The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal(CESTAT) quashed the order passed by the Commissioner of Central Excise for the issuance of show cause notice after the expiry of time limit.
M/s. Same Deutz – Fahr India (P) Ltd, the appellant assessee was an Export Oriented Unit (EOU) and is engaged in the manufacturers of tractors and parts thereof falling under Chapter 87 of the Central Excise Tariff Act, 1985.
The issue against the assessee was that they were in collusion with M/s. Amul Industries Pvt. Ltd. (Amul) their job worker and cleared 3 Mekino Horizontal Machining centres imported by Amul their job worker, without paying duties of customs and the matter was adjudicated by the proper officer and the Commissioner confirmed the demand for duty to the assessee in the ex-bond Shipping Bill, along with interest and penalties.
The assessee appealed against the order passed by the Commissioner of Central Excise for the payment of duty.
Smt. J. Ragini, the counsel for the assessee contended that the Amul had their premises within the Export oriented unit and that a lease was not defined by rent alone. It was also submitted that all operations inside the bonded warehouse were with the knowledge of officers and the Show Cause Notice was issued on the last day of the five years without any justification, thus the demand can be made only against Amul who was the person liable to pay duty.
Ms. K. Komathi, the counsel for the respondent contended that the assessee had wrongly availed of the duty exemption without fulfilling the conditions and had misdeclared their relationship with Amul. It was also submitted that the revenue had invoked the extended time limit for the issue of show cause notice to suppress these facts.
The bench observed that the promise for interest-free financing of the machining facility and tooling and fixtures by the assessee to Amul and the free cost of space given by the assessee to run the machines within the export-oriented unit premises showed that there was adequate consideration.
The two-member bench comprising of Shri. Sulekha Beevi C.S., Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) held that the department was not justified in invoking the larger time limit for the issuance of show cause notice while allowing the appeal filed by the assessee.
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