Tata Motors Limited Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. after hearing both sides for some time on the applications for waiver of pre-deposit of duty of rs. 98,85,351/- and penalty of rs. 15 lakhs (in application e/stay-2170/2006 in appeal e/2191/2006) and duty of rs. 19,65,211/- (in application e/stay-2275/2006 in appeal e/2293/2006) we find that it is possible to decide the appeals themselves at this stage and hence proceed to do so with the consent of both sides after granting waiver of pre-deposit and stay of recovery.2. the appellants herein are engaged in the manufacture of motor vehicles and parts thereof falling under chapter 87 of the first schedule to the ceta 1985. 21 show cause notices demanding excise duty for the period 01/07/1989 to 31/08/1994 were issued to the appellants on the ground of: (a) non-admissibility to the benefit of notification 217/86-ce dated 2/04/1986 in respect of forklift trucks manufactured and used captively in the manufacture of their final products; and (b) non availability of modvat credit in respect of inputs utilized for the manufacture of such forklift trucks; and (c) non-admissibility of the benefit of notification 281/86 dated 24/04/1986 in respect of excisable goods produced and used within the workshop of their factory.3. duty demand raised by denial of notification 217/86 was rs. 1,20,937/- and duty demand as a result of denial of notification 281/86 was rs. 19,65,211/-. notices were adjudicated by confirming the duty demands of rs. 19,65,211/- by the dy. commissioner who also imposed a penalty of rs. 40,000/-. the commissioner (appeals) upheld the duty demand, relying upon the tribunal's order no. 192-202/2001-b dated 11/04/2001, however, he set aside the penalty. this gives rise to appeal no. e/2293/2006.4. for the period 01/03/1991 to 28/02/1994, seven show cause notices were issued to the appellants proposing denial of the benefit of notification 217/86-ce dated 02/04/1986, notification 281/86-ce dated 24/04/1986 and notification 220/86 in respect of excisable goods such as jigs and fixtures, etc., produced and used within the factory. the amount demanded by denial of benefit of notification 217/86 was rs. 9,31,044/-; rs. 95,30,536/- on denial of benefit of notification 281/86 and rs. 50,91,551/-on account of denial of benefit of notification 220/86 as superceded by notification 68/92-ce dated 11/06/1991. the additional commissioner of central excise confirmed total demand of rs. 98,85,351/- and imposed a penalty of rs. 24,71,338/- holding that the appellants were not eligible to the benefit of notifications 281/86 and 220/86. the commissioner (appeals) upheld the demand but reduced the penalty to rs. 15 lakhs. this has resulted in appeal no. e/2191/2006.5. we find that tribunal's order no. 192-202/2001-b dated 11/04/2001, relied upon by the commissioner (appeals) in the order impugned in appeal no. e/2293/2006, has been set aside by the apex court by its order dated september 12, 2006 in civil appeal nos. 4473-4476 of 2001 and the case was remitted back to the tribunal for fresh decision. the relevant extract from the apex court decision is reproduced below: (1) whether the appellant was entitled to avail the benefit of exemption under notification no. 217/86-ce; (2) the other point involved in some of the appeals was regarding the availability of the benefit of notification no. 281/86 to the goods manufactured in the workshop within a factory. on the first point, the tribunal on a concession made by the counsel for the parties, set aside the order passed by the commissioner and remanded the matter back to the commissioner for a fresh decision keeping in view the decision of the larger bench of the tribunal in commissioner, central excise, indore v. surya roshni ltd. reported in 2001 (42) elt 817. the finding recorded by the tribunal on this point is not challenged before us and the same has become final. on the second point, the tribunal recorded a finding that the benefit of the notification claimed by the assessee was not available to the assessee in view of the decision of the larger bench in the case of tisco ltd. v. cce, madras wherein the tribunal had held that benefit of the notification is available (i) only for production within the workshop situated within a factory and (ii) used for repairs or maintenance of machinery installed therein. the tribunal with one line concluded the matter against the appellant-assessee by observing "while it is not the case of the assessee that the goods were so used". the tribunal has not recorded a clear finding that the production was not being carried out by the assessee in the workshop situated within the factory or that the goods were being used for repair or maintenance of the machinery installed therein. by cryptic and non-speaking order, the tribunal has upheld the order passed by the commissioner by applying the ratio of the decision of the larger bench in tisco ltd. (supra) without recording a finding of fact that the production carried out by the appellant was not in the workshop situated within the factory or that the goods produced by it were not used for repair or maintenance of the machinery installed therein. it is not sufficient in a judgment to give conclusions alone but it is necessary to give reasons in support of the conclusions arrived at. the finding recorded by the tribunal, being cryptic and non-speaking, is set aside and the case is remitted back to the tribunal for a fresh decision by a speaking order in accordance with law after affording due opportunity to both the parties.6. in view of the above remand order, we set aside the impugned order and remand the case to the jurisdictional commissioner for fresh decision on the admissibility of the benefit of notification 281/86-ce dated 24/04/1986. the issue of admissibility of notification 217/86 is also remitted to the commissioner in the light of tribunal's order no.192-202/2001-b dated 11/04/2001 wherein the tribunal has already remitted the issue to the commissioner for fresh decision in the light of the larger bench decision in commissioner, central excise, indore v.surya roshni ltd. 2001 (42) elt 817. appeal no. e/2293/2006 is thus allowed by way of remand.7. as regards the appeal no. e/2191/2006, wherein the commissioner (appeals) has held that the appellants are not entitled to the benefit of notifications 281/86 and 220/86, since we have already remanded the issue of eligibility to the benefit of notification 281/86 in appeal no. e/2293/2006, in this case also we set aside the denial of notification 281/86 and remand this issue also for fresh decision to the jurisdictional commissioner. as regards notification 220/86, we note that the show cause notice proposing denial of exemption under this notification and its successor notification no. 68/92 has been confirmed by the additional commissioner by following the decision of commissioner (appeals) in order-in-appeal dated 13/12/1994 even though such order has been set aside by the tribunal vide its order no.163-169/2001 dated 03/04/2001. we also note that the main reason for remand by the tribunal in 2001 is because of the plea of the assessee that even if the benefit of notification 220/86 is held to be inadmissible they will be eligible to exemption under notification 217/86-ce since all the items in question are inputs in view of the larger bench decision in union carbide india ltd. v. cce 1998 (86) elt 613 and cce v. surya roshni ltd. . therefore the impugned order of the commissioner (appeals) upholding the order of the additional commissioner relying upon the commissioner (appeals) order dated 13/12/1994 which has been set aside by the tribunal vide its order dated 03/04/2001 cannot be sustained and the issue of eligibility to the benefit of notification 220/86 or in the alternative to the benefit of notification 217/86 is to be considered afresh. we therefore set aside the denial of the benefit of notification 220/86 and remand this case also to the jurisdictional commissioner. fresh orders shall be passed after extending reasonable opportunity of hearing to the assessees. thus, the appeal is allowed by way of remand.8. in the result we set aside the impugned orders and allow both the appeals by way of remand.

