TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 208
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.... considered by this Tribunal in great detail and after hearing learned counsels for more than 3 appellants in a number of appeals, this Tribunal had passed Final Order No.20998-21002/2014 dated 20.6.2014. The learned counsel was informed that even though the stay applications only were to be considered at that time with the consent of both Revenue as well as the appellants, the matter had been taken up finally and a final order was passed. It was also informed that matter was considered in great detail and order is also a fairly detailed one. Nevertheless, the counsel insisted that he should be heard and accordingly, we heard him for quite considerable time. After hearing him for such a long time, we found prima facie that almost all the issues raised by him had been considered in the order referred to above and therefore we felt it would be better and appropriate to require the learned counsel to file written submissions so that no omissions or commissions happen while the order is prepared subsequently in the chamber. The learned counsel had been directed to file the written submissions on or before 22.9.2014 with a copy to AR and 15 days time thereafter was given to the learned....
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.... coal' and therefore the benefit of Sl. No.123 of Notification No.12/2012 Customs would not be available to the appellant. Further, besides demanding interest on the differential duty, goods have been confiscated and redemption fine has been imposed and further penalties also has been imposed on the appellants. 4. In the written submissions the learned counsel had mentioned that while considering the written submissions, we have to consider the appeal memorandum also since it was specifically stated in the written submissions that the points mentioned in the appeal memorandum are reiterated. Therefore as a first step, we examine whether any point was in the memorandum of appeal but not found in the written submissions. The following grounds have been mentioned in the appeal memorandum. (i) For the purpose of determination of eligibility for exemption, in the absence of definition in the statutory provisions, the trade parlance has to be followed. This is covered by the written submissions. (ii) Since 'steam coal' is not defined, lower grade anthracite coal and bituminous coal used as fuel in the industry should be considered as 'steam coal'. Under this ground, the appellants hav....
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.... consider that these submissions need to be considered in great detail again. (iii) The determination of gross calorific value is not correct. This is covered in the written submissions also and therefore we deal with the issue when dealing with written submissions. (iv) Submissions relating to chemical test have been made in the written submission. (v) Claim for alternative Notification for imports from Indonesia. This aspect also will be discussed since it is covered by the written submissions. (vi) The case laws relied upon by the original authority are not relatable to the facts and circumstances of the case and therefore the order of original authority is illegal, unjustified and unreasonable. In view of the fact that we have considered the issues and relevant case law in great detail, we do not think it necessary to revisit the case law relied upon by the original authority and comments of learned counsel. (vii) As regards the miss-declaration, in the order passed and referred to above by the Tribunal it has already been held that there cannot be penalty on the ground of miss-declaration and no invocation of extended period also. (viii) As regards suppression also, the ....
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....es the eligible goods by the twin criteria viz., description of the goods and tariff heading, the fact that steam coal is not defined is not material and classification of the goods is material and once the classification is settled, if the Notification does not cover that classification, the benefit of exemption cannot be extended. (vi) The legislature could have simply mentioned steam coal in which case the classification aspect would not have arisen at all and in such a case, trade parlance would have been relevant and could have been considered. Once the classification is determined and the Notification gives the tariff heading, there is no question of going into trade parlance. As already observed on two occasions earlier, Paras 5 to 59 of the order in the case of Coastal Energy cover the issue in detail. 5.1.3. The appellants have relied upon certain decisions which we propose to deal with very briefly. The learned counsel while filing the written submissions did not enclose the copies of full decisions relied upon by him. Therefore, we have tried to interpret the issues based on the submissions made by the learned counsel to the best of our abilities. (i) According to the....
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...., prima facie this decision is not applicable to the present case. (v) It is also to be stated that the Hon'ble Supreme Court has already taken a view that Notifications are part of the statute. According to principles of statutory interpretation if meaning is plain, effect must be given to it irrespective of consequences. In this case when the tariff heading and the description of the items are given in the exemption notification, it is quite clear that exemption has to be extended only when the twin conditions are satisfied. Therefore the principle that when the words of a statute are clear, plain or unambiguous, they are reasonably susceptible to only one meaning, the courts are bound to give effect to that meaning irrespective of consequences has to be followed. (Nelson Motis vs. UOI - AIR 1992 SC 1981). (vi) We have followed the principle that a ratio of a decision has to be applied after considering the facts and circumstances of the case and by not taking observations made in the order. (vii) We are also of the view that the kind of facts and circumstances that we have found in these case and in the earlier case where this tribunal passed final order are unique. But we h....
