activities relating to procurement, erection and commissioning of pit and pit less type of electronic Weigh Bridge amounts to manufacture

PJ/Case Laws/2011-12/1206

Case:Ashbee Systems Pvt. Ltd. v/s Commissioner of C. Ex., Delhi-I

Citation: 2011(268) E.L.T. 145 (Del.)

Issue: -Whether the activities relating to procurement, erection and commissioning of pit and pit less type of electronic Weigh Bridge amounts to manufacture and therefore the same is taxable under the Central Excise Act, 1944?

Brief Facts: -Petitioner is a small scale unit engaged in business of procurement, erection and commissioning of pit and pit less type of Electronic Weigh Bridge since 1984. Revenue contended that the said activity amounted to manufacture but the petitioner contended that the said activity did not amount to manufacture.

In appeal, The Tribunal partly dismissed petitioner’s stay application. The Tribunal denied stay of demand of excise duty but granted waiver of interest thereon and penalty including personal penalty imposed on the Director of petitioner. The Tribunal had relied upon the judgments of the Supreme Court in Sirpur Paper Mills Ltd v/s CCE, Hyderabad [1998 (97) ELT 3 (SC)] and Narne Tulaman Manufacturers Pvt Ltd v/s Collector of Central Excise [1988 (38) ELT 566(SC)]. It was held that petitioner had not established a prima facie case.

Hence, Petitioner has filed writ petition before the High Court.

Petitioner’s Contention: -Petitioner contended in their own cases, it had been repeatedly held that the petitioner was not liable to pay excise duty on the activity which amounts to fabrication and commissioning and not manufacture. They also relied upon the Board Circular No. 58/1/2002-CX., dated 15-1-02. They relied upon the following decisions:-

Hindustan Zinc Ltd. v. CCE, 2005 (181) E.L.T. 170 (S.C.)
TTG Industries Ltd. v. CCE, 2004 (167) E.L.T. 501 (S.C.)
Shapoorji Pallonji Co. Ltd. v. Union of India, 2005 (192) E.L.T. 92 (Bom.)
CCE v. Man Structurals Ltd., 2001 (130) E.L.T. 401 (S.C.)

For the contention limitation, reliance is placed on the judgment given in Nizam Sugar Factory v/s CCE [2006 (197) ELT 465 (SC)] and CCE v/s Chennai Petroleum Corp Ltd [2007 (211) ELT 193 (SC)].

Respondent’s Contention: -Revenue relied upon the judgment of the Supreme Court cited at 2010 (252) E.L.T. 481 (S.C.).

Reasoning of Judgment: -The High Court held that the Tribunal had not noticed and taken into consideration the grounds and reasons given by the petitioner including the case laws relied upon by the petitioner. The grounds and reasons including the case law have not been referred to in the impugned order of the Tribunal. Impugned order set aside and matter remanded to the Tribunal for consideration of all the submissions of the petitioner and decide the stay application on merits. No opinion expressed by the High Court on the merits of the case.

Decision: - Appeal disposed of.

Comments:- This is very good decision where in the High Court has directed the tribunal to decide the stay application after seeing the case laws referred by the appellant. Normally the appellate authority as well as the tribunal does not see the cases and pass the order. This decision will be eye-opener for them.

Comments

PJ/Case Laws/2011-12/1206

Post a Comment

Query