1. These two revenue appeals arise from two independent Orders-in-Original No. 17 & 18/96 both dated 18.9.96 passed by the CCE Madurai by which he has dropped the proceedings initiated by the department by two independent show cause notices. The department had invoked larger period under Section 11(A) of the C.E. Act and had alleged that the assessee had manufactured and cleared insulated container, FRP sheets, and refrigerating appliances without payment of duty and therefore they are required to be pay the same.
2. Respondents took the defence that they had purchased MS tank and fabricated it under the provisions of Explosives Act so as to store the compressed liquidified gases and the same had been classified under 73.11 and they had paid duty thereon. Thereafter, they took the plea that the activity which they carried out with regard to insulation of PVF and FRP sheets does not amount to manufacture and as no new goods come into existence. After considering all their pleas, the Commissioner upheld the same and dropped the proceedings. However, the Revenue is aggrieved with both the orders and have raised several grounds to contend that what was removed was a different article as the insulation brought into existence a different article than what was in existence. However, for that appellant had utilized the technology etc.
In this context, respondents also had taken several pleas stating that the activity did not change the character of the original tank and had also relied on several judgements. The Commissioner had decided another matter along with these two matters by OIO No. 17/96 of the same date.
In that matter also, revenue had come in appeal. The same was heard by this Bench on 13/9/01 and after due consideration the Tribunal remanded the matter for de novo consideration as the evidence of revenue and assessee had not been fully considered by the Commissioner and the Ld.
Commissioner had not answered various points raised by the revenue and the party.
3. Ld. DR and the Counsel filed copy of the final order No. 1617/2001 dated 13.9.2001 rendered by this Bench in the previous order of the Commissioner in OIO No. 17/96 dated 17.9.96 in which revenue appeal in E/2122/97/MAS wherein the tribunal remanded the case.
4. Ld. DR and the Ld. Counsel seek for similar remand order in this matter also.
5. Ld. Counsel further submits that in appeal E/2500/97 arising from OIO No. 18/96 dated 17.9.96, they have fitted condenser in the MS tank and revenue is contending that the item has become a refrigerating unit which they have contested. He submits that this point is also required to be reconsidered in the light of evidence produced by them.
6. On a careful consideration of the submissions, we notice that the Commissioner had adjudicated three show cause notices and passed three order independently. OIO No. 17/96 was appealed by the department in E/2122/97/Mas which came u for consideration on 13.9.01 before this Bench and by final order No. 1617/01, the matter has been remanded for de novo consideration. The finding recorded by the Tribunal in paras-6 to 8 is reproduced herein below:- 6. On a careful consideration of the submissions and on perusal of the ground which are extracted from the Boards review order, it is seen that all these facts and grounds have not been dealt with by the Commissioner in his order. The evidence and material produced by the Respondents before the Commissioner, which is produced before us also is required to have been examined at length. Such an examination would reveal as to whether a separate identifiable and marketable goods have arisen or not. This is a question of fact which requires examination. On the Board ground made out and on its perusal, we notice that the Ld. Commissioner has been carried away with an impression that what has come into existence is the same tank and that the supplier had supplied them only a pressure vessel.
The Respondents have produced evidence which the Ld. Commissioner has not looked into clearly. Therefore we are of the considered opinion that the matter has to go back to the Commissioner for de novo consideration. The Commissioner shall take all the evidence which has been produced by the Respondents and shall also give an opportunity of hearing to the Respondents to show as to whether they had received pressure vessel and whether the process of re-rubberising or re-lining has changed the characteristics of the supplied tank into a new product. He shall apply the ratio of the Apex Court judgment on this issue and pass a considered detailed order. Thus the appeal is allowed by remand.
7. While agreeing with Ld. Brother for remanding the case back, the contention of the Department that the assessee received naked MS tank which were then fitted with valves, pressure indicators plus insulation of the same with PUF and FRP sheet cladding, without which liquified CO2 cannot be stored in the naked tanks. In as much as the tanks could not be used without insulating them with PUF and FRP sheets, they cannot be held as containers for compressed liquified gas, of iron and steel and therefore merit classification under chapter heading 73.09 as has been rightly done by M/s. Shantha Kamal Engineering Industries Pvt. Ltd. The Department has therefore submitted that the consultant's contention that before the tanks, namely pressure vessels for storage/transport of CO2 liquified gas were actually cleared from the factory of the manufacturers i.e.
Spundish Engineerings, Maharashtra and M/s. Shantha Kamal Engineering Industries Pvt. Ltd., they were in fully finished condition and assessed to duty accordingly is not supported by the facts on record. On the contrary, M/s. SIGGIL, Manali have supplied the safety valve "Mooroco" Ball valve "Amco, safety valve manifold S.S. S.s.s. Pools and "Anco" Ball valve flanged with the handle extension as per packing list Sl. No. 16 dated 30.7.1991 read with Transfer of goods advice of M/s. SIGGIL Manali to M/s. SIGGIL, Tuticorin for the above said 20 Ton M.S. Tank which was thereafter insulated with PUF and FRP sheets and despatched to their Bangalore Depot for the storage/transport of liquid CO2 which will amply testify to the point that the M.S. tanks as received from the fabricator is only a naked M.S. tank incapable of containing CO2 at low temperature, as it were. The Department in their ground of appeal have submitted that there is no evidence of any kind on record to show that the classification of the said tank under Heading 7309 was disputed by M/s. Shantha Kamal Engineering Industries or that the classification was revised at any stage after clearance of the same from their factory.
8. All these facts are required to be examined afresh by the original authority and should take into consideration the evidence produced by the Respondent at the time of personal hearing. With the above observation, I am in agreement with Ld. Brother that the case may be remanded for de novo consideration by the original authority.
7. The impugned order-in-original also raises two issues and has been passed by the Same Commissioner and the assessee is also same. The above ruling of the tribunal will clearly apply to the facts of this appeal also. Therefore, the impugned order is set aside and matter remanded to the Commissioner to reconsider the plea of Revenue and the assessee in respect of appeals in terms of their pleas and readjudicate after granting full opportunity of hearing. Assessee is also entitled to produce evidence which they may choose to do so. With this observation, both the appeals are allowed by remand.