K.R. ENGG. WORKS Vs. CCE

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s K.R. Engineering Works is whether the exemption under Notification No. 144/88 -CE., dated 18 -4 -1988 is available to the goods manufactured by them and whether duty of excise is payable by them on the goods manufactured by them on job work basis.

(2.) BRIEFLY stated facts are that on the basis of intelligence that the appellants were engaged in manufacturing goods on job basis out of raw materials supplied by their customers without maintaining proper records and were clearing the same without payment of excise duty, the Central Excise Officers visited their factory premises and seized certain records. A show -cause notice dated 27 -5 -92 was issued to them for demanding Central Excise duty amounting to Rs. 5,72,686.77 P. for the period 1988 -89 and 1990 -91 and for imposing penalty. The Collector, under the impugned Order dated 23.3.1993, confirmed tho demand of duty Rs. 3,00,94.43 and imposed a penalty of Rs. 30,000, holding that the benefit of Notification No. 144/88 was not available as the condition specified in the Notification that the transmission and allied assemblies were intended to be supplied to Ordnance factory Medak for the manufacture of Infantry Combat Vehicle was not satisfied as they had supplied the goods to M/s BEML. He relied upon the decision in Andhra Pradesh Lightings v. CCE and Graver and Well (I) v. CCE . The Collector also held that extended period of limitation is invokable and penalty is imposable as the Appellants had neither adopted any procedure for the receipt of raw materials and return of the finished goods nor had they paid any duty. The Collector included the value of goods manufactured and cleared on job basis to M/s NSTL, M/s Galaxy Switch Gears and Allied Industries, M/s Southern Electronics, M/s Kirloskar Electric Company, M/s Vindtek, M/s Arvind Foundry, M/s BEML, KGF, R.D. Pune, M/s Shivamani Industries and M/s Tata Electronics Development Services, M/s Machine tool Builders, M/s Hindustan Motors.

(3.) THE Appellants have filed Misc Application No. 743/99 -B1 for raising a new plea of marketability of the products manufactured by them on job work basis. Shri R. Krishnan, the learned Advocate, submitted that the Appellants have pleaded in the present appeal that there was no manufacture involved so as to justify the demand; that at the time of filing the appeal, they could not produce any material in support of the grounds as to absence of marketability of the items; that they had obtained a letter dated 21.3.94, after filing the present appeal, from BEML regarding the further operations they had to carry out on the job worked item at their end before they could be treated eligible for fitment on the Assembly; that this letter also re -inforces (sic) [re -inforces] the plea tat the items were not marketable; that the Tribunal had permitted the issue of marketability to be raised before it in Sudershan Plywood Industries v. CCE Shillong and in the case of Wiegand India (P) Ltd. v. CCE , the issue of dutiability was allowed to be raised as it goes to the root of the matter. The Learned DR, Shri M.P. Singh has objected to the allowing of the new ground by submitting that marketability is a matter of fact and not a question of law, that the Appeflants wants to raise a new ground on the basis of material which is not available on record and as such Misc Application, is bound to be rejected. He, further, submitted that the evidence created after commencement of proceeding cannot be taken on record. He relied upon the decision in Auto Stars v. Collector of Customs wherein it was observed that additional evidence in the Appellate Court can be adduced provided lower authorities have refused to admit evidence which ought to have been admitted; that the party establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or that Appellate Court requires a document to be adduced to enable it to pronounce judgment or any other substantial cause. The Tribunal held as under: