2018 (5) TMI 1107 - AT - Central Excise

Tribunal rules in favor of Indian Wood Products Co. Ltd. on Central Excise duty dispute

M/s The Indian Wood Products Company Limited, Shri K.K. Damani, Shri N.H. Aggarwal, Shri Krishna Kumar Mohata, Commissioner of Central Excise, Meerut-II Versus Commissioner of Central Excise, Meerut-II, M/s The Indian Wood Products Company Limited

The Tribunal held that M/s Indian Wood Products Co. Ltd. was not liable to pay Central Excise duty on Catechins extracted from Gambier extract. The ... Manufacture - extraction of Catechins from Gambier extracts - it appeared to Revenue that main appellant was engaged in the said process of extraction of Catechins from Gambier extracts and availing benefit of Notification No. 67/1995-CE dated 16.03.1995 and not paying any Central Excise duty on Catechins - Held that: - the issue in the case of M/s The Indian Wood Products Company Limited, Shri K.K. Damani, Shri Krishna Kumar Mohta, Shri N.H. Aggarwal Versus Commissioner of Central Excise, Meerut-II [2018 (2) TMI 1099 - CESTAT ALLAHABAD], squarely covers the present situation, where it was held that It is undisputed fact that catechin were manufactured by Bareilly Chemicals Pvt. Ltd. and the main appellant used the said goods in the manufacture of their final product. Therefore, by no stretch of imagination use of catechin in the manufacture of Indian Katha can be treated as captive consumption and, therefore, the question of eligibility of main appellant for the benefit of Notification No. 67/1995 does not arise. M/s The Indian Wood Products Co. Ltd. was not liable to pay Central Excise duty on Catechins manufactured by M/s Bareilly Chemicals Pvt. Ltd. - appeal allowed - decided in favor of appellant. Issues:1. Common impugned Order-in-Original (OIO) dated 08/05/20122. Liability of M/s Indian Wood Products Co. Ltd. to pay Central Excise duty on Catechins3. Valuation of Catechins4. Imposition of penalties on individuals5. Appeal by Revenue against the reduction in valueAnalysis:1. The judgment deals with five appeals arising from a common impugned Order-in-Original (OIO) dated 08/05/2012 issued by the Commissioner of Central Excise & Customs, Meerut-II. The appeals were taken together for decision as they were related to the same OIO.2. The main issue revolved around the liability of M/s Indian Wood Products Co. Ltd. to pay Central Excise duty on Catechins extracted from Gambier extract. The Revenue contended that the extraction of Catechins amounted to manufacture and that the main appellant was not paying Central Excise duty on the Catechins, availing benefits under Notification No. 67/1995-CE. Show Cause Notices were issued demanding Central Excise duty, which led to the appeals.3. The appellants argued that the liability to pay Central Excise duty on Catechins was not on M/s Indian Wood Products Co. Ltd., citing a previous Tribunal decision. They contended that since they were not required to pay Central Excise duty on Catechins, the question of valuation did not arise. The Tribunal, after considering the submissions and previous final orders, held that M/s Indian Wood Products Co. Ltd. was not liable to pay Central Excise duty on the Catechins manufactured by Bareilly Chemicals Pvt. Ltd.4. The judgment also addressed the imposition of penalties on individuals associated with M/s Indian Wood Products Co. Ltd. The Tribunal set aside the impugned OIO, allowed certain appeals, and dismissed one appeal as infructuous. The appellants were entitled to consequential relief as per law.5. Additionally, the Revenue had filed an appeal against the reduction in value. However, the Tribunal's decision on the main issue rendered the Revenue's appeal on valuation infructuous. The judgment provided a detailed analysis of the facts, submissions, and legal precedents to arrive at the final decision, ensuring justice and adherence to legal principles.