FORD INDIA PRIVATE LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of cars and parts thereof. In the precincts of their manufacturing unit (factory), they have what is called "Knock Down Pack Plant" (KDP Plant, for short) wherein they receive rust -proof oil -coated auto components procured directly from vendors and the same along with some components from the factory are stacked together in a pallet according to 'export packing slip' and such pallets are stuffed into containers which are exported to South Africa and Mexico under bond without payment of duty. The entire activities in KDP Plant, right from the receipt of auto components upto export are carried out by an agency viz. M/s. TVS Logistics Ltd. (M/s. TVS, for short) appointed by the appellants. From the scrutiny of records maintained by the appellants as also from the results of subsequent investigations, the department found that they had availed CENVAT credit on the components procured from vendors and exported in the above manner from KDP Plant during the period 7.6.2000 to 31.10.2002. It appeared to the department that the entire activity carried out at KDP Plant was merely a trading activity and, therefore, the components received there from vendors and subsequently exported did not qualify to be 'inputs' for the purpose of CENVAT credit. On this basis, three show -cause notices were issued covering the periods 7.6.2000 to 31.3.2001, 1.4.2001 to 31.12.2001 and 1.1.2002 to 31.10.2002 for recovering from the appellants duty amounts equivalent to the CENVAT credits taken on the components procured from vendors and exported from KDP Plant during the respective periods. These notices invoked the relevant rules relating to CENVAT Credit, which were in force during the respective periods. They also invoked the relevant provisions for levy of interest on the duty demanded as also for imposition of penalty. The proposals in the SCNs were contested by the party. In adjudication of the dispute, the original authority passed three separate orders confirming the demands for the aforesaid periods and imposing penalties on the party. The appellants' alternative claims for rebate of duty were also rejected by the authority in two other separate orders. All these orders of the original authority were taken in appeal to the Commissioner (Appeals), who rejected all the appeals by a common order, which is under challenge in the present appeals.

(2.) THE appellants are challenging only the denial of CENVAT credit and imposition of penalties. In these appeals, they have not raised any grievance against rejection of rebate claim.

(3.) APPEAL No. 622/2004 is against the decision of the appellate Commissioner in the assessee's appeal against Order -in -Original No. 12/2002 dt. 8.3.2002 passed by the original authority in adjudication of SCN No. 23/2001 dt. 4.7.2001 covering the period 7.6.2000 to 31.3.2001. The said Order -in -Original had, inter alia, deleted KDP Plant from the registered factory area of M/s. Ford (India) Ltd., but this part of the order of the original authority was accepted by them. Order -in -Original No. 12/2002 states that the revised ground plan including KDP Plant in the already registered factory premises, which was submitted by the appellants to the jurisdictional Superintendent of Central Excise on 3.4.2000, was approved by the Superintendent believing that there might be some manufacturing activity at KDP Plant. The Asst. Commissioner found that the activities carried out at KDP Plant were merely trading activities and hence the said premises were liable to be deleted from the registered factory premises. Accordingly, in Order -in -Original No. 12/2002 dt. 8.3.2002, he de -registered KDP Plant. In the result, KDP Plant had Central Excise registration upto 8.3.2002 out of the total period of dispute (7.6.2000 to 31.10.2002) involved in these appeals.