TaxTMI 
TaxTMI 
2014 (11) TMI 576
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.... that the Applicants are engaged in the manufacture of 'Flavoured Chewing Tobacco' falling under the erstwhile Tariff Sub-Heading No.2404.41 and with effect from 28.02.2005 under Tariff Item No.2403 99 30 under description of goods, 'Jarda Scented Tobacco', of the Central Excise Tariff Act, 1985. The Applicants had been availing the benefit of exemption Notification No.08/2004-CE dated 21.01.2004 for clearance of the Branded Chewing Tobacco/Jarda Scented Tobacco during the period from 21.01.2004 to 28.02.2007, without payment of duty on fulfillment of the conditions of the said Notification. On the basis of intelligence, investigation was carried out and Notices were issued. It was alleged that the Applicants had suppressed the fact of manufacture of the excisable commodity described by them as 'compound' cleared for captive consumption without payment of duties, as applicable, which were used in the manufacture of exempted goods namely, Branded Favoured Chewing Tobacco/Jarda Scented Tobacco. It is also alleged that the Applicants were not eligible to the benefit of the exemption Notification No.52/2002-CE dated 17.10.2002 in respect of the said 'compound' manufactured and captiv....
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....facture of 'compound' as an intermediate product since beginning, and the entire process of manufacture had been disclosed to the Department. Also it is his submission that the Department had carried out auditing of the records periodically between 2004-2006. Hence, there cannot be suppression of facts with intent to evade payment of duty. He has submitted that since there is no intention to evade duty, longer period of limitation would not be attracted, as the 'compound' manufactured by the Applicant being otherwise eligible to exemption under Notification No.08/2004, and the Applicant would have got the benefit of additional sum of money available to them for investment in the North-East, had the exemption on 'compound' under Notification No.08/2004-CE, been availed. It is his submission that the issue is highly debatable; therefore, they are entitled for complete waiver of pre-deposit of the dues adjudged against them. In support, he referred to the decisions of this Tribunal namely, (i) J&K Aluminium Co. vs. CCE & ST, Jammu, 2014(299)ELT 379(Tri-Del.); (ii) Anglo-French Drugs & Industries Ltd. vs. CCE,Bangalore-II, 2008(230)ELT492(Tri.-Bang.); (iii) Burn Standards Co. Ltd. vs. ....
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....ts to claim the said benefit retrospectively, and after nearly a decade of its clearance in respect of the impugned intermediate product for consumption. Further the Ld.Special Counsel for the Revenue submitted that the extended period of limitation is invokable against the Applicant as they have suppressed the fact of manufacture and consumption of intermediate 'compound' from the department even after they were fully aware of the fact that in their own case, the Hon'ble Supreme Court has held that the said intermediate product as excisable goods. In support of his submissions, he has referred to the judgments, namely, (i) CCE, Ahmedabad vs. Cadila Laboratories, 2002(142)ELT 279(SC); (ii) Eagle Flask Industries Ltd. vs. CCE, Pune, 2004(171)ELT 296(SC); (iii) CCE, New Delhi vs. Hari Chand Shri Gopal, 2010(260)ELT 3(SC); (iv) Supreme Lams vs. CCE, Meerut, 2013(296)ELT 45(Tri-LB). 5. Heard both sides and perused the records. We find that the demands have been confirmed against the aforesaid Applicants on the ground that during the relevant period, they had manufactured 'compound' and cleared for captive consumption, in their own factory, for manufacture of 'Branded Flavoured Chewing....
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....cond Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duties of excise, additional duties of excise leviable under the said Central Excise Tariff Act, the Additional Duties of Excise (Goods of Special Importance) Act and National Calamity Contingent duty leviable thereon under sub-section (1) of section 136 of the said Finance Act, subject to the following conditions, namely,- (A) the exemption under this notification shall be available only in respect of a unit which (i) is located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland or Tripura; (ii) had commenced commercial production or on after the 24th day of December, 1997, but not later than the 28th day of February, 2001; (iii) had availed of the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated the 8th July, 1999] or No.33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated the 8th July, 19....
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.... of exempted product. 8. It is not in dispute that the manufactured intermediate product, i.e.compound is excisable and hence dutiable. Even though at the adjudication stage, the applicants disputed its excisability, but such an argument has not been pressed hard before us. We find that the Hon'ble Supreme Court in their own case had observed that the said 'compound in balti' is excisable. At para 19 of the judgment, Their Lordships had observed as follows: 19. Applying the above tests to the facts of this case, we find that sada kimam was bought by the assessee as the raw material which was then blended with saffron, perfumes, menthol etc. to form a compound which was then packed in 'balties' and cleared to the above three licensed units at Okhla Industrial Estate, Phase-II, New Delhi, Noida (UP) and Barotiwala (HP), where Tulsi Zafrani Zarda was manufactured. That, the assessee used to buy a similar compound (Lucknowi Kimam) from the market from time to time and used in the manufacture of their final product. That, the compound (kimam) prepared by the assessee at 96, Okhla Industrial Estate, Phase-II....
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....f the Finance Act, 2001 (14 of 2001) (hereinafter referred to as the said Finance Act) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue), No.121/94-Central Excise, dated 11th August, 1994, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (5 of 1986) (hereinafter referred to as the said Tariff Act) manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products all goods falling under Chapter 24 of the first Schedule to the said Tariff Act, from the whole of the duty of excise and additional duty of excise and national calamity contingent duty leviable thereon, which is specified in the respective Schedules to the said Tariff Act and the said Special Importance Act and the said Finance Act: Provided that nothing contained in this notification shall apply to input used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zo....
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....smuch as the wordings of Notification No.08/04-CE dated 21.01.2004 are unambiguous and clear and there is no dispute on its availability to the Applicants for their finished goods, 'Branded Flavoured Chewing Tobacco/Zarda Scented Tobacco'. However, to claim the benefit of the said Notification for the intermediate product 'compound', the applicant should satisfy the conditions laid down therein. Since the Applicant had not claimed exemption under the said Notification for their product, 'compound', therefore, at this stage, it would be incorrect to extend the benefit to the product, 'compound' on the basis of assumptions and presumption, without examining in detail about its applicability and eligibility of the Applicants . Also, we agree with the ld. Special Counsel for the Revenue that the said Notification is a conditional one and to be eligible, the Applicants are liable to fulfil the conditions laid down therein. In this regard the Hon'ble Supreme Court at para 22 of the judgment in the case of CCE, New Delhi Vs. Hari Chand Shri Gopal & Ors. 2010 (260) ELT 3(S.C) laid down the principle as: &n....