2023 (3) TMI 292 - AT - Central Excise

Tribunal confirms liability for excise duty on Magnesium Sulphate, emphasizes exemption rules

M/s. Agro Phos India Ltd. Versus Commissioner of Central Excise, Customs and Service Tax, Indore

M/s. Agro Phos India Ltd. Versus Commissioner of Central Excise, Customs and Service Tax, Indore - TMI Issues:- Appellant's liability for central excise duty on Magnesium Sulphate- Invocation of extended period of limitation in the show cause notice- Applicability of Notification No. 12/2012-CE dated 17.03.2012- Alleged suppression of facts by the Appellant- Interpretation of exemption notificationsAnalysis:The appeal challenges the confirmation of central excise duty demand on Magnesium Sulphate manufactured by the Appellant, falling under Chapter heading No. 28332100, without payment of duty. The Appellant claimed exemption under Notification No. 12/2012-CE dated 17.03.2012, which was contested by the department. The central issue revolves around the invocation of the extended period of limitation in the show cause notice, alleging suppression of facts by the Appellant regarding non-declaration and non-payment of duty on the manufactured product.The Appellant argued that Magnesium Sulphate is used as a fertilizer, falling under the definition of fertilizer as per the Fertilizer (Inorganic, Organic Or Mixed) (Control) Order 1985. They contended that the show cause notice wrongly invoked the extended period of limitation without evidence of suppression. However, the department maintained that the product was not covered under the exemption notification and the Appellant failed to declare clearances or pay duty, justifying the extended period of limitation.The Tribunal noted that the Appellant failed to declare the manufacture and clearance of Magnesium Sulphate, evading duty, which was evident from the absence of these details in their monthly ER-1 returns. The Appellant's argument of bona fide belief in exemption under the notification was dismissed as the product in question was not mentioned therein, indicating an intent to evade duty. Citing the Supreme Court judgment in M/s Meridian Industries Ltd. case, the Tribunal emphasized strict interpretation of exemption notifications, upholding the invocation of extended period of limitation.Ultimately, the Tribunal upheld the findings of the lower authority, confirming the liability of the Appellant for central excise duty on Magnesium Sulphate and dismissing the appeal. The show cause notice was deemed to have rightly invoked the extended period of limitation, with no infirmity found in the order under challenge.In conclusion, the judgment affirms the central excise duty liability on Magnesium Sulphate, addresses the issue of extended period of limitation, interprets the applicability of exemption notifications, and establishes the consequences of non-declaration and non-payment of duty by the Appellant.