LexM/S. USHA RECTIFIER CORPN. (I) LTD. (PRESENTLY KNOWN AS M/S. USHA (I) LTD.) versus COMMISSIONER OF CENTRAL EXCISE, NEW DELHI
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[2011] 1 S.C.R. 347 M/S. USHA RECTIFIER CORPN. (I) LTD. (PRESENTLY A ~· KNOWN AS M/S. USHA (I) LTD.) v. COMMISSIONER OF CENTRAL EXCISE, NEW DELHI (Civil Appeal no.6866 of 2000) JANUARY 13, 2011 B [DR. MUKUNDAKAM SHARMA AND -r ANIL R. DAVE, JJ.) Central Excise Rules, 1944: rr.9 and 49, explanation - c Captive consumption - Manufacture of testing equipment by assessee for testing its own final products - Testing equipment manufactured within the factory- Admission by assessee that the import of testing equipment was avoided to save foreign exchange and parts and components were purchased to D develop the testing equipment - Demand of duty on testing equipment - Held: Duty payable on the testing equipment - - It was admitted by the assessee that they had undertaken such manufacturing process of the testing equipments to avoid importing of such equipment - Such a statement E confirmed the position that such testing equipments were saleable and marketable - Explanations to Rule 9 and 49 provides that excisable goods manufactured and consumed or utilized within the factory premises as such are deemed to have been removed from the premises immediately for such F consumption or utilization and duty is leviable on such excisable goods. Central Excise Act, 1944: s. 11 A - Demand - Limitation - Suppression of relevant facts - Non-payment of duty on the ' -r- testing equipment manufactured for the purpose of testing the G final products - L-4 licence not obtained by the assessee nor the fact of manufacturing of the said equipment disclosed to the department - The said knowledge of manufacture acquired by the department only subsequently- Held: In view 347 H 348 SUPREME COURT REPORTS (2011] 1 S.C.R. A of non-disclosure of such information by the assessee and suppression of relevant facts, the extended period of limitation was rightly invoked by the department. The appellant-assessee, a manufacturer of electronics equipments, manufactured a machinery in the 8 nature of testing equipments costing Rs.31.27 lacs to test its final products. A show cause notice was issued on the assessee demanding duty on the plant and machinery including the testing equipments manufactured by them. After considering the reply of the assessee, the C authorities confirmed the demand. The CEGAT dismissed the appeal filed by assessee. The instant appeal was filed challenging the order of the CEGAT. Dismissing the appeal, the Court D HELD: 1. The demand for payment of central excise duty in the instant case was made on the basis of statement made by the appellant-assessee in their balance sheet to the effect that there was an addition to plant and machinery including testing equipments worth E Rs. 31.26 lacs which were made in the company by capitalisation of the expenditure on raw material, stores and spares and salary/wages and other benefits. The said statement and details were mentioned in Schedule 'Q' appended to notice of balance sheet and profit and F loss account of the appellant for the year ending December, 1987. The said position was further corroborated by the Director's report appearing in the Annual Report for the year ending December, 1988, wherein it was mentioned that during the year the G company developed a large number of testing equipments on its own for using the same for the testing of semi-conductors manufactured by it. Once the appellant had themselves made admission in their own balance sheet, which was not rebutted and was further H substantiated in the Director's report, they could not later ·- " USHA RECTIFIER CORPN. (I) LTD. v. COMMNR. OF 349 CENTRAL EXCISE turn around and make submissions contrary to their own A admissions. Moreover, they also clearly took a stand in their reply to the said show cause notice that they bought various parts and components to develop the testing equipments for use within the factory and that such steps were undertaken to avoid importing of such equipments B from the developed countries with a view to save foreign exchange. Even if the testing equipments were used for captive consumption and within the factory premises, considering the fact that they were saleable and marketable, duty was payable on the said goods. The fact c that the equipments were marketable and saleable was also an admitted position as the appellant has admitted it in their reply to the show cause notice that they had undertak
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