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....yield and total sulphur content determined on that coal. There is a clear cut demarcation between rank Parameters reported by laboratories and coal ranks and their use for classification. For classification of coal according to rank, fixed carbon and gross calorific value has to be converted into mineral-matter-free basis in accordance with the Parr formulas wherein the quantities are to be taken into consideration on inherent moisture basis. The ASTM D 388 referred to by the learned counsel explains the scope of D 388 as ' The specification covers the classification of coals by rank, that is according to their metamorphism or progressive alteration, in the natural series from lignite to anthracite'. The site explains the significance and use a follows: 'this classification establishes categories of coal based on gradational properties that depend principally on the degree of metamorphism which the coal was subjected while buried. These categories indicate ranges of physical and chemical characteristics which are useful in making broad estimate of the behavior of coal in mining preparation and use. According ....
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....8-l2, then and only then the total moisture in such a sample on ARB can be stated to be equal to inherent (bed) moisture. On the other hand, if the sample is drawn at any subsequent stage, undoubtedly surface moisture would be present in the coal in addition to the bed moisture. In such an event, ARB moisture would be reckoned as Total moisture and not as inherent moisture' (vi) The entire procedure for determining the total moisture in coal, after collecting the gross sample, begins with preparing the sample for analysis (ASTM D2013). If gross sample is sufficiently dry, it may be sieved immediately and air-dried. If the sample is too wet to reduce in size, it should be weighed before size reduction and air-dried using an oven. In this manner, the moisture in the sample is reduced to an inherent moisture (equilibrium moisture) condition with the air in the laboratory, and changes in moisture content are minimized during the crushing and grinding operations and even during analysis. Air-drying steps in the analysis and efficient sample handling help minimize the effects of relative humidity changes and it removes most of the surface moisture of coal. (vii) While the total moi....
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....saturated solution of potassium sulfate in a closed vessel, thereby maintaining the relative humidity at 96 to 97%. The vessel must be evacuated to about 30mm Hg and the entire sample maintained at 3010.2'C (8610.4?F) for 48 hours for coals of higher rank than lignite; lignite will require 72 hours to reach equilibrium. The method can also be used to estimate the surface for extraneous moisture of wet coal; such moisture is the difference between the total moisture of the coal and the natural bed moisture. In the 'Hand Book of Coal Analysis', the usage of inherent or equilibrium moisture is also discussed and for better appreciation is reproduced below: The various forms of moisture in coal are described according to the manner in which they are measured by some prescribed standard method. These forms are (1) inherent moisture, (2) surface or free moisture, (3) total moisture, (4) air-dry loss moisture, (5) residual moisture, (6) as-received moisture, (7) decomposition moisture, and (8) water of hydration of mineral matter. Inherent moisture (bed moisture, equilibrium moisture, capacity moisture....
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....ure is obtained by subtracting equilibrium moisture from total moisture. However, there is no sharp dividing line between inherent moisture and surface moisture" The measurement of inherent moisture depends on the fact that its vapor pressure is less than that of surface moisture. Drying, pulverizing, dust-proofing, and the general handing of coal all depend on surface moisture data since wet coal is very difficult, and in some instances almost impossible, to pulverize. 5.2.7. No evidence by way of illustration or example was produced before us to show that the formula used by the Revenue for arriving at GCV on a moist mineral free basis is wrong. We have already seen that the submissions as regards the method of calculation are also incorrect and reliance on ASTM D388 is also not correct since it is mainly used for classification and ranking of coal and D388 itself provided that various parameters have to be determined according to the tests and sampling prescribed for the purpose and wherever calculations have to be made, formulae are provided in D 388.. It is the use of one of these formulae that has been done by the Revenue. There is no basis for the submission that the steam ....
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....itions, any reference to the GCV made in the certificates has to be construed as a reference made to calorific value for all practical and technical purposes. What is determined in the laboratory is the GCV value and the NCV is derived applying a formula. Reference is invited to section 7 of the extracts from the book titled 'Hand Book of Coal Analysis' by James G Speight. (iv) A perusal of the contracts for supply of coal, entered into by almost all importers with their overseas suppliers, would reveal that they are categorically mentioning to take gross calorific value (GCV) for the purpose of calculation of calorific value and there is no reference to net calorific value in such contracts" (v)Further, various expressions and equations adopted in ASTM standards for the purpose of conversion also refer to calorific value in the context of gross calorific value. Also, the load-port certificates presented by the importers before the Customs authorities indicates that gross calorific value has been obtained while arriving at various parameters like air-dried basis, as-received basis etc. (vi) In view of the above, the point raised above does not merit consideration. 5.3.2....
