A. Ganesan Versus Commissioner of GST & Central Excise Chennai North Commissionerate
Central Excise
2018 (10) TMI 635 – ITAT CHENNAI – TMI
ITAT CHENNAI – AT
Dated:- 8-10-2018
E\/239\/2009 – 42528\/2018
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
\nFor the Appellant : Shri S. Jaikumar, Advocate
\nFor the Respondent : Shri A. Cletus, Addl. Commissioner (AR)
\nORDER
\nPER BENCH
\nBrief facts are that the appellant is the Proprietor of M\/s.Lakshmi Scaff situated at Ambattur, Chennai and M\/s. Vel Scaff situated at Balaji Nagar, Ambattur, Chennai. These firms were not registered with the Central Excise Department. Based on the information received, the Preventive Unit of Central Excise visited the factory premises of both M\/s. Lakshmi Scaff and M\/s. Vel Scaff on 8.12.2006. During the course of visit, the officers noticed that in addition to sale of scaffoldings \/ propping equipments, these firms had also undertaken m<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n re the Tribunal. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n partment also cross examined these persons but proved nothing contrary to the above. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t. The department has vaguely alleged that the appellant suppressed the fact of the manufacture and had intention to evade payment of excise duty. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rnover of the goods supplied which exceeds more than one crore in a year is manufactured by the appellant. The contention of the appellant that they have engaged job workers to manufacture the goods is only an afterthought after issue of the show cause notice. He relied upon the statement of Shri A. Ganesan and argued that in the statement dated 8.12.2006, he has admitted that they were manufacturing and supplying scaffoldings \/ propping equipments on job work basis. In fact, the construction companies had given order to the appellant for manufacturing the goods which is very much clear from the statements recorded at the time of inspection. The contention of the appellant that they have supplied the raw materials to job workers who had in fact manufactured the finished goods has been proved to be false by the very fact that many of the job workers given in the list provided by the appellant did not exist at all. On investigation conducted by the investigative team, as per the directio<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s are manufactured by the job workers. On perusal of records, we find that there is no mahazar drawn up to show that there were any machinery at the premises at the time of inspection. It is also not noted anywhere whether there were raw materials or finished products in the said premises of M\/s. Lakshmi Scaff and Vel Scaff on the date of inspection i.e. 8.12.2006. If the department had conducted inspection in the premises, they should have drawn up a mahazar showing the stock of raw materials and finished products lying in the premises. So also the activities carried out in the premises should reflect in the documents prepared at the time of inspection. There is nothing before us to show that there were machines in the premises or raw materials and finished products. The appellants contend that they were only suppliers to the construction companies and the premises were used as godown only. The appellant has furnished a certificate of the concerned Village Officer in which it is state<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t these activities \/ operations. Though the operations may be less complicated but it is essential for a manufacturer to have certain machines to carry out these operations. Mere fact that there were no machines in the premises at the time of inspection would lead to the strong inference that the appellant has not carried out any manufacturing activity in both the premises. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ot indicate anything clearly to show that the appellant has himself manufactured the goods. In para 12 of the impugned order, the adjudicating authority notes that no panchanama was drawn on the date of inspection to reflect the activities if any carried out in the premises. The said para is reproduced as under:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e clear details as to whether he engaged in manufacture of impugned goods. From such statement, not supported by any document, the adjudicating authority has vaguely presumed that Shri A. Ganesan has manufactured the impugned goods. In our view, the statement given by Shri A. Ganesan does not put forth any evidence that he has manufactured such goods. In para 22, the adjudicating authority has noted as under:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" A. Ganesan Versus Commissioner of GST & Central Excise Chennai North CommissionerateCentral Excise2018 (10) TMI 635 – ITAT CHENNAI – TMIITAT CHENNAI – ATDated:- 8-10-2018E\/239\/2009 – 42528\/2018Central ExciseMs. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) For the Appellant : Shri S. Jaikumar, Advocate For the Respondent : Shri A. Cletus, … Continue reading “A. Ganesan Versus Commissioner of GST & Central Excise Chennai North Commissionerate”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-14442","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14442"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14442\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n2. On behalf of the appellant, ld. counsel Shri S. Jaikumar appeared and argued the matter. His submissions can be broadly summarized as under:-
\n2.1 That the manufacturing of scaffolding\/shuttering etc., was carried out through independent job workers after procuring purchase orders for such items from the customers.
