IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

Commissioner of Central Excise, Mumbai-III
V.
Maharashtra Steel Rolling Mills Pvt. Ltd.

EXCISE APPEAL NO. E/1167/07 AND E/CO/234/07
DECIDED ON: 28.01.2008
PRIOR HISTORY: Arising out of Order-in-Appeal No. AT/214/M-III/2007 dated, 14th May 2007 passed by Commissioner of Central Excise (Appeals). Mumbai-I    

Member    
Jyoti Balasundaram (Vice President)

Excise -- Demand -- Manufacture -- Show Cause Notice -- Section 2(f) and 11A of Central Excise Act, 1944 -- Appellant had brought back duty paid goods, into their factory for refining, remaking and reconditioning -- Revenue alleged that impugned goods could not have been rectified and defects removed except by fresh manufacture -- k Show Cause Notice issued for recovery of duty -- Adjudicating Authority dropped the demand holding that such an averment was a bare averment not substantiated with reference to any technical material -- Whether Revenue has enough evidence to show that Appellant had freshly manufactured goods

Held, Revenue has not discharged the burden of establishing that the goods were subjected to fresh manufacture -- As also Revenue had raised new grounds which had not been raised in the Show Cause Notice -- Reveune's appeal rejected,[para 4]

Counsel
For Appellant/Petitioner/Plaintiff: P.K. Katiyar, Authorised Representative (SDR)
For Respondent(s)/Defendant: V.S. Sejpal, Adv.

ORDER

Order No. A/208-209/08/WZB/SMB/C-III  
 Jyoti Balasundaram, Vice President

1.    The Revenue challenges the Order passed by the Commissioner (Appeals) who has accepted the contention of the Assessees herein that they had brought back duty paid goods, i.e. angles, into their factory for refining, remaking f and reconditioning, and not for subjecting them to fresh manufacture, as contended by the excise authorities in the Show Cause Notice proposing recovery of duty on freshly manufactured goods,

2.   I have heard both sides.
   
3.  I find that the Show Cause Notice proposed recovery of duty of Rs. 57,605 from the Respondents herein on the ground that angles could not be rectified and defects could be removed only by subjecting the angles to fresh manufacture. The Adjudicating Authority dropped the proceedings initiated under the Show Cause Notice, holding that such an averment was a bare averment not substantiated with reference to any technical material. Before the Commissioner (Appeals) the Revenue raised a fresh ground, namely, that the angles were subjected to fresh manufacture. After return from their original customers, they were sold to fresh customers and not returned to the same customers to whom the goods had been initially cleared. This is not a ground raised in the Show Cause Notice and further, it is not enough to discharge the burden cast upon the Revenue in such a situation, namely, that fresh manufacture had taken place in the factory of the Assessees. Before the Tribunal the grounds have been further expanded to include a ground that duty was recovered from the customers, which shows that the goods was subjected to a process which amounts to manufacture and that the duty amount was recovered from their customers and, therefore, irrespective of the fact whether the goods were subjected to a process of manufacture or not, the Assessees should have made over the amount collected by way of duty from their customers. These grounds figure for the first time in the appeal before the Tribunal and these are not grounds on which the Show Cause Notice is based.
   
4. Since the Revenue has not discharged the burden of establishing that the goods, viz. angles, were subjected to fresh manufacture, the Orders of the authorities below setting aside the demand and dropping the proceedings initiated in the Show Cause Notice and for recovery of duty on such basis, are required to be sustained. Accordingly, 1 upholds the impugned Order and rejects the appeal. The cross objections are disposed of accordingly.