Judgment:
1. After hearing both sides for some time on the applications for waiver of pre-deposit of duty of Rs. 98,85,351/- and penalty of Rs. 15 lakhs (in Application E/Stay-2170/2006 in appeal E/2191/2006) and duty of Rs. 19,65,211/- (in Application E/Stay-2275/2006 in appeal E/2293/2006) we find that it is possible to decide the appeals themselves at this stage and hence proceed to do so with the consent of both sides after granting waiver of pre-deposit and stay of recovery.

2. The appellants herein are engaged in the manufacture of motor vehicles and parts thereof falling under Chapter 87 of the First Schedule to the CETA 1985. 21 Show cause notices demanding excise duty for the period 01/07/1989 to 31/08/1994 were issued to the appellants on the ground of: (a) non-admissibility to the benefit of Notification 217/86-CE dated 2/04/1986 in respect of forklift trucks manufactured and used captively in the manufacture of their final products; and (b) Non availability of modvat credit in respect of inputs utilized for the manufacture of such forklift trucks; and (c) Non-admissibility of the benefit of Notification 281/86 dated 24/04/1986 in respect of excisable goods produced and used within the workshop of their factory.

3. Duty demand raised by denial of Notification 217/86 was Rs. 1,20,937/- and duty demand as a result of denial of Notification 281/86 was Rs. 19,65,211/-. Notices were adjudicated by confirming the duty demands Of Rs. 19,65,211/- by the Dy. Commissioner who also imposed a penalty of Rs. 40,000/-. The Commissioner (Appeals) upheld the duty demand, relying upon the Tribunal's order No. 192-202/2001-B dated 11/04/2001, however, he set aside the penalty. This gives rise to appeal No. E/2293/2006.

4. For the period 01/03/1991 to 28/02/1994, seven show cause notices were issued to the appellants proposing denial of the benefit of Notification 217/86-CE dated 02/04/1986, Notification 281/86-CE dated 24/04/1986 and Notification 220/86 in respect of excisable goods such as jigs and fixtures, etc., produced and used within the factory. The amount demanded by denial of benefit of Notification 217/86 was Rs. 9,31,044/-; Rs. 95,30,536/- on denial of benefit of Notification 281/86 and Rs. 50,91,551/-on account of denial of benefit of Notification 220/86 as superceded by Notification 68/92-CE dated 11/06/1991. The Additional Commissioner of Central Excise confirmed total demand of Rs. 98,85,351/- and imposed a penalty of Rs. 24,71,338/- holding that the appellants were not eligible to the benefit of Notifications 281/86 and 220/86. The Commissioner (Appeals) upheld the demand but reduced the penalty to Rs. 15 lakhs. This has resulted in appeal No. E/2191/2006.

