VIDARBHA GRINDERS (P) LTD. Vs. COMMISSIONER OF CENTRAL EXCISE
LAWS(CE)-2015-5-25
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on May 05,2015

Vidarbha Grinders (P) Ltd. Appellant
VERSUS
COMMISSIONER OF CENTRAL EXCISE Respondents

JUDGEMENT

M.V.RAVINDRAN,MEMBER (J) - (1.)WHEN this matter was called out none appeared on behalf of the appellant nor there is any request for adjournment.
Since the appeal is of 2010 we take up the appeal for disposal in the absence of any representative from the assessee.

(2.)HEARD learned D.R.
(3.)AFTER considering the submissions made by the learned D.R. and perusal of the impugned order and Grounds of Appeal, we find that the issue involved in this case is regarding the service tax on the job work converting black bars into bright bars for various clients for which they receive processing charges. The first appellate authority as well as the adjudicating authority had held that the said activity would fall under the category of Business Auxiliary Service holding that conversion of black bars into bright bars is not a manufacturing activity as held by the Hon'ble Apex Court.
We find that the period of dispute in this case is 10.09.2004 to 28.2.2005. It is the case of the appellant that during the relevant period appellant was registered with the Central Excise department as a duty paying unit and was discharging appropriate duty on the black bars manufactured by them and cleared on their account. Due to exigencies of business and in order to utilize the spare capacity, the appellant undertook the conversion of black bars into bright bars on job work basis for an amount received as personal charge. In the entire records we find that the Revenue has not disputed the fact of discharge of excise duty on the very same item manufactured and cleared by the appellant on their account. It is surprising to note that the first appellate authority has not considered this vital submission of the appellant as to when the same goods are manufactured by the same process, how the said process cannot become manufactured out of job working. In our considered view, the self -same activity of conversion of black bars into bright bars on their account and clearance of the same on discharging duty as manufactured product cannot become a non -manufactured product when the appellant undertakes job working for some other clients.

5.1 Yet another angle is that appellant had vide their letter dated 04.01.2005 made a reference to the department, more specifically to Dy. Commissioner of Central Excise, as to whether the process adopted by them would qualify as "production of goods on behalf of clients" as defined under Business Auxiliary Service or it would qualify as manufacture. On bare perusal of the reply to the show -cause notice indicate that there was no response from the department on this query raised by the appellant. The show -cause notice issued in this case is on 13.10.2008 for the period 10.09.2004 to 28.02.2005 which in our view is blatantly time barred and cannot invoke suppression against the appellant.

5.2 In view of the foregoing we hold that the impugned order is unsustainable and liable to be set aside and we do so.

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