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TMI Blog2023 (9) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... the department and hence the question of them complying with the conditions of Notification 214/86 would not arise at all. In the case of Vandana Dyeing Pvt. Ltd [ 2014 (8) TMI 441 - CESTAT MUMBAI] also, the goods were moved by following the procedure prescribed under Rule 4(5)(a) of the Central Excise Rules, 2002 to the job worker. Accordingly, it was held that the duty liability was on the supplier of the raw materials - thus, the job worker M/s Jamuna enterprise are the actual manufacturers . Classification of goods - providing conversion services of MS Rounds, bars etc. and converting the same to sockets, bends etc - to be classified under CETH 87089900 or not - HELD THAT:- Even though the Challans issued by them indicate that the job worker has converted the MS Rounds and Bright Bars into sockets and bends, no evidence has been brought on record to classify the goods as Parts of Motor Vehicles under the Chapter Heading 87089900. The classification has been arrived at without ascertaining the actual processes under taken by the Appellant. It was only presumed that the finished goods are Motor Vehicle Parts . There is no findings in the impugned order on what basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes for Sl. No. 2. for the Appellant Shri K. Chowdhury, Authorized Representative for the Respondent ORDER M/s. Jamuna Enterprise (The Appellant) was engaged by M/s. Bidisha Enterprise for conversion of raw materials such as MS Round, Bright bars etc. for job work, as per the specification provided by them. For the processing work carried out by the Appellant, they were paid labour charges by M/s. Bidisha Enterprise. 2. An investigation was carried out at the business premises of M/s. Bidisha Enterprise on 15.06.2010 by the Anti Evasion wing of the Central Excise department and it was seen that they were not registered under the Central Excise Act, 1944 until November 2007. M/s. Bidisha Enterprises took the Central Excise registration only in December 2007. 3. On the basis of the investigation carried out at the premises of M/s. Bidisha Enterprise, the Appellant was issued a show cause notice dated 25.03.2011, demanding central excise duty Rs.64,50,631/-on the goods, namely parts of motor vehicles , manufactured and cleared to M/s. Bidisha Enterprise during the period 2006-07 and April 2007 to November 2007 by invoking extended period of limitation. The duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri. - Chennai) wherein under similarly placed situations as of the Appellant, the CESTAT held as under: 18. Further the Board s Circular dated 20-3-1997 categorically clarified that as per provisions of Rule 4(5)(a), the manufacturer can get the job work done on the inputs in terms of provisions of Rule 57F(4) of CCR. In this context, the duty liability is required to be discharged by the principal manufacturer and not by the job worker. In the present case, no input credit has been availed by the job worker. Revenue contended that Rule 4(5)(a) of CCR is not applicable on the ground that principal supplier has not availed credit. In the present case, the scrap was directly sent from the port of import to the job worker and the principal supplier has availed credit immediately on receipt of MS ingots and billets from the job worker. There is no restriction on the manufacturer to send raw material directly from the place of import to the job work premises. Therefore, we hold that there is no dispute on the receipt of scrap and clearance of MS ingots/billets to the principal supplier, the question of demanding duty on the job work does not arise. In view of the foregoing discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n payment of duty for home consumption. The demand of duty is consequential to non-fulfilment of this condition. The appellants have resisted the demand of duty on the ground that it was for the raw material-supplier to comply with the said condition. It is their further case that the department could have recovered duty on the subject goods from M/s. Vijay Detergent Products (P) Ltd. on the ground of non-fulfilment of the said condition. We find that the Tribunal s decision in Aggarwal Rolling Mills (supra) supports this case of the appellants. No binding decision to the contrary was cited by the DR. In the result, the impugned order is set aside and this appeal is allowed. 4.6 The Appellant also relied on the decision of the CESTAT, Mumbai, in the case of VANDANA DYEING PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-III 2014 (307) E.L.T. 528 (Tri. - Mumbai) wherein it was held as under:- 5. We have carefully considered the submissions made by both the sides. As held by us in appellant s own case and also in Trico Process Pvt. Ltd. and Akash Fashion Prints (P) Ltd. cases (supra), the liability to pay duty in respect of goods moved under Rule 4(5)(a) is on the supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had violated the provisions of law by clearing goods to M/s. Bidisha Enterprises without payment of excise duty. They were engaged in provision of job work and had collected labour charges from M/s. Bidisha Enterprise who had send the raw material to them for job work. There was no element of 'manufacture' being done by them to invoke provisions of section 2(f) of the Central Excise Act, 1944. Extended period of limitation under section 11A(1) of the Act can be invoked if suppression, wilful misstatement occurs due to deliberate evasion of duty on part of the Appellant. It is clear that such act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to avoid payment of duty. 4.11. The concept of suppression has been dealt with at length in the case of Lakshmi Engg. Works Vs. CCE reported in 1989 (44) ELT 353 by the Apex Court as reported in 1991 (55) ELT A33 wherein it has been held that the concept of suppression amounts to that which one is legally to state but one intentionally or deliberately or consciously does not state. In other words, the term suppression includes a mental element to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant received raw materials such as MS Round, Bright bars etc. from M/s Bidisha Enterprise and carried out processing on the raw materials, as per the specification provided by the supplier of the raw materials, which resulted in products such as sockets, bends etc. For the processing work carried out by the Appellant, they were paid labour charges by M/s. Bidisha Enterprise. The contention of the Appellant is that they were only job workers and the actual manufacturers of the goods were M/s Bidisha Enterprise, who supplied the raw materials. Thus, we observe that the issue to be decided in the present appeals is whether the supplier of raw materials is the manufacturer (or) the job worker who carried out the processes as per the specifications and brought in the finished goods, are the manufacturers as per Section 2(f) of the Central Excise Act, 1944. 