2018-TIOL-2103-CESTAT-BANG

Hmt Watches Ltd Vs CCE

CX - Assessee was alleged to have been engaged in activities of procurement from vendors, assembling, testing and installation of tower clocks for municipal and other organisations - It was alleged that they were directly negotiating with customers regarding cost, erection and commissioning charges and the sale proceeds are deposited to their marketing division - Original adjudicating authority has relied upon an investigation report and an opportunity was not given to assessee to put forth their defence - Appellate authority has also not considered the non-supply of copy of report as no violation of principles of natural justic - The investigation report being very critical to the conclusions of adjudicating authority, an opportunity should have been given to assessee and any denial of such opportunity is a clear violation of principles of natural justice - It was held in case of Oriental Carbon & Chemicals 2016-TIOL-3284-CESTAT-ALL that the evidence collected by Commissioner beyond the back of assessee cannot be relied upon and same has got no evidential value in absence of giving proper opportunity to object or explain the same - Coming to the question whether the assessee's activities in the clock tower amounts to manufacture, assessee contended that they do not actually procure and supply any parts or components of tower clocks; they actually place orders on various vendors for manufacture and supply directly to customers' site and the same are installed at the site by customer himself - The role of assessee was only to supervise, testing of some electrical components and supervision of installation - This very Bench in case of Trident Interwood Pvt. Ltd. 2009-TIOL-1749-CESTAT-BANG has held that basing on principles laid down by Supreme Court on cannibalization that the kitchen units installed in one premise cannot be dismantled ‘as such' and moved to another place as they are custom designed - The dimension of one cabinet may not be the same of the other - The cabinet unit designed for one flat may not be suitable for another flat where the dimensions are different - Issue is pari materia to the above decision as each clock tower is a separate entity and the clock designed for one tower cannot be dismantled and moved and fitted to any other tower without cannibalization - Appeal succeeds on the issue of merits as well as on principles of natural justice: CESTAT - Appeal allowed : BANGALORE CESTAT

2018-TIOL-2102-CESTAT-DEL

Refracast Metallurgical Pvt Ltd Vs CCE & ST

CX- The assessee is engaged in manufacture of Ferro-alloys and synthetic slab - On audit, it was observed that the assessee did not use Aluminium and Aluminium articles in the manufacture of finished excisable goods - The Revenue took a view that there was shortage of various finished goods and excess unaccounted stock of finished goods on the premises of assessee - Duty demand was raised - The adjudicatiing authorities rejected refund of Cenvat credit to the assessee and imposed penalty - Hence, the present appeal.

Held - The document relied upon by both the parties is the table of consumption of the spent catalyst in production of Ferro-alloy - The quantity of aluminium used is shown as maximum, which is sufficient to hold that during this period, only aluminium rods were used as the spent catalyst - Moreover, from the statement of witnessess the contention of assessee about using aluminium rods only at one particular time and various other aluminium products as the spent catalyst at subsequent time is clarified - The variation in aluminium consumption at the different times such as sections, wires, rolled products had higher cross sectional dimensions, due to which it is difficult to introduce these products at the bottom of the furnace - The aluminium materials were purchased by the assessee as the raw material (spent catalyst) for his final product (Ferro-alloy) - Therefore, there is nothing on record that would justify that this is not the input under Section 2(K) of CCR - Hence, the order challenged is set aside : CESTAT (Para 2, 5, 6) - Appeal allowed : DELHI CESTAT

2018-TIOL-2101-CESTAT-DEL

Orient Ispat Pvt Ltd Vs CCE & ST

CX- The assessee are engaged in the manufacture of HR strips and M. S. Flats - The Department noticed that sale of finished goods to assessee related units/ interconnected units - It was also found that the rate of goods sold by them to PSSTL/ BAI are lower than the rate of goods sold by them to outsiders - On audit, the assessee was asked to produce records, statutory or private showing the size wise production, clearance of stock of their finished products but the same were not produced by them - Duty demand was raised and the original authority confirmed the demand of central excise duty - A SCN was issued by invoking extended period of 5 years of limitation - Hence, the present appeal.

Held - In the present case, the issue involved is as to whether the sale by the assessee to PSSTL and BAI can be treated as sales to "Related Person" - The balance sheet, annual report, tax audit report of the assessee reveals that parties are related persons - All three company's key managerial positions is held by the assessee and the mutuality of interest amongst each other and the interest, directly and indirectly in each other's business is clearly evidenced - In addition, no extended period can be invoked as suppression of facts with an intention to evade payment has not been proven -Although the demand is for the period February, 2009 to August, 2013, the Show Cause Notice was issued only on 05.03.2014 as a result of an audit that took place in the year 2010 - Therefore, the assessee is liable to pay the demand only for one year on the basis of price charged to un-related buyers by resorting to Rule 11 read with Rules 4 of Valuation Rules - Hence, the demand is set aside and matter is remanded for calculation of demand for the period mentioned : CESTAT (Para 1, 9, 10, 11, 12) - Matter remanded : DELHI CESTAT