TaxTMI 
TaxTMI 
2018 (3) TMI 1125
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.....04 of the First Schedule to the Central Excise Tariff Act, 1985 and clearing the same without payment of duty attracted nil rate of duty. An investigation was conducted in the factory premises of the appellant in November, 2003 and samples were drawn which were sent to the CRCL for testing and after not satisfying with the result of the samples, the samples were sent to Shriram Institute for Industrial Research for re-testing. Thereafter the statements of certain buyers were recorded and it was also found during the course of investigation that there was some manipulation was done in the invoices of the suppliers. On the basis of investigation, a show cause notice was issued to the appellant on 29.03.2005 to re-classify the product, namely, HRBO flakes under heading 38.23 of the Central Excise Tariff Act, 1985 on the premise that the appellants were not manufacturing HRBO flakes and they were manufacturing stearic acid, therefore, the appellants were liable to pay duty for the period April, 2000 to December, 2003 by invoking the extended period of limitation. The matter was adjudicated, the demand of duty of Rs. 4,81,90,550/- along with interest was confirmed and equivalent penalt....
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....iod cannot be invoked in this case. To support his contention, he relied on the decision of the Tribunal in the case of Accurate Chemicals Industries vs. CCE-2014 (300) ELT 451 (Tri.) which has been affirmed by the Hon'ble Allahabad High Court reported in 2014 (310) ELT 411 (All) and Jammu & Kashmir Cements Ltd. vs. CCE-2014 (314) ELT 334 (T). 6. He further submits that during the course of adjudication, the department has recorded the statements of 20 buyers who purchased 7-8% of the total production, and they have made inculpatory statements against the appellants. During the course of adjudication, buyers were called for cross examination, none turned up except one of them, thereafter no one was called for cross examination. Therefore, there is violation of section 9D of the Central Excise Act, 1944. He also submits that the person who was appeared for cross examination has deposed in favour of the appellant during the course of cross examination. Therefore, the statements of the buyers cannot be relied on to allege that there was mis-statement or suppression on the part of the appellants. To support this, he relied on the decision of Hon'ble Punjab & Haryana High Court in th....
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....BO under chapter heading 15.04 and stearic acid under heading 38.23 separately. In July, 2002, the samples were drawn but the Revenue has failed to produce results of those samples whether those samples have been tested or not. When the fact of manufacturing and clearance of HRBO was in the knowledge of the department during the relevant time, therefore, no allegation of suppression cannot be alleged against the appellant and the extended period of limitation is not invokable as observed by this Tribunal in the case of Hindustan Petroleum Corporation Limited (supra) wherein this Tribunal has observed as under: "6. After considering the submissions, we find that in this case the appellant Company have filed declaration on 23rd October, 2000 to classify their product under sub-heading 2710.90 which was very well in the knowledge of the departmental officers. If the department was of the view that their product is to be classified under sub-heading 3811.00, the investigation would have been started immediately on filing the classification list which they have failed to do so. We also find that the investigation in this case has started in only November 2003 and show-cause not....
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....the statement of Shri A.K. Jain, the production-in-charge, who had admitted that the product had the boiling point within the range as per the tariff heading and the flash point was below 250C and he had also stated that all these products are having suitable hydrocarbon mixtures for use in spark ignition engine. The appellants contested this by stating that this only reflected the understanding of Shri A.K. Jain but the fact remains that they were selling the product as a solvent to their customers and in the absence of a proper test as regards the characteristics and its end use, mere opinion of their manager would not be sufficient to revise the classification. The decision cited by the Ld. Advocate before us in support of his contention is of M/s. Indu Nissan Oxo Chemical Industries Ltd. v. CCE, Vadodara, as reported in 1998 (101) E.L.T. 201 (Tri.). The Tribunal observed that the department is required to show that the product is suitable for use, which has been judicially determined to mean actually, practically and commercially fit for the use described . The Tribunal in the cited case also observed that there must be evidence of more than a casual, incidental, exceptional or....
