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TMI Blog2017 (8) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... he period 2007-08, 2008-09 for the unit at Roorkee. The unit at Roorkee was availing Area Based Exemption under Notification No.50/2003-CE dated 10.06.2003. On scrutiny of records, it appeared that the Ghaziabad unit had manufactured complete transformers on job work basis on behalf of their said Roorkee unit whereas on paper M/s EIUL have shown manufacturing and supply of various parts of transformers/semi finished transformers on job work basis for their said Roorkee unit. Further, in terms of condition of Notification No. 214/86-CE, it appeared that the Ghaziabad unit was liable to pay Central Excise duty on the said transformers manufactured by them on job work, since neither the goods manufactured by them on job work were used in or in relation to the manufacture of final products not the said goods have been cleared on payment of duty from the Roorkee unit. It also appeared that the Ghaziabad unit have also manufactured some transformers at Ghaziabad unit and cleared the same to their customer directly from Ghaziabad unit during 2009-10 & 2010-11 without payment of duty on the invoice of their Roorkee unit, showing the production at Roorkee. 3. A search operation were conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -08 and the unit at Lakeshwari Industrial Area, Roorkee is functioning since 2009-10. 5. Statement of Shri Ajay Vats, Senior Executive (Marketing) of M/s EIUL in his statement dated 20.08.2010, interalia, stated that- He is working in this company since 1st January, 2009 and his responsibilities are to develop software and preparing of bills. He is preparing tax invoice & sale invoice of M/s East India Udyog Ltd. Sahibabad, Ghaziabad and also preparing sale/tax invoice of M/s EIUL situated at Lakeshwari Industrial Area, Roorkee & M/s EIUL situated at Salempur Rajputan Industrial Area, Roorkee. For preparing invoices for Roorkee units, he received information through Fax (challan copy) from Roorkee unit and some time received information on phone and on the basis of information received on phone or challan copy received on Fax, he prepares tax/ sale invoice of the Roorkee unit. He prepared tax/sale invoices of Roorkee units on the direction of Shri Surender Gupta, Director, Marketing of the company and he reports to him as and when required. 6. Statement of one Shri Lalit Mohan Jha, Production In-charge of M/s Jyoti Udyog Ltd., Ghaziabad in his statement dated 20.08.2010 intera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They manufacture tanks and radiators only for their other units M/s EIUL and M/s Jyoti Udyog Ltd. Mohan Nagar. 9. Summons were issued to Shri Sushil Sharma (Production In-charge, Ghaziabad unit), who was involved in the activity of production of transformer on job work for Rorkee unit, and also to Shri V.S. Tomar (Authorized Signatory) who was dealing with documentation and transportation of the transformers manufactured on job work and Shri P. Banerjee (Manager Finance) all of M/s EIUL. In compliance of summon, Shri P. Banerjee appeared on 27.08.2010 and interalia stated that- He is working as Manager Finance with M/s EIUL since July 2000 and looking after all the work related to finance/accounts. Accounts work is headed by Shri G. Aggarwal of all the five units of M/s EIUL, are being done at Sahibabad, Ghaziabad. Shri N.K. Lohia is head of the purchase department. However, accounts of purchase of raw materials are being maintained unit wise separately. Shri Surender Gupta is Chief Marketing Head of all the five units of M/s EIUL and other five Sales Executives are working under the direction of Shri Surender Gupta who looks after the sales of each unit separately. Excise invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allan on behalf of their Roorkee unit from Ghaziabad office. After perusal of files containing copy of challans (RUD-12) issued by them for removal of goods manufactured by them on job work, he stated that these challans were issued by their Ghaziabad unit to their Roorkee unit situated at Salempur Rajputan Industrial Area, Roorkee. He also stated that during 2007-08 & 2008-09 they had manufactured transformers on behalf of their Roorkee unit on job work and these challans were issued for removal of said transformers manufactured on job work. They manufactured complete transformers except punching serial number of transformer on behalf of their Roorkee unit during 2007-08 & 2008-09. They had not sent the semi finished parts as shown on the said challans but they had sent the complete transformer to their Roorkee unit. He further stated that after perusal of GRs contained in the file resumed at S. No. 95 of Panchnama dated 20.08.2010 from M/s EIUL (RUD-16), he stated that GR No. 345 dated 04.06.2010, No. 319 dated 05.05.2010, 311 dated 05.05.2010 & 285 dated 05.05.2010 contained in this file were prepared by him in their office at Sahibabad, Ghaziabad. He also