2016 (5) TMI 779

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.... Excise Duty. This option may be exercised within one month of the date of receipt of this order.  (ii) I confirm the demand of duty of Rs. 20,63,149/- (Rs. Twenty lax Sixty Three Thousand One Hundred Forty Nine only) on the clearances of coated calcite powder effected by the assessee during May, 95 to July 99 under Section 11A (I) of Central Excise Act, 1944 and order to recover the same from the assessee. (iii) I impose penalty equal to the Central Excise duty of Rsw.20,63,149/- (Rs. Twenty Lax Sixty three thousand one hundred forty nine only) on the assessee under Rule 173 Q of the Central Excise Rules, 1944 in respect of clearance made during the period from May, 95 to 27.9.96 to 27.9.96 and under Section 11AC of Central Excise Act, 1944 in respect of clearance made during the period from 28.09.1996 to July, 1999. However, I do not impose separate penalty under Rule 9(2), 52A & 226 of the erstwhile Central Excise Rules, 1944.  (iv) I also order for charging interest under Section 11 AB on the amount of duty of Rs. 20,63,149/- (Rs. Twenty lac sixty three thousand one hundred forty nine only).  (v) I impose a penalty of Rs. 1,00,....

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....orities orders. 6. We have considered the contentions of both sides. We find that it is second round of litigation inasmuch as, in the earlier round the case was remanded by CESTAT vide order dated 05.02.2004 for denovo adjudication after affording cross-examination of the chemical examiner as the same had not been permitted for the first time. 7. We find that the period involved in this case is February, 1995 to July, 1999. The samples were drawn on 31.07.1999. In its earlier report dated 31.08.1999 the Chemical Examiner essentially stated that the sample under reference is a mineral calcite converted into powder form by grinding only:- The earlier test report is reproduced below:- "Report The sample is in the form of dull white fine powder. It is essentially composed of calcium carbonate together with small amount of silicious matter. It has the characteristics of mineral calcite. (S.K. Mittal) Chemical Examiner Dt. 31/08/99 No. 136/CHEM/MISC./J/94.CLJ./MISC.40/11.8.99 Note:- The chapter 25 of C.E.T. covers, in general, mineral products only in the crude state or washed (including washing with chemical substances to eliminate ....

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.... DIVISION CHEMICAL EXAMINER 5.5.00 142, B HIRAN MAGRI, SECTOR -11 UDAIPUR - 313002 RAJASTHAN Copy may be forwarded to the concern ASSTT. Commissioner, Central Excise Division 136-CHUM/Misc./J/94/CLJ/Misc./147-B/9-2-2000/5-5-2K Report The sample is in the form of white powder. It is essentially composed of Calcium Carbonate together with small amount of siliceous matter (Silicates of Magnesium and Aluminum). It is coated with fatty matter. Content of Calcium Carbonate = 97.9 % by weight Content of fatty matter = 0.4 % by weight; the rest being siliceous matter The test findings indicate the sample under reference to be coated calcite powder. It has Hydro- phobic characteristics. In view of the specific query regarding classification under CETA it is classified that such type of treated/coated calcite powder having Hydro-phobic characteristics will be correctly classified under sub Heading 3824.90. Sealed remnant sample returned. FORWARED to:- THE INSPECTOR/SUPRINTENDENT CENTRAL EXCISE DIVISION CHEMICAL EXAMINER 142, B HI....

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....ed by mixing or subjected to processing beyond that mentioned in each heading or sub-heading." It is evident from Chapter Note 2 that powdered mineral substance are covered under this chapter. 9. We find that Revenue had relied upon HSN Note pertaining to Chapter Heading 38 24 which is reproduced below:- "This category also includes finely ground natural calcium carbonate (Champagne white), each particle being coated, by a special treatment, with a water-repellent film of stearic acid. (Note No.23) It is evident that to get covered under 38.24 each particle is required to be coated by a special treatment with water repellant film of steric acid. The appellant has contended that it did not have any coating machine at all. At this stage it is pertinent to quote paras 8 & 9 of the impugned order is as follows:- "8. It is evident from Chapter Note 2 to Chapter 25 of the Tariff that only those products are covered which have been washed ( even with chemical substances, eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, or concentrated by flotation, magnetic separa....