Based on the solid information given by me the Directorate General of Central Excise Intelligence (DGCEI), Pune booked a massive evasion case against M/s JCB India Ltd. My information was correct and accurate who was found engaged in packing or repacking or MRP affixing of the automobile parts without obtaining central excise registration which were being cleared without payment of duty by it. The raids conducted resulted in seizure of stock worth Rs. 38.37 Crores at Pune unit and Rs. 57.73 Crores at Faridabad unit of M/s JCB on 08.07.2009 which were found in repacked conditions with MRP affixed on the same. Investigation finalized also resulted in issuance of four show cause notices bearing F. No. DGCEI/MZU/I&ISC/30-66/09 separately to Pune (dated 22.12.2009), Faridabad (dated 22.12.2009), Chennai (dated 08.09.2010) and Kolkata (dated 08.09.2010) for recovery of duty worth 9, 03, 39, 053/-, Rs. 10, 74, 99, 807/-, Rs. 7, 91, 99, 566/- and Rs. 5, 13, 11, 400/- respectively. The JCB has also admitted that it is doing packing or repacking of its parts but has not accepted that it is doing for automobile parts.
It may also be noted that JCB had approached to the High Court of Punjab & Haryana, Chandigarh against the seizure effected by the DGCEI, N. Delhi and on the ground that it is not engaged in the manufacture of automobile parts. However, the High Court rejected the writ petition no. 12188 of 2009 dated 5.11.2009 which clearly means that had the automobile parts not been seized, the High Court would have quashed the seizure and upheld in favour of the JCB. Since it is in favour of department, how dept. can take contrary views of the dutiablity of parts of loader and backhoe loaders. The Supreme Court in the case of SARVESH REFRACTORIES (P) LTD. Versus COMMISSIONER OF C. EX. & CUSTOMS 2007 (218) E.L.T. 488 (S.C.), in Civil Appeal No. 1824 of decided on 22-11 that change of classification by consumer can not allowed. Similar views were taken by the CESTAT, N. Delhi in case of SURYA ALLOY INDUSTRIES PVT. LTD. Versus COMMISSIONER OF C. EX., RAIPUR 2008 (227) E.L.T. 617 (Tri. - Del.) wherein it was decided that Change in classification of inputs at buyer’s end is not permissible. In the investigation, it has been ascertained by the DGCEI, that goods were also received by JCB under chapter 87 of the CE Act, 1944 from the vendors.
I came to know that demand is being dropped by Shri P. AYYAM PERUMAL, Pune – 1 Commissioner on the argument given by JBCIL that the parts dealt by it is not automobile parts but parts of loaders/backhoe loaders. However, there are various judgments and Acts which have been quoted in the show cause in favour of the revenue which clearly suggest that the parts of loaders and backhoe loaders are nothing but automobile parts. The loaders and backhoe loaders are motor vehicles which are compulsorily required to get RTO registration without which it can not run on the roads and it carries goods namely woods, soil etc. also. Plus, the ARAI has also confirmed that backhoe loaders and loaders are tested under the motor vehicle act and all motor vehicles are required to be certified and tested by ARAI. Since it is motor vehicle and carries goods from one place to another place, it becomes an automobile. Also the distance is not a matter of criteria for deciding automobile or not an automobile. The circular of 2008 does not cover loaders and backhoe loaders but it covers only track mounted excavators which is used for digging of soil and not to carry goods, are not permitted to run on the roads and not required to be registered with RTO so also in case of ARAI certificates. Therefore, demand can not be dropped otherwise there would be revenue loss to the government which needs to be protected. There is internal news of the JCB that duty will be paid by it if Cenvat facility is extended to it. Kindly look into the matter in the interest of revenue.
This is for your information regarding prevention of any type of corruption
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