stated that in cases w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le items are being purchased by their head office situated at Sahibabad Ghaziabad and supplied to them. Prior to February 09, no raw materials was received in their unit at Roorkee since all the raw material was supplied directly to M/s EIUL, Ghaziabad, by their head office for manufacture of transformers on job work basis. From, Feb 2009 they are receiving the raw materials from Ghaziabad for manufacture of transformers. Their head office sent the said transformers manufactured by M/s EIUL on job work after testing at Ghaziabad through Challans. They removed the said transformers from their unit after completing the fittings, bushings, oil tapping and painting of tanks. No document was sent to M/s EIUL from their Roorkee unit for job work. After perusal of challans No. 136 & 137 both dated 05.09.2009 in the file resumed at S. No. 21 (RUD-21) and Gate pass book resumed at S. No.32/3 (RUD-22) under Panchnama dated 20.08.2010 from M/s EIUL, he stated that the transformers which have been shown to be cleared from their Roorkee units under the said Challans No. 136 & 137 both dated 05.09.2009, were actually manufactured and cleared directly from M/s EIUL Ghaziabad. He prepared the invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly competent as the training of worker and staff was lacking. They sent complete components/parts of transformers after manufacturing at their Ghaziabad unit on job work basis. The raw materials for manufacture of said components/parts for their Roorkee unit was purchased by their Head office at Ghaziabad and supplied to Ghaziabad unit directly. They have not received any documents/challan in respect of supply of said material from their Roorkee unit. After manufacturing the said components/parts of transformers on job work, they sent the same through challan issued by Ghaziabad unit. Their principal raw materials received on behalf of their Roorkee unit are Silicon Steel Sheet/Coil to make core assembly, Aluminum and Copper wire and insulation paper to make H.T and L.T Coils, M.S Steel and Section to make tanks, transformer oil used as coolant in the finished Transformers and H.T. bushing and fitting, as such supplied with the said goods. The above parts, except H.T. bushings and fittings are put/fitted in the tanks and filled with oil. With reference to the statement dated 20/08/2010 of Shri Surender Gupta, Marketing Head and statement dated 30/08/2010 of Shri V.S. Tomar in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Silicon Steel Sheet/Coil used to make Core assembly. (ii) Aluminum and Copper wire and insulation paper used to make H.T. and L.T. Coils. (iii) MS Steel and Section used to make tanks. (iv) Transformer oils used as coolant in the Transformers. (v) H.T. bushing and fittings were put/fitted in the tanks and filled with oil. and cleared the same after job work from Sahibabad, Ghaziabad unit to the Roorkee unit on challans. M/s EIUL have shown clearance of semi finished transformer/part of transformer on the said challans to the Roorkee unit on charging of job work charges for manufacturing of said semi finished parts of the transformer on job work basis. On careful examination of these challans, it appears that the numbers of semi finished parts of Transformers mentioned in the said challans are corresponding to complete transformer. For example, in Challan No.EIU/S 544/2007 2008 dated 22/12/2007 placed in file, containing bills/challans issued to M/s EIUL Salempur Rajputan, Roorkee for the year 2007 08, Sl. No.12 of annexure to the Panchnama (RUD-12), M/s EIUL had shown clearance of the semi finished parts of the transformer as under:- Being the job work charges for manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haziabad-Head Office on behalf of their Roorkee unit and supplied to M/s EIUL Sahibabad Ghaziabad, which manufactured Transformers on behalf of their unit Roorkee on job work basis, during the said period and removed from Ghaziabad unit to Roorkee unit without payment of duty, claiming exemption under Notification No.214/86 CE. It further appeared that M/s EIUL Sahibabad Ghaziabad was not entitled for exemption on the said goods, since their Roorkee unit was availing Area-based exemption under Notification No.50/2003 CE. It further appeared to revenue that appellant unit at Sahibabad Ghaziabad is not entitled to benefit of Notification No.214/86 CE for want of satisfaction of the conditions. It is further observed that neither the goods manufactured by M/s EIUL Sahibabad Ghaziabad were on job work basis, were used in or in relation to the manufacture of final products nor the said goods have been cleared on payment of duty from their factory. Since, the complete manufacturing activities were undertaken by M/s EIUL Sahibabad, Ghaziabad unit and no further manufacturing activities were carried out at Roorkee unit for such goods and also the said goods were cleared to the customers ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross Examination in the course of the proceedings. Further, appellant had made specific request in their interim reply, praying for cross-examination of about 14 persons who were named therein. The learned counsel also states that in view of the detailed examination of the records, nothing being found contrary, the learned Commissioner have erred in demanding the duty solely based on the statements. He further states that the show cause notice is vague, as it is admitted case of the revenue that the appellant unit at Sahibabad, Ghaziabad manufactured and cleared various parts and components of the transformer to their Roorkee unit, but duty have been demanded wrongly on the value of complete Transformers. The learned counsel further urges that the learned Commissioner have misdirected himself by relying on the provisions of Notification No.214/86 CE. The learned Counsel urges that in the facts of the given case, as their Roorkee unit was availing benefit of exemption under Area-based Notification No.50/2003-CE, the procedure for job work under Notification No.214/86-CE is not applicable. He further states that there is no illegality in the modus-operendi adopted by the appellants, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan along with the road permit, there is endorsement by the Sales Tax check post, Roorkee unit. Learned counsel further explains that the appellant-assessee's Sahibabad, Ghaziabad unit and Roorkee unit have to maintain proper records of usage of such road permits and account for them before the concerned Sales Tax Department. The learned counsel further draws our attention to the facts that the Roorkee unit have filed proper returns of its turnover as required under Notification No.50/2003 CE with the Central excise Department. Nowhere, any of such returns have been found to be untrue or otherwise. The learned counsel further states that there has been failure on the part of learned Commissioner to exercise jurisdiction in examining the witnesses of the revenue. Inspite of all the powers of a Civil Court being vested, to ensure the attendance of witnesses, the learned Commissioner failed to exercise jurisdiction and have drawn erroneous conclusions to the prejudice of the appellants. The learned counsel also has drawn our attention to the financial records of the Roorkee unit by producing the audited balance sheets and financial statements of the Roorkee unit. From the balance- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial to show presence of any notional margin of profit or amount of such profits, it was held that margin of profit was not includable in the assessable value. The learned Counsel also relies on the ruling of this Tribunal in the case of CCE Vs East India Udyog Ltd (appellant's own case) reported at 2001 (134) ELT 758, wherein the issue was conversion of duty paid paper coated copper wire into coils for use in repair of transformer, whether amounts to manufacture. It was held that the same does not amount to manufacture within the meaning of Section 2 (f) of the Act. Relying on these rulings, the learned counsel states that the parts of Transformers are not separately marketable and as such no excise duty is leviable. Even in absence of the procedure of job work under Notification No.214/86-CE, transformer parts were removed from the Sahibabad Ghaziabad unit of the company. Accordingly, the learned counsel prays for allowing the appeal with consequential benefits and setting aside of the impugned order. 21. The learned A.R. for revenue have relied on the findings of the impugned order. 22. Having considered the rival contentions, we are satisfied that the learned Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -16 (road permits), file containing inspection related correspondence (for sale of Transformers), stock and production file, form 31 register (road permit under UP Sales Tax Provisions), daily goods register, sales tax file, register of HB/LB coil, attendance register, production register, power ratio register, nameplate dispatch register, record of failure register, 57 F 4 challan file. More particularly, at the Roorkee unit as per Punchnama dated 16/09/2010, the documents found and recovered were challan/transfer invoices, incoming goods register, outgoing goods register, copy of statutory gate pass, material receipt register, dispatch file, challan file, Ghaziabad challan file, etc. We also find that none of the persons whose statement was recorded have made an averment that the Transformer components have not moved from Sahibabad Ghaziabad unit to their Roorkee unit. In view of all these overwhelming evidences, which are discussed above, we find that the whole case of the revenue is based on presumption, which has not been corroborated, in view of overwhelming documentary evidences, on record. 23. In this view of the matter, we allow both the appeals and set aside the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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