Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   CBIC issues draft rules for Customs valuation *  Top Headlines: Threshold for Benami deals, green bond investors, and more *  Govt aims 1-hour clearance for goods at all ports *  Exporters Allowed To Use RoDTEP, RoSCTL Scrips To Pay Customs Duty, Transfer Them; Rules Amended *  Millions of labourers to be affected by brick producers’ strike over hike in GST, coal rates *  Inauguration of ‘kendriya GST parisar’ *  Transporter can seek Release of Conveyance alone, not Goods under GST Act: Madras HC *  GST: Quoting of DIN Mandatory for Responding to Notice, Govt Modifies Portal *  Firms can soon file claims for GST credits of ?400 cr *  CBIC issues modalities for filing transitional credit under GST. *  Mumbai: Man creates 36 fake GST firms, arrested for input tax credit fraud of Rs 23 cr *  Report to restructure Commerce Ministry under study; idea is to set up trade promotion body: Goyal *  Firms can soon file claims for GST credits of ?400 cr *  Gambling Alert! Govt May Levy Up To 28% GST; UP, Bengal Back Move *  EPFO backs raising retirement age to ease pressure on pension funds *  India Moving Up Power Scale, Set to Become Third Largest Economy By 2030 *  Airfares Get Expensive: What Changes for Flyers From Today? *  IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. *  IBC prevails over Customs Act, says Supreme Court. *  As GST enters sixth year, a time for evaluation and reassessment *  There’s GST on daily essentials as Centre needs money to buy MLAs: Arvind Kejriwal *  Now, GST on cancellation of confirmed train tickets, hotel bookings *  GST kitty for top States could rise 20% in FY23, says Crisil *  French customs officials seize another cargo vessel over Russia sanctions *  TradeLens builds on Asia momentum with Pakistan Customs deal *  Hike tax on tobacco, reduce affordability & increase revenue: Civil society organizations to GST council *  Bihar: ?10 crore tax evasion on tobacco products detected in raids *  Centre failed on GST, COVID; would it be anti-national? Rajan on Infosys row *  Service Tax not Chargeable on Income Tax TDS portion paid by recipient: CESTAT grants relief to TVS *  Foreign portfolio investors make net investment of Rs 7575cr in Sep so far
Subject News *  Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr *   GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover *   Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court *   CBIC Issues Clarification On Extended Timelines For GST Compliance *   CBIC Issues Clarification On Extended Timelines For GST Compliance *  Budget 2023- 9.6 crore gas connections *  GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings *  GST: CBIC Extends Last Date for filing of ITC *  GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time *  Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. *  Hike in GST rates fuels inflation *  Assam: CBI arrests GST commissioner in Guwahati *  GST fraud worth ?824cr by 15 insurance Cos detected *  India proposes 15% customs duties on 22 items imported from UK *  Decriminalising certain offences under GST on cards *  Surge in GST collections more due to higher inflation: India Ratings *  MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India *   Solar projects awarded before customs duty change allowed cost pass-through *  Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty *   GST revenue in September likely at Rs 1.45 lakh crore *  Govt working on decriminalising certain offences under GST, lower compounding charge *  Building an institution like GST Council takes time, trashing is easy: Sitharaman *  GST collections in Sept may touch ?1.5 lakh crore *  KTR asks Centre to withdraw GST on handlooms *  After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims *  Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment *  Threshold for criminal offences under GST law may be raised *  Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore *  CBIC clarifies Classification of Cranes for GST, Customs Duty *  Customs seize gold hidden in bicycle in Kerala airport  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1340

Assembling of CKD photocopiers in warehouses situated at Hyderabad and Rampur – whether amounts to manufacture

Case: XEROX INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT-II
 
Citation: 2011 (270) E.L.T. 651 (All.)
 
Issue:- Assembling of CKD photocopiers in warehouses situated at Hyderabad and Rampur – whether amounts to manufacture – Bangalore Tribunal holding that no manufacturing involved - Delhi Tribunal taking different view – whether sustainable.
 
Brief Facts:- Appellant were importing photocopier machines in Completely knocked down condition (CKD) and where storing the same in their warehouses. The major component called “work centre” and other parts (modules) were received in separate packing. The modules were fitted to the work centre and were dispatched from the warehouses at Hyderabad in original packing.  Appellants undertook the process of kitting in the warehouse.
 
