JAGRITI INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) In these 5 appeals filed by M/s. Jagriti Industries and others arising out of common Order -in -Original No. 1/90, dated 12 -2 -90 the issue involved is whether the goods manufactured by M/s. Jagriti Industries are machine parts as found by the Collector in the impugned Order or castings.

(2.) Shri R. Sudhinder, learned Advocate, submitted that the Appellant firm manufactures Cast Iron Castings, Cast Iron Pipes and Ferrous and Non -ferrous machine parts, etc.; that for the manufacture of Cast Iron Castings they procure duty paid pig iron/iron scrap which is melted in a furnace and the molten metal is poured in a sand mould and is allowed to cool for about 12 hrs. and then removed from the mould after it has acquired the shape of the pattern; that such machine castings are sold by weight; that machine parts are those parts which are manufactured out of castings which are subjected to the process of machining and drilling to make them suitable for use solely and exclusively in a particular machine; that a show cause notice dated 31 -8 -1989 was issued to them for demanding the duty on the ground that the so called crude castings had by their shape, form, design and the description even though in unfinished or incomplete form, assumed the essential character of the finished or complete goods even if they were to be further worked to call them as machinery parts as per Rule 2(a) of the Rules for Interpretation of the Schedule to the Central Excise Tariff Act; that the Commissioner has confirmed the duty for the period 1 -7 -84 to 7 -3 -89 by invoking the provision of extended period of limitation and imposed penalty on all the Appellants. The learned Advocate, further, submitted that the very allegation made in the show cause notice had been specifically gone into years ago and the classification list and RT -12 Returns have been filed since 1975 when the Tariff Item 68 was introduced in the old Central Excise Tariff; that the Member, Central Board of Excise and Customs and then Collector had considered the very question 15 years ago and concluded the issue by deciding that unfinished parts though meant to be fitted in machine were to be regarded as casting because they were in unfinished state and did not have the essential characteristics of machine part; that in their own case the Tribunal vide Final Order No. 1954/2000 -B, dated 15 -12 -2000 [2001 (127) E.L.T. 841 (T)] regarding demand for the subsequent period has held that "in the facts and circumstances of the case there was no justification for invoking the extended period of limitation"; that therefore, the extended period of limitation cannot be made applicable in the present matter also. The learned Advocate also contended that the Appellants whenever they had cleared machine parts they had paid the appropriate duty under Old Tariff Item No. 68 or Chapter 84 of the present Central Excise Tariff; that they had also removed cast iron products and cast iron pipe without payment of Central Excise duty; that while clearing some machine parts described by them as castings to M/s. Daulat Sehkari Sakhar Karkhana Ltd. they had paid duty because they were not mere castings but were machine parts of machine; that this single example had been relied upon by the Revenue to treat all their clearances of cast iron as machine parts; that description machine parts as casting through inadvertence does not prove that all other castings cleared by them were machine parts; that it is settled law that when the assessee is exposed to the penalty consequence the onus of proving the case against him is always with the authority and the citizen is not required to prove his bona fide - Gian Chand v. State of Punjab, 1983 (13) E.L.T. 1365; that in the present matters the Revenue has based its finding on the presumption that they had cleared, without payment of duty, all machine parts in the guise of casting and this presumption is based on one invoice alone; that if there is an ulterior motive on the part of the Appellants in describing the machine parts as casting in the said invoice, there was no necessity for them to pay Central Excise duty. The learned Advocate, therefore, emphasized that the castings cleared on other invoices cannot be treated as machine parts.

(3.) Countering the arguments Shri V. Valte, learned SDR, submitted that in the present matters the Appellants had cleared machine parts in the guise of crude castings and C.I. castings; that on verification of the invoices it was noticed that what they had supplied were machinery parts and not the casting in crude form since the casting so supplied had assumed the form of machine parts by their design, shape, form, description as per the Rules for Interpretation; that it has been observed from the purchase order of M/s. Daulat SSK Ltd. that they had placed order for machinery whereas the Appellant firm in the invoice had described the item of machinery as casting; that this goes to show that they were clearing the machine casting under the guise of casting and had intentionally evaded payment of Central Excise duty. He also emphasized that in all the invoices issued by the Appellants they have described the goods whether machinery parts or crude casting as casting only except in one invoice.