The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), ruled that additional premise is extension of factory and quashed demand of duty on transfer of capital goods.
The appellant, Jyoti CNC Automation Pvt Ltd is engaged in manufacturing of excisable goods like CNC turning centre, Vertical Machining Centre (VMC), SPM machine and horizontal machine falling under Chapter 84 of the Central Excise Tariff Act, 1985 at its factory which is registered under the provisions of the Central Excise Act, 1944.
During the period 2006-07 to 2010-11, the appellant manufactured five machines namely VMC and SX04 at its factory for captive use. Due to space constraint the appellant transferred under invoice; endorsing transfer under Notification No. 67/95-CE, the said machines to its additional premise owned and controlled by the appellant situated about 500 metres away from the appellant’s factory.
At the said additional premise, the appellant, utilizing the said machines carried out work of manufacturing parts of machinery. Such parts were received back to the appellant’s factory for use in the manufacturing of final products. Such final products manufactured were thereafter cleared from the appellant’s factory on payment of applicable central excise duty.
The Counsel appearing for the appellant argued that the additional premise of the appellant is to be treated as part or extension of the factory of the appellant in view of definition of “Factory” in terms of section 2(e) of the Central Excise Act, 1944, hence Notification No. 67/95-CE applies to the five machines transferred to appellant’s own premise.
A Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The additional premise is an extension of factory of the appellant and hence benefit of notificationno. 67/95-CE cannot be denied to the appellant. In the circumstances, demand of duty on transfer of such capital goods on the ground that the other premise is to be treated as separate premise requiring separate registration under the Act is not tenable.”
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