M/S. Precast Concrete Factory Vs. Cce Chandigarh - Court Judgment

Excerpt:
1. this appeal has been preferred by the appellants against the impugned order in appeal dated 15.12.98 vide which the commissioner(appeals) had upheld the order in original dated 22.12.97 denying the benefit of exemption notification no.74/93.3. the appellants are engaged in the manufacture of pcc poles, pipes, hollow blocks and cement tiles classifiable under sub-heading 6807.00 of thed ceta. the proceedings were initiated against them of the strength of three show cause notices two dated 16.10.97 and the third dated 30.3.97 vide which they were called upon to pay the duty amount for the period indicated therein, on the ground that they were not entitled to the benefit of exemption notification no.74/93 being not fully government owned unit.they contested the correctness of the notices by alleging that the appellants factory is owned by m/s. j&k minerals ltd. which is a totally government company, but the assistant commissioner did not agree with their contention and confirmed the duty amount through order in original dated 29.12.97 on them. the commissioner when appealed against before him, by the appellants,through the impugned order by following his earlier order dated 27.7.98.6. the learned counsel for the appellants has contended that m/s. j&k minerals ltd.which is running the factory, in the name and style of m/s.precast concrete factory(appellants) is 100% government body and as such the factory must taken to be owned by the government. therefore, the benefit of exemption notification no. 74/94 could not be legally denied which exempted from the whole of the excise duty the goods manufactured/purchased by the factory fully owned by the government and as such the impounded order the commissioner(appeals)deserves to be set aside.7. on the other hand, the learned sdr while refuting this contention of the counsel has argued that there is no material on the record to show that m/s. j&k minerals ltd. a government owned and as such the benefit of the exemption notification had been rightly denied to the appellants. he in support of his contention has placed reliance on neopan industries vs. cce 1994(73) elt 769(sc).8. we have gone through the record. the appellants had taken a specific plea in their reply to the show cause notice that m/s.j&k minerals ltd. is a government company with 100% shares and that company is running the factory in the name of m/s.precast concrete factory(appellants).the learned commissioner(appeals) has not recorded any specific findings in this regard in his not recorded any specific findings in this regard in his impugned order.----- he has simply by relying upon his earlier order dated 27.7.98 rejected the appeal of the appellants. the assistant commissioner, in his order in original, no doubt, took the view that m/s. j&k minerals ltd. is registered under the companies act and as much is an independent independent identity. but he too did not record any findings that it was not fully government owned company, as pleaded by the appellants. moreover his those findings had not been endorsed by the commissioner(appeals)by recording any reasons. the appellants have produced copy of the certificate dated 22.3.96 issued by the commissioner/secretary industries and commerce department, j&k government,wherein he had certified that the precast concrete factory baribrahmana, jammu is wholly state government unit and the assets and liabilities of the unit are responsibilities of the state government.this certificate has altogether been ignored/overlooked by both the authorities.below 9. it is also borne out from the record that initially the appellants were allowed the benefit of the notification in question no.74/93 dated 28.2.93 by accepting it to be j&k government owned unit, as is evident from the letter dated 2.3.94 the assistant commissioner addressed to the appellants. it is not the case of the revenue that this letter was issued under any mistaken belief or on account of incomplete facts before the excise department or that the appellants factory had changed hands from government to private organisation/company. all these facts had been also totally ignored by the authorities below. moreover, if the adjudicating authority or the commissioner (appeals) was not satisfied with the material on record and had any doubt regarding the constitution of m/s.j&k minerals ltd. who was running the appellants factory, the should have afforded opportunity to the appellants to produce all the complete relevant record such as certificate from the competent secretary of the concerned department of the j&k government that m/s. j&k minerals ltd. was wholly owned by the state government, instead of straightaway rejecting their plea and disallowing the benefit of the exemption notification in question.therefore, in our view, the matter deserves to be sent back to the adjudicating authority for fresh decision after affording the appellants, opportunity to place on record the relevant materials/record to substantiate their plea.10. in view of the discussion made above, the impugned order of the commissioner (appeals) is set aside and the matter is sent back to the adjudicating authority for fresh decision in accordance with law in the light of the observations made above after affording opportunity to the appellants to produce evidence, if any, they wished to produce. the appeal of the appellants accordingly stands allowed by way of remand.