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....pose of determination of the value and for the purpose of identification of the goods cannot be said to be ignored for the purpose of assessment. In the present case, the load port certificates submitted by the appellants have been accepted and even where tests have been conducted there are no disputes about the results of the test. Therefore we do not find anything wrong. 5.4.3. As for the opinion of the Joint Director, CRCL, GCV (Moist mineral free) was obtained by using Parr formula and the parameters reported in the load port certificates. These observations of the joint director are yet to be discredited or proved to be wrong by any of the parties. In this case, there is no submission or evidence produced to show that the Joint Director was wrong in the opinion tendered by him. Moreover, the opinion given by the Joint Director was made known the appellant. Instead of challenging the expert opinion relied upon, with the support of technical literature, the appellants are resorting to technicalities. In a similar case, we found that the Joint Director had been cross- examined and he had reiterated his views. 5.5. Wherever the goods are of Indonesian origin, duty exemption in t....
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....ing that order. 5.7. Reliance placed on the test report of CRCL to arrive at GCV(moist, mineral matter free) is not correct since sulphur content in the sample has not been determined. 5.7.1. We agree with the submission of the learned special consultant for Revenue that even if sulphur content in the sample has not been determined by CRCL, there is nothing wring if the sulphur content as reported in load port certificates submitted by the appellant is taken for this purpose. 5.8. Notification No.12/2012-CE (Sl.No.67) extends the benefit of 1% concessional excise duty subject to the condition of not taking credit of inputs and appellants are eligible for this benefit. 5.8.1. Since the appellant has not taken credit of CENVAT in their inputs, they are eligible for the benefits. The question as to whether benefit of Notification No.12/2012 has to be extended to the importers or not was considered in Paragraphs 60 to 67 to reach the conclusion that importers were not eligible for the benefit. Nevertheless some of the points we would reiterate and thereafter proceed to consider the case law that has been relied upon by the learned counsel. 5.8.2. The first legal issue submitted by....
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....hetic resins is manufactured from raw Naphtha 'on which the appropriate amount of duty of excise has already been paid'. The High Court held that imported goods would not be eligible for the exempted rates under the notification as it is obvious that imported goods cannot satisfy the condition relating to payment of excise duty on raw-material. We read the relevant observation in the judgment :- 7. .................The submission was advanced by urging that the rate of countervailing duty should be in accordance with the exemption Notification No. 302/79, dated December 4, 1979 issued by the Central Govt. in exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excises Rules, 1944....................... The perusal of the Notification indicates that in respect of high Density polyethylene the rate of duty prescribed is 27 per cent instead of normal duty of 42 per cent. This partial exemption from payment of duty is prescribed by the Notification provided the two conditions are satisfied, and those conditions are (i) artificial or synthetic resins are manufactu....
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....w materials. Once CENVAT credit is taken there is no case. That being the position, the obvious conclusion that emerges from the Larger Bench decision of the Tribunal in the case of Priyesh Chemicals is that importer would not be eligible since it cannot be said that CENVAT credit has not been taken and therefore once he cannot show that CENVAT credit has not been taken, the obvious conclusion is that he is not eligible for the exemption. 5.8.6. The reliance of the learned counsel on the decision in the case of Sudharsan Pine Products Ltd. Vs. CC, Chennai [1999(111) ELT 78 (Tri.)], in our opinion, also does not help their case. In the said case, the issue was import of Oleo pine resin and availment of exemption subject to a condition that oleo pine resin was manufactured without aid of power. In that case, there were two tariff headings. One covered the resin manufactured by using power and the other one covers without using the power. In view of the fact that the importer has to be considered as a manufacturer while considering the levy of excise duty, if the appellants claim was accepted, the mere declaration of importer would have been enough for claiming the classification of....
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....t. Ltd. considered these decisions. 5.8.8. The learned counsel has dealt with the clarification issued by the Department and its applicability. He submits that subsequent to the issuance of the Notification No.1/2011, Board issued a clarification vide F.No.B1/3/2011-TRU dt. 25/03/2011 and he reproduced Para 10 of the said circular which we reproduce for better appreciation: "Doubts have been raised about the applicable CVD rate on the 130 items, which Excise Duty @ 1% has been levied vide Notification 1/2011-CE dated 01.03.2011, when imported. It is further learnt that manual bills of entry have been permitted at certain customs locations as 1 % CVD rate was not available in the system. This concessional rate of 1916, however, is available only if the Cenvat Credit on inputs and input services is not availed of; otherwise all these items attract 5% Excise duty as prescribed vide Notification 2/2011-CE dated 01.03.2011 and Tenth Schedule to the Finance Bill. At the time of updating of ICES, the Directorate of Systems had been advised not to feed Notification 1/2011-CE dated 01. 0....
