TaxTMI 
TaxTMI 
2003 (1) TMI 332
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....uring process is that as soon as the final product (i.e.) Iron Ore Pellets emerge from the furnace, the pellets in red hot condition are passed over a conveyor system to the open stockyard which is situated far away; even before they reach the stockyard the weight of the 'dry pellets' is ascertained by an automatic weighing system by means of a weightometer fixed to the conveyor belt and the weight so ascertained is accurately recorded in the RG-1 account and duly accounted for. The pellets recorded at this stage do not contain any water/moisture. Immediately after the weight is recorded by the weightometer, water is sprinkled on the pellets to reduce dust and escape of other fine particulate into the atmosphere in compliance with the statutory requirements of the pollution control board and stored in the open are exposed to vagaries of atmosphere and during the monsoon are fully drenched and soaked in rainwater. Water required to be sprinkled while transferring the pellets to the ship over a conveyor and after loading into the ship to comply with the requirement of the Pollution Control Board. 4. (a) The appellant commenced trial production during November 1996 and i....
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....00 - - February '99 1,67,756.170 - 63,715.130 March '99 37,524.000 - - April '99 1,94,794.000 - - May '99 23,179.000 - - June '99 1,987.000 - 61,033.530 July '99 81,712.000 - - August '99 52,234.000 - - September '99 1,62,874.000 - - TOTAL 32,78,673.300 45,412.514 6,39,943.540 October '99 1,09,146.000 20,776.420 33,343.540 November '99 47,089.000 - 1,09,354.130 December '99 1,73,163.000 - 64,772.400 January, 2000 2,23,756.000 - - February, 2000 1,56,125.000 - 87,303.150 TOTAL 7,09,279.000 20,766.420 2,94,773.220 Grand Total 39,87,952.300 66,188.734 9,34,716.760 During the material period, a quantity of 39,87,952.300 MTs was cleared for captive consumption as against a clearance of 66,188.734 MTs to outside buyers and 9,34,716.760 MTs cleared for exports. The department has not raised any objection regarding the quantity/ value of goods cleared for export. (d) While the practice of charging the price based on the dry weight was going on, the Commissione....
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....h was not followed by them earlier and also by the other manufacturers and thus the appellants have cleared certain quantities of pellets in the guise of moisture on which duty was payable and this was a wilful evasion of duty payment attracting the contraventions of the provisions of Rules 9(1), 52A, 53, 173G, 173F and 226 of the Central Excise Rules. The Commissioner has come to a finding : - (i) The reasons advanced for non-deduction of 'moisture' prior to 11-8-97 when they shifted to duty payment on 'dry weight' were lacking conviction, inasmuch as the appellants, a major corporate entity would be not unaware of application of international norms prior to 11-8-97 when they themselves have paid duty on the weights with the 'moisture' content and no professionally managed company would pay extra duty on 'moisture' weight and the norms should remain constant, whether for trial production or otherwise. Even before 11-8-97 bulk of production at Visakhapatnam plant was meant for captive consumption at Hazira and other documentary evidence clearly established that prior to 11-8-97 quantity ascertained by weight was done without deduction of any 'moisture' co....
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....plant, the appellants were receiving pellets from Vikram Ispat, Raigad, Maharashtra and M/s. Mandovi Pellets Limited, Goa and copies of these invoices show there is no such practice of deduction of 'moisture'. (b) the appellants have admitted that the Iron-Ore pellets emerged from the furnace in red hot condition and are passed over a conveyor system to the open stock yard situated far away. Even before they reach the stock yard, the weight of the cooled dry pellets is ascertained by an automatic weighing system fixed to the conveyor belt and the weight so ascertained is accurately recorded in RG-1 Account and duly accounted for. Revenue has not brought out anything on record in the impugned order or in the submissions made before us that this factual position is in any way impugned. When RG-1 Accounts are maintained of the 'dry weight' of pellets and that is not being questioned, then we find that no different weight can be reckoned especially 'moist weight' ascertained by draft survey methods to consider the quantity removed. The quantity removed in the 'moist' condition is unquestionably excess than the 'dry weight' quantity recorded in the RG-1.....
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....things which have economic significance i.e. value, utility and exchangeability." Therefore, if goods are required to meet any specific requirement of another lower Boiler test or Drugs Act, then they are required to be entered into RG-1 only after such tests/standards activity/ process conducted as are required to be complied and met. In the present case there is no such finding. The requirement of spray of water appears to be a Transport Requirement and not that of fully manufactured product. Therefore, we cannot find anything amiss in the goods being accounted in the RG-1 on 'dry weight' basis and subsequent removals even though any moist condition being converted to dry weight basis to effect and pay duty thereon. Nothing amiss has been arrived at on this 'dry weight' accounting maintained. (c) The pleading of the appellants is appreciated inasmuch as free moisture loss is passed on the certificate of analysis issued by an independent 'assesee/compere' fixed by the buyers. A perusal of various purchase orders placed on the appellant by national and international buyers, placed before us which are said to have been shown to the adjudicating....
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.... under Heading 26.01 read as under : - "The Heading also covers iron ores and concentrates with a manganese content of less than 20% calculated on the dry weight (the ores and concentrates being heated to a temperature of 105 to 110° C) (see Explanatory Note to heading 26.02). Depending upon their manganese content, these ores are known either as manganiferous iron ores or as ferruginous manganese ores. The heading excludes finely ground magnetite and other finely ground iron ores for use as pigments (Chapter 32)."                        (Underlining supplied) Therefore, the adjudicator's finding that wet or dry weights are not relevant for Iron ore and concentrates under 26.01 are not upheld by us. (f) As regards Commissioner's finding that the appellant being a corporate entity run by professional management would not absorb huge losses by paying extra duties on moisture weights recorded due to adoption of wrong practice earlier to 11-8-97 when the appellants were paying duty on the wet basis weight. It is found,....
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.... us is whether sized or unsized yarn would be liable for duty in an integrated process of manufacture. Sizing is relevant to weaving and not to spinning. It is a process necessary for weaving cloth and not to spinning yarn. Therefore, reading the amended rule 49, the utilization of yarn in a continuous process of manufacture 'immediately' before such consumption or transaction would have reference to unsized yarn and not sized yarn. The deemed 'issue out' or 'removal' for purposes of weaving would be 'issue out' or 'removal' of unsized yarn. Once this deemed removal takes place, the unsized yarn is first sized, the process being the first-process in the many processes, which ultimately, results in weaving being completed and cloth being fabricated."                  Emphasis Supplied In the present case, substituting the words 'sized or unsized yarns' with the words 'moist or dry pellets' and considering the fact that 'moistening' is relevant only for transportation, and not for manufacture of the Iron ore pellets, in question, and applying the ratio of the above said decision, recovery of du....