M/s. Lakshmi Machine Works Ltd. Versus GST, CCE, Coimbatore
Central Excise
2018 (7) TMI 602 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 22-5-2018
E/42586 – 42587/2017 – 41557-41558/2018
Central Excise
P. DINESHA, Member (Judicial)
Shri A. R. Sreenivasan, Manager, for the appellant
Shri R. Subramaniyam, AC (AR) for the Respondent.
ORDER
The appellant is a holder of Central Excise Registration No. AAACL5244NXM003 for the manufacture of CNC Lathes, Machining Centre and their parts classified under Chapter Sub-heading Nos. 8457, 8458 and 8466 respectively of the schedule to the CETA, 1985. It is the case of the Revenue that during the course of audit of books of accounts of the appellants, the officers of the audit wherein noticed that in addition to its main activity of manufacture of dutiable goods, the appellant was also doing trading activity from its factory premises and it was found to be selling raw materials like furan resins, furring sheets, sepa
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ii) An amount of Rs. 7,49,449/- being the amount equivalent to the specified percentage of the value of clearances of exempted goods during the period from 2011-12 to 2014-15 should not be demanded from them under Rule 14 of CCR read with Section 11A(4)/11A(5) of CEA.
iii) the interest as applicable for the delayed payment of the amount mentioned in Sl.No. (ii) above should not be demanded from them under the provisions of Rule 14 of the CCR read with Rule 6 (3A) (e) of CCR and Section 11AA of CEA.
iv) A penalty under Rule 15(2) of CCR read with Section 11AC of CEA, should not be imposed on them for the said contravention.
2. The appellant filed its detailed reply vide its letter dated 16.04.2016 and it was in the case of the assessee, in nutshell, that they did not have a Trader licence or registration to involve in trading of goods and that they were involved in manufacturing activity alone. Further, they were clearing some inputs as spare parts to their customers and some of the
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uirements of law. It is no doubt true that the appellant did some trading activity but the same was to an extent of a mere 1%, that too which is supplied to its job workers for processing the products. During the course of hearing, he also relied on the orders of this Court in the case of Sister concern of the appellant, in the case of Lakshmi Ring Travellers (Cbe) Ltd. in Final Order No. 42443/2017 dated 27.10.2017, wherein on identical facts this Court has held as under:-
“5. It is brought out from the facts that the appellant has reversed the credit when the inputs are removed as such from the factory. The department has taken the view that such removal amounts to trading and has directed the appellant to expunge the credit to the extent of the value of inputs removed by them. In fact, such removal of inputs from one factory to the sister unit under the excise law by reversing the credit cannot be considered as a trading activity requiring the appellant to reverse the CENVAT credit
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