5. We find that Tribunal's order No. 192-202/2001-B dated 11/04/2001, relied upon by the Commissioner (Appeals) in the order impugned in appeal No. E/2293/2006, has been set aside by the apex Court by its order dated September 12, 2006 in Civil Appeal Nos. 4473-4476 of 2001 and the case was remitted back to the Tribunal for fresh decision. The relevant extract from the apex Court decision is reproduced below: (1) Whether the appellant was entitled to avail the benefit of exemption under Notification No. 217/86-CE; (2) The other point involved in some of the appeals was regarding the availability of the benefit of Notification No. 281/86 to the goods manufactured in the workshop within a factory.

On the first point, the Tribunal on a concession made by the counsel for the parties, set aside the order passed by the Commissioner and remanded the matter back to the Commissioner for a fresh decision keeping in view the decision of the larger Bench of the Tribunal in Commissioner, Central Excise, Indore v. Surya Roshni Ltd. reported in 2001 (42) ELT 817. The finding recorded by the Tribunal on this point is not challenged before us and the same has become final.

On the second point, the Tribunal recorded a finding that the benefit of the notification claimed by the assessee was not available to the assessee in view of the decision of the larger Bench in the case of TISCO Ltd. v. CCE, Madras wherein the Tribunal had held that benefit of the notification is available (i) only for production within the workshop situated within a factory and (ii) used for repairs or maintenance of machinery installed therein.

The Tribunal with one line concluded the matter against the appellant-assessee by observing "while it is not the case of the assessee that the goods were so used". The Tribunal has not recorded a clear finding that the production was not being carried out by the assessee in the workshop situated within the factory or that the goods were being used for repair or maintenance of the machinery installed therein. By cryptic and non-speaking order, the Tribunal has upheld the order passed by the Commissioner by applying the ratio of the decision of the larger Bench in TISCO LTD. (supra) without recording a finding of fact that the production carried out by the appellant was not in the workshop situated within the factory or that the goods produced by it were not used for repair or maintenance of the machinery installed therein. It is not sufficient in a judgment to give conclusions alone but it is necessary to give reasons in support of the conclusions arrived at. The finding recorded by the Tribunal, being cryptic and non-speaking, is set aside and the case is remitted back to the Tribunal for a fresh decision by a speaking order in accordance with law after affording due opportunity to both the parties.

6. In view of the above remand order, we set aside the impugned order and remand the case to the jurisdictional Commissioner for fresh decision on the admissibility of the benefit of Notification 281/86-CE dated 24/04/1986. The issue of admissibility of Notification 217/86 is also remitted to the Commissioner in the light of Tribunal's order No.192-202/2001-B dated 11/04/2001 wherein the Tribunal has already remitted the issue to the Commissioner for fresh decision in the light of the larger bench decision in Commissioner, Central Excise, Indore v.Surya Roshni Ltd. 2001 (42) ELT 817. Appeal No. E/2293/2006 is thus allowed by way of remand.

7. As regards the Appeal No. E/2191/2006, wherein the Commissioner (Appeals) has held that the appellants are not entitled to the benefit of Notifications 281/86 and 220/86, since we have already remanded the issue of eligibility to the benefit of Notification 281/86 in Appeal No. E/2293/2006, in this case also we set aside the denial of Notification 281/86 and remand this issue also for fresh decision to the jurisdictional Commissioner. As regards Notification 220/86, we note that the show cause notice proposing denial of exemption under this notification and its successor Notification No. 68/92 has been confirmed by the Additional Commissioner by following the decision of Commissioner (Appeals) in order-in-appeal dated 13/12/1994 even though such order has been set aside by the Tribunal vide its order No.163-169/2001 dated 03/04/2001. We also note that the main reason for remand by the Tribunal in 2001 is because of the plea of the assessee that even if the benefit of Notification 220/86 is held to be inadmissible they will be eligible to exemption under Notification 217/86-CE since all the items in question are inputs in view of the larger bench decision in Union Carbide India Ltd. v. CCE 1998 (86) ELT 613 and CCE v. Surya Roshni Ltd. . Therefore the impugned order of the Commissioner (Appeals) upholding the order of the Additional Commissioner relying upon the Commissioner (Appeals) order dated 13/12/1994 which has been set aside by the Tribunal vide its order dated 03/04/2001 cannot be sustained and the issue of eligibility to the benefit of Notification 220/86 or in the alternative to the benefit of Notification 217/86 is to be considered afresh. We therefore set aside the denial of the benefit of Notification 220/86 and remand this case also to the jurisdictional Commissioner. Fresh orders shall be passed after extending reasonable opportunity of hearing to the assessees. Thus, the appeal is allowed by way of remand.

8. In the result we set aside the impugned orders and allow both the appeals by way of remand.