By TIOL News Service

NEW DELHI, NOV 18, 2017: THE appellant are in the business of installing roller blinds, curtain tracks, etc. at site.

For this purpose, items like fabrics, aluminum tubes, aluminum tracks, plastic brackets, metal brackets, chain, etc. are procured from outside.

The roller blinds are of textile fabrics as well as non-textile items (plastic). Since the roller blinds of textile materials are fully exempt from duty , in this case, the dispute is only about the roller blinds of non-textile materials.

The aluminum sections are cut to the required size and after fixing the plastic brackets or metal brackets on the wall, the sections are fixed on which the roller blinds/vertical blinds are mounted.

The department was of the view that these blinds were chargeable to duty.

ASCDN dated 30.10.2009 was issued for recovery of CE duty of Rs.59,35,572/- for the period 2005-2006 to 2008-2009.

The CCE confirmed the demand and appropriated the amount of Rs.15 lakhs paid during investigation. Penalty of Rs.59,35,577/- was imposed on the company and a penalty of Rs. 10 Lakh was imposed on the General Manager under the CER, 2002.

In the first round of appeals, the order was set aside by the CESTAT [2011-TIOL-1830-CESTAT-DEL] and the matter was remanded since it was found that while confirming the demand, the Commissioner had not given any finding as to under which Tariff Heading the goods alleged to have been manufactured by the appellant are classifiable.

The matter was adjudicated and the Commissioner held that the roller/vertical blinds made of fabrics of Chapter 39 are classifiable under sub-heading 3925 2000, roller/vertical blinds made out of the fabrics of Chapter 52 to 59 are classifiable under sub-heading 630300 and the roller blinds of fabrics falling under Chapter 70 are classifiable under sub-heading no. 70199000 of the Tariff.

A duty demand of Rs. 44,66,863/- was confirmed along with equivalent penalty and interest; amount already paid was appropriated and penalty of Rs.5 lakhs was imposed on the General Manager.

Both the appellants are again before the CESTAT.

Pre-deposit was ordered by CESTAT. See [2012-TIOL-1768-CESTAT-DEL].

The appeal was heard recently.

The appellant inter alia submitted that the roller/vertical blinds came into existence at site; that these rollers/vertical blinds once installed, cannot be shifted to another place without being completely dismantled; that since vertical/roller blind after installation become part of the immovable property, there is no manufacturing involved, that the appellant during the period of dispute, were treating their activity as services and were registered with Central Excise authorities for payment of service tax and till July, 2007 they were paying service tax under "installation service" and from July, 2007 onwards, they were paying service tax under Works Contract Service; that the same activity cannot be treated as service as well as manufacture; that service tax paid by the appellant during the period of dispute is about Rs. 14 Lakhs.

Moreover, even if the appellant?s activity is treated as manufacture and attractsCE duty, the bulk of the duty demand would be time barred, as when the appellant?s activity had been declared to the department and service tax was being collected by treating their activity as service, the appellant cannot be accused of suppressing the relevant facts.

The AR prayed for upholding the impugned order.

After considering the note submitted by the appellant on the process of manufacture undertaken, the Bench observed thus –

On Merits:

"9. Since the fabric is fixed to the aluminum tube in the factory as also the motor in certain cases, therefore, the blinds can be said to have come into existence in the factory premises. Such blinds are installed at the site of the customer. These blinds are in the nature of curtains and cannot be said to become immovable properties when they are mounted on the wall. The roller blinds can be unbolted and removed at any time which renders these blinds to be in the nature of movable rather than immovable property. These facts also have been admitted by Shri Zakkaria Vergere Salaria, MD of the company in his affidavit. Hence we find no justification in the claim of the appellant that the goods become immovable property. Further we also do not find any merit in the claim of the appellant that these goods are tailor made items and not marketable. It is obvious that the product is available as per the needs of the buyer even though it may not be a product offered on the shelves. Further we find that blinds (including venetian blinds) and similar articles find specific inclusion in CETH 39253000 of Central Excise Tariffs, when made out of plastics. Accordingly these goods are chargeable to excisable duty under CETH 39253000 when made of out of plastic and under CETH 630300 and 70199000 when made out of other materials."

CE and ST - mutually exclusive?

"10. … It is obvious that service tax if paid can only be on service component. The value of the service component is not includible in the value of goods cleared from the factory which is liable to payment of excise duty. From the impugned order we find that the value of the goods for payment of excise duty has been determined in terms of Central Excise Valuation Rules, 2000, on the basis of CAS-4 Certificate issued by the Chartered Accountant. Hence, we find no merit in the argument. It is further seen that the Adjudicating Authority has permitted the Cenvat credit of the CVD paid on the imported inputs as well as the Central Excise Duty paid on locally procured components."

Limitation:

Noting that on ‘time bar' the adjudicating authority had elaborately dealt with the same, the CESTAT reproduced paragraph 34 of the o-in-o and held that the Bench agreed with the same.

Inter alia , the adjudicating authority had observed – "…it is evident that the party was aware of the fact of duty liability on the Roller Blinds but has not taken the Central Excise Registration and had not shown that it made any effort to discover, by making enquiries with the department whether it was liable to duty… They were aware of the facts that their competitors in the market are paying excise duty on roller blinds as admitted by Sh. Arun R Jasuja, GM. There is nothing to show that the appellant had ever informed the Department or had tried to take the view of the Department on their product. Further, it is well settled that ignorance of law in no excuse…."

In fine, the impugned order was sustained and the appeal was dismissed.

(See 2017-TIOL-4055-CESTAT-DEL)