Order Date – 10 January 2023

Parties: M/s Tribhuvan Metal Industries Vs Commissioner of Central Excise

Facts –

• The Appellant, M/s Tribhuvan Metal Industries, is engaged in the trading and manufacture of aluminum circles falling under Chapter 76 of the First Schedule to the Central Excise Tariff Act, 1985 and were registered with the Department.
• Show cause notice dated 08.09.2011 was issued to the appellant proposing confiscation of seized goods and penalty on the firm and its partners, on the ground that finished goods and raw materials lying were without any documentary evidence. It was also alleged that the appellant was engaged in manufacturing of Aluminium Circle w.e.f. 11.11.2010.
• A subsequent show cause notice was issued alleging that the appellant has started manufacturing from July, 2010 and it has been proposed that why duties demand for the period July, 2010 to May, 2011 should not be demanded along with the interest and penalty.

Issue –

• Whether demand of duty has been rightly made for the period July, 2010 to October, 2010, with penalty?

Order –

• The Tribunal held that it is clear that the appellant has done only test production prior to 11.11.2010 and they have been doing mainly trading of finished goods as the factory was not fully set up at the testing stage.
• It was observed that the Revenue has taken contrary stand wherein in the first show cause notice it is admitted that assessee has started commercial production from November, 2010 wherein in the second show cause notice, duty have been demanded from July, 2010.
• Hence the duty demand from July, 2010 to October, 2010, has been set aside. Thus penalty under Section 11AC read with Rule 25 is also set aside.