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....n of fact or in contravention of any provision or rules but there should be wilful suppression. [Re : M/s. Easland Combines, Coimbatore v. The Collector of Central Excise, Coimbatore, C.A. No. 2693 of 2000 etc. decided on 13-1-2003]. By merely claiming it under heading 3926.90 it cannot be said that there was any wilful misstatement or suppression of fact. Hence, there was no justifiable ground for the Tribunal for invoking the first proviso to sub-section (1) of Section 11A of the Act." 14. We have also seen that the appellant has also relied on the decision of this Tribunal in the case of Accurate Chemicals Industries (supra) wherein this Tribunal has held as under: "7.1 Though with effect from 1-10-1996, self-assessment has been introduced and the monthly ER-1 return filed by an assessee are not required to be assessed by the Range Superintendent (RO), in terms of the following instructions issued by the Central Board of Excise & Customs (CBEC) not only every ER-1 return filed by an assessee is required to be scrutinized by the RO for correctness of rate of duty applied to the goods cleared, arithmetical accuracy of duties/amounts dues and payable; Cenvat credit avai....
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.... Moreover Apex Court in a series of judgments - CCE v. Champher Drugs & Liniments reported in 1989 (40) E.L.T. 276 (S.C.); Padmini Products v. Collector reported in 1989 (43) E.L.T. 195 (S.C.); Pushpam Pharmaceuticals v. CCE reported in 1995 (78) E.L.T. 401 (S.C.); Anand Nishikawa Co. Ltd. v. CCE, Meerut reported in 2005 (188) E.L.T. 149 (S.C.); Continental Foundation Jt. Venture v. CCE, Chandigarh reported in 2007 (216) E.L.T. 177 (S.C.) has held that something positive other than mere inaction or non-payment of duty is required for invoking extended period under proviso to Section 11A(1) and that suppression means failure to disclose full information with intent to evade the payment of duty and mere omission to give certain information is not suppression of fact unless it is deliberate with intention to evade the payment of duty. The above condition for invoking extended period prescribed in these judgments is not satisfied in this case." 15. Learned Counsel also submitted that when the extended period of limitation cannot be invoked in this case, the Tribunal is not required to go into the merits of the case as held by the....
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....oods in question are HRBO flakes or stearic acid. Further, the test reports of SASMIRA Institute have not given any finding only have given test report and composition thereof, therefore, it cannot be said that the samples drawn of HRBO flakes or stearic acid. Further, we find that the opinion was sought for the chemical composition of HRBO flakes. The CRCL provided opinion as under: The specification or physio-chemical data for Hydrogenated Rice Bran Oil Flakes (HRBO Flakes) were not available in the technical literature. However, the following were the related IS a specification: Rice Bran Oil IS 3448-1968 (Reaffirmed in 1990) Partially Hydrogenated IS 12361-1968 Rice Bran Fatty Acids Rice Bran Fatty Acids IS 12068-1987 Stearic Acid Technical IS 1675-1971 Fatty Acids like stearic acid, Oleic Acid, etc. can be obtained by splitting but not by Hydrogenation of vegetable oils. The Hydrogenation of vegetable oils like rice Bran Oils does not coverts into Hydrogenated fatty acid but in hydrogenated triglyceride of fatty acid (FAT). Hydrogenated il and fatty acid are two different products and different between them can ....
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....rment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 15. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 16. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a gazetted Central Excise officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The ri....
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....their statements cannot be considered 7 of 10 CWP No.12747 of 2016 as evidence." 21. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgement of the Supreme Court in C.C. V Bussa Overseas Properties Ltd, 2007(216) ELT 659 (SC), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd v C.C., 2001 (137) ELT 637 (T). 22. It is clear, from a reading of the Order-in-original dated 4.4.2016 supra, that Respondents No.2 has, in the said Orders-in-Original, placed extensive reliance on the statements, recorded during investigation under Section 14 of the Act. He has not invoked clause (a) of sub-section (1) of Section 9D of the Act, by holding that attendance of the makers of the said statements could not be obtained for any of the reasons contemplated by the said clause. That being so, it was not open to Respondent No.2 to rely on the said statements, without following the mandatory procedure contemplated by clause (b) of the said sub-section. The Orders-in-Original, dated 4.4.2016, having been passed in blatant violation of the mandatory procedure prescribed by Section 9D of the Act, it has to be ....