\n2.2 The appellant concern being proprietary concern does not have any machinery and facility to manufacture any of the items in question. There is no allegation in the entire notice that the appellant possesses required machineries for manufacture of the above items;
\n2.3 No panchanama was drawn evidencing machineries available at appellant's premises for manufacture for goods such as drilling machine, shuttering machine, welding machine, cutting machine etc., and further the adjudicating authority has recorded in the impugned order that there was lacuna in the investigation as establishing the presence of machinery in appellant's premises.
\n2.4 In para<\/p>\n
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\n2.6 Appellant submitted letters obtained from land owners where the appellants' office are situated, who confirmed that the premises was let out for godown purpose and no machineries were erected therein. Also submitted a certificate from Jurisdictional Village administrative officer of M\/s.Lakshmi Scaff and M\/s. Vel Scaff, who certified that there were no machineries installed in the said premises.
\n2.7 Entire demand is arrived based on the sale value mentioned in the file captioned “Lakshmi 04-05 sales bills” maintained by the appellant at the premises of M\/s. Lakshmi Scaff without any other corroborative evidence.
\n2.8 The show cause notice has failed to record the fact as to whether the appellant had sufficient manpower\/ purchase and consumption of raw materials\/ basic infrastructure\/machineries to manufacture such goods;
\n2.9 The affidavits submitted by the job workers would also support the cont<\/p>\n
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\n2.13 The appellant submits that demands of duty cannot be confirmed based on assumption and presumption and it requires cogent evidence to establish manufacture.
\n2.14 The department had miserably failed to produce even a single evidence to prove that the appellant had actually engaged in manufacture of the said goods at their premises.
\n2.15 It is a settled principle of law that suppliers of raw materials cannot be held as manufacturers to levy excise duty on the goods manufactured by Job workers.
\n3. The ld. AR Shri A. Cletus appeared and argued on behalf of the department. He submitted that the contention of the appellant that there were no machineries at the time of inspection by the officers and therefore the allegation that the appellant has not manufactured scaffoldings \/ propping equipments is without any basis. He submitted that th<\/p>\n
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\n5.1 The argument of the ld. AR is that since the appellant has sold such goods to various construction companies, the only inference that can be made is that the appellant has manufactured such goods. We are not able to agree with this argument. The appellant has given list of 16persons who had done the manufacturing activity as job workers. The adjudicating authority formed an investigation team to carry out inquiry with regard to these 16 persons. Statements were recorded from some of these persons. Six out of them admitted to have done the job work and supplied goods to appellant but denied to have issued \/ sign<\/p>\n
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\n “Although as per records, the premises was visited by the Departmental Officer on8.12.2006, yet it does not appear whether any pnachanama etc. of the activities carried on in these premises was drawn by the officers. There is no further investigation by the department on this count.”
\n5.3 So also in para 16, it is seen noted that the investigation team had traced many of the job workers out of the 16 job workers given by the appellant. The relevant portion reads as under:-
\n “The investigation team reported that out of 16 job workers six job workers (Category A) were traced in their location given in the affidavit who accepted to having done job work for the noticee and gave<\/p>\n
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\n “No doubt there are certain lacuna in the investigation as to the establishment of presence of machinery, manufacturing activities etc. in the premises of the noticee. It is settled law that defence case cannot be advanced by pin pointing loop holes \/ deficiencies in the investigation. Moreover, the inculpatory statements of the noticee in the very beginning of the investigation perhaps stalled further investigation in this direction. In view of the aforesaid discussions, I hold that Shri A. Ganesan, the noticee has failed to prove that he has not manufactured the impugned good<\/p>\n
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