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....of the department in a matter involving a similarly worded Notification, the Tribunal has held that: "The eligibility to credit is only when the goods are manufactured in India and credit is not available on imported goods. Therefore, the stand of the department is that since the imported goods are not the goods on which Cenvat credit or Modvat credit can be taken the Notification obviously does not cover imported goods, is well founded. In this view of the matter, we hold that the Commissioner (Appeals) is wrong in extending the benefit of the Notification to the importers" In the Final Order adverted to earlier, vide Paras 60 to 67, Hon'ble Tribunal has taken the view that the subject imports are not eligible to the benefit under Notification 12/2012-CE [SI.No.67]. This ratio is squarely applicable to the present case. This decision is in line with the underlying policy objective of the aforesaid notification. In the normal course, a domestic manufacturer of coal would pay full C Ex duty on the value of coal cleared by him and avail of C Ex duty/ S tax credit as admissible. Thus, eff....
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....able thereon.' In the present case, admittedly only goods are exported and not the tax. Therefore unlike the domestic manufacturer of coal who was not eligible for the exemption under Notification No.12/2012 if he had availed the CENVAT credit on inputs and input service (which is nothing but neutralization of tax), an importer cannot be allowed the benefit because admittedly there is neutralization of tax in the exporting country and if the manufacture has taken place in India, once neutralization of tax had taken place, the benefit would not be available. Therefore the Supreme Court's decision also is not helpful to the appellant. 5.8.11 In the case of Bhagwati Enterprises [2009(236) ELT 602 (Tri. Del.)], while examining the scope of Notification No.6/2000 dt. 01/03/2000 with reference to imported goods, according to the learned counsel, the Tribunal had considered the decision in the case of Motiram Tolaram and held that presumption regarding duty having been paid on the raw materials cannot be made. This was the view taken in the case of Motiram Tolaram and the Tribunal had not followed this view. However, we have to bear in mind that while applying the decisions, we have to l....
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....re in the case of M/s. Coastal Energy Pvt. Ltd. that though the intention of the Government to reduce the cost of the Power Industry, applying definition of bituminous coal rigidly and treating bituminous coal and steam coal as separate was not correct.' For better appreciation, we reproduce these observations with the reproduced Paragraphs by the learned counsel and then give our comments. 8. Learned sr. counsel dealt with these two Paragraphs and argued that from the observation of the Hon'ble Finance Minister what emerges is that the intention of the Government was to give relief to the power producers. However even though intention becomes quite clear, what emerges from the speech is that after the exemption was introduced, there was rampant misclassification. Obviously, the misclassification mentioned in the Finance Ministers speech has to be taken as the one indulged by the importers and not by the Government. We are also not able to accept this submission that this would mean that the intention of the Government was to exempt all types of steam coal and even if it was bituminous coal, the intention was to exempt and give relief to power producers. If that was the case, ther....
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....l and looks very attractive, the Tribunal decisions cited by learned counsel for the appellant have not exactly agreed with this submission. The view taken to allow exemption was that the inputs for the imported goods under consideration in those cases were not leviable to central excise duty even in India. On this analogy, benefit was allowed. As we observed, in the present regime of indirect taxation, credit is available to coal manufacturer in respect of inputs, input service and capital goods and therefore, if he availed the benefit of Cenvat credit in respect of in all these items, he becomes liable to pay 6% excise duty and therefore, we cannot come to a categorical conclusion that the input services or capital goods used for the manufacture of coal abroad and sent to India have suffered such duty at all. In this case, the burden to show that he is eligible would fall on the importer since Indian manufacturers are eligible for credit on inputs and input service or capital goods. Inputs may be excluded since coal is extracted from earth. Credit on capital goods or input service would be definitely available and therefore, even an Indian manufacturer would not be eligible for l....
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....coal manufacturer in respect of inputs, input service and capital goods and therefore, if he availed the benefit of Cenvat credit in respect of in all these items, he becomes liable to pay 6% excise duty and therefore, we cannot come to a categorical conclusion that the input services or capital goods used for the manufacture of coal abroad and sent to India have suffered such duty at all. In this case, the burden to show that he is eligible would fall on the importer since Indian manufacturers are eligible for credit on inputs and input service or capital goods. Inputs may be excluded since coal is extracted from earth. Credit on capital goods or input service would be definitely available and therefore, even an Indian manufacturer would not be eligible for lower rate of duty straightaway. Therefore the decisions cited by even if submissions made by Revenue in which we find considerable force, are not applicable. 65. In view of the above, we have to agree with the submission that the importers could never have shown that they fulfilled the condition for claiming lower rate of duty under the Notification 12/2012-C.E. 5.10.2 In Para 8, even though the learned counsel claims to hav....