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2007 Supreme(P&H) 2021
PUNJAB & HARYANA HIGH COURT
M.M.Kumar and Ajay Kumar Mittal JJ.
Commissioner Of Central Excise
Versus
Pooja Forge Ltd.
CEA No. 31 of 2007,
Decided On : NOVEMBER 19, 2007
The interpretation of unit for capital goods usage and the justification of penalties based on the presence of two separate entities.
Headnote:
Modvat Credit - Capital Goods - Interpretation of Unit - Summary: The court dismissed the appeal against the order holding that the assessee had two units and the capital goods were moved between those units for manufacturing the same final product, without involving disposal or alienation of the goods. The court found no substantial question of law as the issue was a pure finding of fact, emphasizing that the registration of only one unit indicated the absence of two separate entities. The imposition of penalties was also held unjustified.
Fact of the Case:
The appeal was filed against the order holding that the assessee had two units and the capital goods were used in the manufacturing of the same final product without disposal or alienation, and penalties were not justified.
Finding of the Court:
The court found no substantial question of law as the issue was a pure finding of fact, emphasizing that the registration of only one unit indicated the absence of two separate entities. The imposition of penalties was also held unjustified. The appeal was dismissed.
Issues: Interpretation of unit for capital goods usage and imposition of penalties.
Ratio Decidendi: The absence of two separate entities was indicated by the registration of only one unit, leading to the dismissal of the appeal. The court emphasized that the issue was a pure finding of fact, and penalties were held unjustified.
Final Decision: The appeal was dismissed.
M.M.Kumar, J.
1. This appeal filed under Section 35G of the Central Excise Act, 1944 is directed against the order dated 3-1-2006 (Annexure P.3) passed by the Custom, Excise and Service tax Appellate Tribunal, New Delhi holding that the assessee-respondent had two units and the capital goods were moved between those two units of the assessee. It has further been found that the capital goods were used in the manufacturing of the same final product and the case did not involve any disposal or alienation of modvated capital goods which would warrant denial of Modvat credit. The Tribunal has also held that the imposition of penalities were not justified.
2. After hearing learned counsel at some length, we find that no substantial question of law would arise for determination of this Court because these are pure findings of facts. As to whether the assessee-respondent had two units of one entity or there two different entities is necessarily a question of fact which is further fortified from the fact that only one registration has been made. Had there been two units then the assessee would have been compelled for registration of both independently. Therefore, there is no merit in the appeal and same is accordingly dismissed.