Judgment:
1. This appeal has been preferred by the appellants against the impugned order in appeal dated 15.12.98 vide which the Commissioner(Appeals) had upheld the order in original dated 22.12.97 denying the benefit of exemption Notification No.74/93.

3. The appellants are engaged in the manufacture of PCC poles, pipes, hollow blocks and cement tiles classifiable under sub-heading 6807.00 of thed CETA. The proceedings were initiated against them of the strength of three show cause notices two dated 16.10.97 and the third dated 30.3.97 vide which they were called upon to pay the duty amount for the period indicated therein, on the ground that they were not entitled to the benefit of exemption Notification No.74/93 being not fully government owned unit.They contested the correctness of the notices by alleging that the appellants factory is owned by M/s. J&K Minerals Ltd. which is a totally Government company, but the Assistant Commissioner did not agree with their contention and confirmed the duty amount through order in original dated 29.12.97 on them. The Commissioner when appealed against before him, by the appellants,through the impugned order by following his earlier order dated 27.7.98.

6. The learned counsel for the appellants has contended that M/s. J&K Minerals Ltd.which is running the factory, in the name and style of M/s.Precast Concrete Factory(appellants) is 100% Government body and as such the factory must taken to be owned by the Government. Therefore, the benefit of exemption Notification No. 74/94 could not be legally denied which exempted from the whole of the Excise duty the goods manufactured/purchased by the factory fully owned by the Government and as such the impounded order the Commissioner(Appeals)deserves to be set aside.

7. On the other hand, the learned SDR while refuting this contention of the counsel has argued that there is no material on the record to show that M/s. J&K Minerals Ltd. a Government owned and as such the benefit of the exemption notification had been rightly denied to the appellants. He in support of his contention has placed reliance on Neopan Industries Vs. CCE 1994(73) ELT 769(SC).

8. We have gone through the record. The appellants had taken a specific plea in their reply to the show cause notice that M/s.J&K Minerals Ltd. is a Government company with 100% shares and that company is running the factory in the name of M/s.Precast Concrete Factory(appellants).The learned Commissioner(Appeals) has not recorded any specific findings in this regard in his not recorded any specific findings in this regard in his impugned order.----- He has simply by relying upon his earlier order dated 27.7.98 rejected the appeal of the appellants. The Assistant Commissioner, in his order in original, no doubt, took the view that M/s. J&K Minerals Ltd. is registered under the Companies Act and as much is an independent independent identity. But he too did not record any findings that it was not fully Government owned company, as pleaded by the appellants. Moreover his those findings had not been endorsed by the Commissioner(Appeals)by recording any reasons. The appellants have produced copy of the certificate dated 22.3.96 issued by the Commissioner/Secretary Industries and Commerce Department, J&K Government,wherein he had certified that the Precast Concrete Factory BariBrahmana, Jammu is wholly state Government Unit and the assets and liabilities of the unit are responsibilities of the State Government.

This certificate has altogether been ignored/overlooked by both the authorities.below 9. It is also borne out from the record that initially the appellants were allowed the benefit of the notification in question No.74/93 dated 28.2.93 by accepting it to be J&K Government owned unit, as is evident from the letter dated 2.3.94 the Assistant Commissioner addressed to the appellants. It is not the case of the Revenue that this letter was issued under any mistaken belief or on account of incomplete facts before the Excise Department or that the appellants factory had changed hands from Government to Private Organisation/company. All these facts had been also totally ignored by the authorities below. Moreover, if the adjudicating authority or the Commissioner (Appeals) was not satisfied with the material on record and had any doubt regarding the constitution of M/s.J&K Minerals Ltd. who was running the appellants factory, the should have afforded opportunity to the appellants to produce all the complete relevant record such as certificate from the competent Secretary of the concerned department of the J&K Government that M/s. J&K Minerals Ltd. was wholly owned by the State Government, instead of straightaway rejecting their plea and disallowing the benefit of the exemption notification in question.Therefore, in our view, the matter deserves to be sent back to the adjudicating authority for fresh decision after affording the appellants, opportunity to place on record the relevant materials/record to substantiate their plea.

10. In view of the discussion made above, the impugned order of the Commissioner (Appeals) is set aside and the matter is sent back to the adjudicating authority for fresh decision in accordance with law in the light of the observations made above after affording opportunity to the appellants to produce evidence, if any, they wished to produce. The appeal of the appellants accordingly stands allowed by way of remand.