2015 (1) TMI 329 - AT - Central Excise

Tribunal rules in favor of paper manufacturer in excise duty dispute post 1993 Notification.

MADHYA BHARAT PAPERS LTD. Versus COMMR. OF C. EX. & CUS., RAIPUR

The Tribunal ruled in favor of the appellant, a paper manufacturer, in a case involving an allegation of non-payment of excise duty post a 1993 ... Demand u/s 11D - collection of amount in the name of duty - allegation of Revenue is that before 28-2-1993 the appellant was showing excise duty distinctly on the gate passes and thereafter no such duty element was shown in such document, as a result of which appellant collecting excise duty after the 1993 Notification had not deposited the same in to the treasury - Held that:- In both the notifications, Government intended use of certain wastage to make pulp for use thereof in manufacture of paper so as to enjoy duty exemption. Scope of Notification of 1991 was widened by Notification No. 30/93-C.E., dated 28-2-1993 to grant exemption to paper industry - Examination and comparison of pages 59 and 60 with pages 61 and 62 of appeal folder indicates that the price before and after the exemption Notification No. 30/93-C.E., dated 28-2-1993 remained same. The appellant acting on the basis of 1993 Notification was not required under law to disclose excise duty element since paper manufactured using notified pulp by the appellant was exempted from excise duty. Such observations were also made in the stay order dated 21-12-2005 while hearing stay application and pre-deposit waived. At that time also the bench prima facie did not appreciate applicability of Section 11D to the present case. - Decided in favour of assesse. Issues: Allegation of non-payment of excise duty post-1993 NotificationAnalysis:The appellant, a paper manufacturer, claimed duty exemption under a specific proviso of Notification No. 30/93-C.E., dated 28-2-1993, for manufacturing paper using certain pulps. The Revenue alleged that the appellant did not deposit excise duty collected post the 1993 Notification, based on the absence of duty element in gate passes. The appellant contended that they did not collect any duty post-1993, as evidenced by the documents in the appeal folder. The Tribunal noted the difference in duty element disclosure in documents pre and post 28-2-1993, concluding that the appellant did not collect any duty element after the notification. The Tribunal found no case for Revenue, leading to the non-sustainability of the adjudication.Analysis:The Revenue argued that the appellant should have disclosed the duty element in all relevant documents, pointing out a discrepancy in duty element disclosure between different pages of the appeal folder. However, the Tribunal examined the intention behind both the 1991 and 1993 Notifications, emphasizing the government's aim to widen the scope for duty exemption in the paper industry. Upon comparing documents before and after the 1993 Notification, the Tribunal observed that the prices remained the same, indicating that the appellant, acting in accordance with the 1993 Notification, was not required to disclose the excise duty element. The Tribunal referenced a previous stay order that did not appreciate the applicability of Section 11D to the case, further supporting the allowance of the appeal.