Department issued show cause notice demanding payment of excise duty on the ground that the appellant were undertaking process which amounted to manufacturing activity and excise duty was payable on the same.
 
In appellant’s own case, the Bangalore Tribunal vacated the demand and penalty on the company vide final order dated 09.11.2009 reported at 2010 (252) ELT 273 (Tri-Bang). It was held that appellant did not carry any activity which amounted to manufacture. The components received in sets were cleared as such and there was no conversion of an incomplete machine into complete machine. The assembly of components into photocopiers took place at the premises of the respective buyers.
 
For the same period and same activity, show cause notice was issued to the appellant for the warehouse situated at Meerut. The issue came before the Delhi Tribunal. The judgment delivered by the Bangalore Tribunal was placed before the Delhi Tribunal.
 
By the order dated 30-11-2010 [2011 (270) E.L.T. 395 (Tri. -Del.)], the Tribunal at Delhi for the same period on identi­cal notice and issue, upheld the demand of duty with interest.
 
Against the judgment of the Delhi Tribunal, appellant filed appeal before the High Court.
 
Appellant’s Contention:- Appellant submit that on the same facts and notices, the Delhi Tribunal could not have come to different conclusion especially when the opinion expressed by the CESTAT, Bangalore was placed before the CESTAT, New Delhi.
 
Appellant relied upon decision of the Su­preme Court in Gammon India Ltd. v. Commissioner of Customs, Mumbai [2011 (269) E.L.T. 289 (S.C.)], in which similar situation has occurred. The Supreme Court had held that if a bench of a Tribunal, in identical fact situation, is permitted to come to a conclusion directly opposed to the conclusion reached by another Bench of the Tribunal on earlier occasion, that will be destructive of the institutional integrity itself. It was held that if a bench of the Tribunal wishes to take a view different from the one taken by the earlier bench, the propriety demands that it should place the matter before the President of the Tribunal so that the case is referred to a Larger Bench, for which provision exists in the Act itseld.
 
In the facts and circumstances, in which a similar notices and same facts and evidence was involved, the only course open to CESTAT, New Delhi, if it wanted to dis­agree with the opinion of CESTAT, Bangalore, was to refer the matter to a Larger Bench.
 
Respondent’s Contention:- Revenue contended that both the Adjudicating Authorities acted in their own territorial jurisdic­tion, and that the CESTAT, New Delhi, levied duty and penalty on the facts and evidence, as they were placed and as considered by the adjudicating authority. He submits that there is nothing wrong in the judgement of the CESTAT, New Delhi, where it discarded the contention of the appellant, after considering the reasons given by CESTAT, Bangalore, that the activities of the Company will fall within the meaning of manufacturing.
 
Reasoning of Judgment:- The High Court found that there are contrary opinions expressed by the Tribunals on the same facts and evidence, which were placed before them. Even if the CESTAT, New Delhi did not agree with the reasoning given by the CESTAT, Bangalore, in similar proceedings on the same facts, it should have followed the practice of referring the matter to a Larger Bench. Apart from institutional integrity, the High Court also find that the same Company, in respect of same period in the same activities, could not be subjected to different opinions expressed by the Tribunal, causing doubts and confusion over the liability. Such, conflicting opinions by different benches of the Tribunal are not conducive to business and trade and can cause adverse effect on the economy of the country.
 
The Supreme Court in Gammon India Ltd. had relied upon three Judges Bench of the Supreme Court in Sub-Inspector Rooplal and Another v. Lt. Governor & Others [2000 (1) SCC 6441], in which it was held that a Coordinate Bench of a Court cannot pronounce judgment contrary to declaration of law made by another Bench. It can only refer it to a Larger Bench.
 
For the reasons given above, the High Court set aside the order of the Tribunal, and remitted the matter back to the Tribunal to decide the matter in accor­dance with law.
 
Decision:- Appeal allowed by way of remand.
Comment:- The same bench sitting at different places cannot take contrary decisions. If a bench of same strength do not agree with the decision of other bench then option available to the assessee is to remand the matter to larger bench. They cannot take the contrary decision. The High Court has rightly set aside the order and remanded the matter to tribunal once again.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com