8. It is a fact on record that M/s Bidisha Enterprise has not registered with Central Excise department till December 2007. The present issue pertains to the period prior to December 2007, when they have not taken registration and got their goods manufactured through the job worker . Notification 214/86-CE dated 25.03.1986, pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck finished goods such as sockets, bends etc. which are claimed to be parts of motor vehicles, by the department. Thus, we observe that documentary evidences available on record indicate that the processes undertaken by the Appellant has converted the M.S Rounds, Brights Bars sent by M/s Bidisha Enterprise into some dutiable final products. Accordingly, we hold that the processes undertaken by the Appellant amounts to manufacture as defined under Section 2(f) of the Central Excise Act, 1944. 14. The next question to be answered is whether the duty liability on the finished goods manufactured and cleared by the Appellant is on them or on M/s Bidisha Enterprise, the supplier of the raw materials. In support of their contention that the raw material supplier is the actual manufacturer, the Appellant relied upon the following decisions: (i) OPG Metals Pvt. Ltd. Vs Commissioner of Central Excise, Trichirapally, reported in 2016 (343) ELT 230 (tri-Chennai) (ii) Moon Chemicals Vs Commissioner of Central Excise, Thiruvanathapuram, 2007 (215) ELT 434 (Tri-Chennai) (iii) Vandana Dyeing Pvt. Ltd. Vs Commissioner of Central Excise, Mumbai-II 2014 (307) ELT 528 (tri-Mumbai) 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in the case of Kerala State Electricity Board (supra) which has been upheld by the Hon ble Apex Court and in the case of M.M. Khambatwala (supra) the Hon ble Supreme Court held that the assess having paid wages to the house-hold ladies for manufacturing agarbatti, amlapodi and dhup etc. It was the contention of the assessee that the goods manufactured by such house-hold ladies though in their own premises must be taken as manufactured in the factory of the assessee. It is not in dispute that levy of excise duty is attracted on the incident of manufacture. Wherein in that case the Hon ble Apex Court held that the assessee cannot be considered as manufacturers of agarbatti, amiapodi and dhup etc. manufactured in the premises of house-hold ladies as described above without the aid of power. The undisputed facts are that the respondents supplied raw materials for rolling incense sticks etc. to outside manufacturers and paid wages to them on the basis of number of pieces manufactured. Such manufacture was without the aid of power. There was no supervision over the manufacture. Incense sticks were put in packets and such packets were sold from the premises of the house-hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Chapter heading 87089900, as parts of motor vehicles are not sustainable. 19. The Appellant contended that the department has invoked extended period of limitation of 5 years from the relevant date to issue the demand notice. The SCN was issued on 25.03.2011 for the period 2006-07 and April 2007 to November 2007 and the normal period of limitation of six months would have expired much earlier than the date of issue of show cause notice. The Ld. Adjudicating authority has held that extended period of limitation is invocable in the present case as the appellant had violated the provisions of law by clearing goods to M/s. Bidisha Enterprises without payment of excise duty. The Appellant contended that they were engaged in providing job work and had collected labour charges from M/s. Bidisha Enterprise who had send goods to them for job work. Extended period of limitation under section 11A(1) of the Act can be invoked only if suppression, wilful misstatement occurs due to deliberate evasion of duty on part of the assessee. It is clear that such act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to avoid p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice must clearly bring out act of omission of the assessee leading to invocation of extended period of limitation. The proviso regarding extended period of limitation finds application only when specific and explicit averments challenging bona fides of the conduct of the assessee are made in the show cause notice. The burden to justify invocation of extended period clearly lies with the Department and the assessee cannot be asked to bring evidence to provide his bona fide when prima facie the assessee acted in bona fide manner. 22. From the facts on record, we observe that the department has not brought in any evidence to establish that the Appellant has suppressed the facts with an intention to evade payment of duty. Thus, by following the above decision of the Hon ble Apex Court, we hold that the demand of duty by invoking extended period is not sustainable in this case. Accordingly, we hold that the demand is liable to be set aside on the ground of limitation. 23. Regarding the penalty imposed on the other Appellant Shri Biswajit Saha under Rule 26(1) of the Central Excise Rules, 2002, we observe that he has sent the raw materials for job work a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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