therefore liable to nil rate of duty falling squarely under Chapter Sub Heading 8432 for being agricultural machinery for soil preparation or cultivation. It is further submitted that the Adjudicating Authority wrongly classified the said items as a spade under Chapter Sub Heading 8201 which reads as Hand Tools, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and prunes of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, wedges and other tools of a kind used in agriculture, horticulture or forestry". In order to understand the term spadeas understood in common parlance reference is made to the dictionary meaning of the same: 'a tool with a sharp-edged, typically rectangular, metal blade and a long handle, used for digging or for cutting earth, sand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also not disputed that the goods are genuine products of village industry or that the goods are marketed by or with assistance of the Khadi & Village Industries Commission. The Appellant has also produced certificate from the U. P. KVI Board [at page 40 of the paper book] which is an implementing agency of the Khadi & Village Industries Commission to the effect that the unit is a village industry and is so assisted by the U. P. KVI Board. It is therefore submitted that the Appellant has complied with the conditions, objective and purpose of the exemption notification and the benefit of the same ought to be granted to the Appellant. The Honble Supreme Court in the following cases has held that Notification is to be construed reasonablly and rationally and not in a manner so as to deprive the benefit. * Shriram Vinyl Versus Commissioner of Customs [2001 (129) E.L.T. 278 (SC)] * Commissioner of Customs (Preventive) Versus Malwa Industries [(2009) 12 SCC 735] * Commissioner of Customs (Preventive) Versus Reliance Petroleum Ltd. [(2008) 7 SCC 2261] In the present case the intention of the notification has been satisfied and the certificate from U.P. Khadi & Village India Board whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise, Jaipur [2009 (245) E.L.T. 337 (Tri. Delhi)] * Vinod Solanki Versus Union of India [2009 (233) E.L.T. 157 (SC)] It is, therefore, submitted that the exemption under Notification No. 4/97 dated 01.03.1997, 5/98 dated 02.06.1998, 5/99 dated 09.02.1999, 6/2000 dated 01.03.2000 & 3/2001 dated 01.03.2001 is available to the Appellant as the Appellant had adduced sufficient evidence to substantiate its claim and the Order-in-Original, to that extent, is liable to be set aside. 10.10 It is submitted that the Department has not discharged the burden of proof for disputing the classification as they have adduced no positive evidence to refute the claims of the appellant and therefore, the demands are unsustainable in view of the decision of the Honble Supreme Court in the case of Hindustan Ferodo Versus Commissioner of Central Excise [1997 (89) E.L.T. 16 (SC)]. 10.11 EXTENDED PEROD OF LIMITATION NOT AVAILABLE It is submitted that the extended period of limitation cannot be invoked by the Department as there was no intention to evade payment of duty. It is submitted that the Appellant was under a bona-fide belief that the products manufactured by the Appellant were eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, independently under Section 14 of Central Excise Act, 1944 that have never been shown to be false. The appeal was filed in 2004, chiefly on the grounds that: * Modvat credit would have been available on duty paid input (even w/o following the prerequisite Option & Declaration therefor); * Bona-fide belief of non-excisability by virtue of exemption (w/o being shown at any stage or substantiation thereof; * Amount Confirmed is disputed by referring to universal Classification, by exceptions. 12.1 Department Submission on the issue: During hearing, Revenue relied on reported decision of Division Bench of Honble Tribunal (Mumbai) in case of Suzlon Infrastructure Versus Commissioner of Central Excise, Pune-II {2012 (283) E.L.T. 49 (Tri. Mumbai)} held on limitation, Bona-fide belief, it can be formed after all reasonable considerations are taken into account. It cannot be formed when there is nothing on record to indicate that assessee approached with caustion. In that view, invocation of extended period of limitation and upheld. In the instant case, it was the Department to detect clandestine removal, fraudulently & notice never approached i.e. double whammy. On the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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