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TMI Blog2024 (12) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Tariff Heading No. 84149090. The appellant had received an amount of Rs.4,24,46,490/- for the period from March, 2010 to January, 2013 towards tool development charges from M/s Brakes India Limited, Chennal and from M/s. LAP Ross Engineering Limited Banavaram. The appellant had manufactured the tools and sold them to the aforementioned customers after raising invoices and paying appropriate VAT without payment of cenvat duty, while retaining the tools in the factory for the purpose of processing job work goods. 3. The Revenue was of the view that though there was no physical removal of goods, the factum of sale indicates a transfer of ownership of the goods and that certainly amounted to nothing short of physical removal of goods and therefore the appellant ought to have paid the duty along with applicable interest. Alleging contravention of the provisions of Rules,5,6,8,10 and 11 of the Central Excise Rules, 2002 for such nonpayment of duty as well as suppression of the information about the manufacture of tools with intention to evade payment of duty, a notice demanding Rs.44,60,239/- was made invoking the extended period of limitation along with demand of interest and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (Tri. - Ahmd)] (b) Elcon Clipsal India Ltd. vs. Commissioner of Central Excise, Ahmedabad-I [2002 (146) E.L.T. 360 (Tri. - Del.)] (c) Thermax Surface Coatings Ltd. vs. Commr. of C. Ex., Chennai-III [2002 (148) E.L.T. 783 (Tri. - Mumbai)] 8. Learned authorized representative, Shri M Selvakumar, takes us through the findings of the learned appellate authority and reiterates the same. 9. We have heard both sides, bestowed our consideration to the submissions and have also perused the records. 10. The learned appellate authority has rendered his finding in para 7 of the impugned Order in Appeal that the appellant's contention that they are eligible from payment of central excise duty in terms of notification No.67/95 CE dated 16.03.95, is untenable. The reasons given by the learned appellate authority are that the appellant has raised central excise invoices, paid VAT and received tool development charges and thus it cannot be construed that the tools were manufactured and used in the factory alone for captive consumption and hence the benefit of the aforementioned notification claimed is not available to the appellant. He has also rendered a finding that in view of the defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Value Added Tax (CENVAT) on all excisable goods which are produced or manufactured in India. The charging section thus makes it clear that excise duty is on manufacture of excisable goods and not on their sale. What constitutes manufacture also stands defined in Section 2(f) of the Central Excise Act ibid. 15. Sub-rule (1) of Rule 4 of the Central Excise Rules, 2002, among other things, mandates that every person who manufactures any excisable goods or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in Rule 8. Rule 4 also stipulates the prohibition that no excisable goods on which any duty is payable shall be removed without payment of duty from any place where they are produced or manufactured or from a warehouse, unless otherwise permitted. 16. Rule 5 of the Central Excise Rules, 2002 stipulates, inter-alia, that the rate of duty or tariff value applicable to any excisable goods shall be the rate or value in force on the date when such goods are removed from a factory or warehouse and Rule 8 of the Central Excise Rules ibid details, inter-alia, the manner of payment of duty on the goods removed from the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actured in the factory and used within the factory is tenable, given that admittedly there is no physical removal of the said tools from the factory. 21. We are therefore unable to appreciate the learned appellate authority's finding that in view of the definition of sale under Section 2(h) of the Central Excise Act, 1944, there was an obvious transfer of possession of goods by the appellant at the time of sale of tools by the appellant which has to be treated as a deemed removal of tools that attracts payment of duty. In our view such a deemed removal as envisaged by the learned appellate authority with an attendant liability to discharge excise duty, neither flows from the said definition of sale under Section 2(h), nor appears to emanate from the charging section 3 of the Central Excise Act, 1944 in the light of the said definition of sale under Section 2(h). If at all, a proposition that there is a deemed removal of tools by the appellant, that would attract a liability to discharge excise duty, can be rooted in the aforementioned explanation to Rule 5 which mandated that if any excisable goods are used within the factory, the date of removal of such goods shall mean the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved. 24. We find that this Tribunal had in its decision in Elcon Clipsal India Ltd v CCE, Ahemdabad-I, reported in 2002 (146) ELT 360 (Tri-Del), wherein the exemption of notification No.67/95-CE ibid claimed by Elcon Clipsal India Ltd, the appellant therein, was disallowed on the ground that as per invoices raised by the said appellant goods had been sold to M/s.Gerald Industries Pvt Ltd; held as under : "3. We have considered the submissions of both the sides. Notification No. 67/95-C.E. exempts capital goods manufactured in a factory and used within the factory of production. It has not been disputed by the Revenue that the impugned goods were used within the factory of production only. The exemption has been disallowed on the ground that as per the invoices raised by the Appellants the impugned goods had been sold to M/s. Gerald Industries Pvt. Ltd. The Notification is applicable if the Capital goods are used within the factory of production. We agree with the submissions of the learned Advocate that Notification nowhere provides that the use should be on the account of manufacturer. The exemption is available on the basis of place of use i.e. "within the factory of product ..... X X X X Extracts X X X X X X X X Extracts X X X X
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