THE COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM versus M/S. MEHTA & CO.

Citation: [2011] 2 S.C.R. 874 · Decided: 10-02-2011 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2011] 2 S.C.R. 874 
THE COMMISSIONER OF CENTRAL EXCISE, 
VISAKHAPATNAM 
v. 
M/S. MEHTA & CO. 
(Civil Appeal No. 1090 of 2009) 
FEBRUARY 10, 2011 
[DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, JJ.] 
Central Excise Act, 1944 - s. 11 A, proviso - Assessee 
C engaged in business of interior decoration and providing 
composite services including woodwork, furniture items etc. at 
the premises of customer -
Show cause notice issued 
alleging that the assessee manufactured articles of wood, 
furniture, etc. in the premises of a hotel and removed the same 
D without payment of excise duty - Demand by Commissioner 
- Whether the demand for payment of duty was barred by 
limitation and whether the items like chairs, beds, tables, 
desks, etc., affixed to the ground could be said to be 
immoveable assets and not liable to excise duty - Held: 
E 
S. 11 A of the Act empowers the Authority to demand excise 
duty - In the instant case, there was apparent intention on the 
part of respondent to evade excise duty and contravene 
provisions of the Act- Therefore, proviso of s.11A(i) of the Act ' 
would get attracted -
The cause of action, i.e., date of 
F 
knowledge could be attributed to the appellant in the year 1997 
when in compliance of the memo issued by the appellant and 
also the summons issued, the hotel furnished its reply setting 
out the details of the work done by the assessee - Show cause 
notice having been issued in the year 2000, the demand 
G made was clearly within the period of limitation as prescribed, 
which is five years - Ordinarily furniture refers to moveable 
items such as desk, tables, chairs required for use or 
ornamentation in a house or office - Therefore, the furniture I 
could not said to be immoveable property (as held by the 
H 
874 
C.C.E., VISAKHAPATNAM v .. MEHTA & CO. 
875 
Tribunal) - The Commissioner had listed out various items A 
as furniture after proper scrutiny - Tribunal was not justified 
in rejecting the said findings -
Order passed by the 
Commissioner accordingly restored - Central Excise Tariff 
Act, 1985 - Chapter sub-heading Nos. 9401.00 & 9403.00, 
4410.11, Bj02.00 and 7610.90. 
B 
The respondents-assessees were engaged in the 
business of interior decoration and provided composite 
services including woodwork, furniture items etc. They 
entered into contracts .with customers for doing these 
C 
works as per their requirement and also carry out these 
works at their customer's premises. 
On gathering specific intelligence that the assesses 
have undertaken the manufacture of articles of wood, 
furniture, etc. in the premises of Hotel Grand Bay, 
D 
Vishakhapatnam and removed the same without payment 
of duty of excise, the officers of Head Quarters Preventive 
unit inquired _and investigated the matter. It was found 
that the assessee, inter alia, manufactured and cleared 
furniture, falling under chapter sub-heading Nos. 9401.00 
E 
& 9403.00, 4410.11, 8302.00 and 7610.90 respectively, of 
the Schedule to the Central Excise Tariff Act, 1985 
without payment of proper duty of excise with an 
intention to evade payment of duty. 
A show cause notice under the Central Excise Act, 
1944 was issued to the respondent - assessee. The 
respondent-assessee and Mis. Grand Bay Hotel 
submitted their respective replies. The Commissioner of 
Central Excise confirmed the demand of Rs. 43,59,7101· 
F 
out of the proposed demand of Rs. 62,94,910/- under Rule 
G 
9(2) along with penalty of equal amount i.e. Rs. 43,59,710/ 
• and directed the redemption of the confiscated goods 
after the payment of a fine of Rs. 1,00,0001- plus the duty 
and penalty adjudged. Aggrieved, the respondent filed 
H 
876 
SUPREME COURT REPORTS 
[2011) 2 S.C.R. 
A appeal before the CESTAT which allowed the appeal and 
remanded the matter to the adjudicating authority 
concerned to examine the matter afresh. Thereupon, the 
Commissioner, 
Central 
Excise 
& 
Customs, 
Visakhapatnam confirmed the demand of Rs. 14,94,656/-
B with penalty of Rs. 7,47,328/- with interest as per Section 
11 AB of the Central Excise Act, 1944 and also imposed 
a penalty of Rs. 5,00,000/- under Rule 173Q. 
Aggrieved thereby the respondent filed an appeal 
before the Customs, Excise & Service Tax Appellate 
C Tribunal (CESTAT) which set aside the order of the 
Commissioner, 
Central 
Excise 
& 
Customs, 
Visakhapatnam. The Tribunal held that the items 
fabricated by the respondent were permanently fixed to 
the walls and ground of the room and

Excerpt shown. Read the full judgment & AI analysis in Lexace.