TaxTMI 
TaxTMI 
2018 (7) TMI 1595
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....0 12 and Latex Collection Cups falling under Chapter Heading 3926 90 99 of Central Excise Tariff Act. In the other unit, they cleaned the scrap rubber to get crumb rubber. The Central Excise department has issued a show-cause notice dated 9.1.2007 to the appellants covering the period 2003-04 to 2006-07 demanding a total duty of Rs. 68,52,988/- and also proposing to impose penalties under Section 11AC of the Central Excise Act, 1944 and Rule 25 of Central Excise Rules, 2002. Vide Order-in-Original No.4/2007 dated 17.5.2007, the Commissioner (A) has confirmed the demand and appropriated an amount of Rs. 13,54,109/- already paid by them towards the duty confirmed and has imposed equal penalty under Section 11AC of Central Excise Act, 1944. Th....
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....acking. They have submitted that the issue has been clearly settled by Mumbai Bench of the Tribunal in case of CCE vs. Gujarat Reclaim & Rubber Ltd.: 2006 (195) ELT 44 (Tri.-Mum.) wherein it was held that crumb rubber powder obtained by crushing smaller pieces of rubber cuttings having similar properties and characteristics as input waste - Mere changing of physical form does not amounts to manufacture - Crumb rubber powder not dutiable. Similar opinion was given by Delhi Bench of the Tribunal in the case of Elgi Rubber Products Ltd. vs. CCE: 2002 (145) ELT 112 (Tri.-Del.) and Munch Food Products Ltd. vs. CCE: 1999 (114) ELT 521 (Tri.). He has also submitted that in the case of Indian Organic Chemicals Ltd. vs. Collector of Customs and Exci....
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....er the bona fide belief that the activity of processing of scrap rubber to form crumb rubber does not amount to manufacture. Therefore, it could not be said that there was any deliberate intention on the part of the appellant to refrain from paying duty with the intention to evade payment of duty. Therefore, the period of limitation and penalty under Section 11AC of Central Excise Act cannot be maintained. 4. The learned Departmental Representative reiterating the findings in the Order-in-Original and submitted that the Commissioner has considered all the submissions of the appellants and has given a categorical finding to that effect. The Commissioner has held that: "The definition of „manufacture" as given under Section ....
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....as the scrap in different forms, as obtained from the rubber estates. In fact, crumb rubber, is prima facie, distinguishable from the various forms of scrap. Crumb rubber is a commercially known product which is bought and sold in the national as well as international markets. The appellants are exporting ISNR 20/ISNR 10. This evidences the commercial identity and marketability of the product. The contention that is neither a finished product or manufactured article, as it remains a raw material in one of its primary forms is not correct. If a product, obtained as a result of subjecting of some materials to some process, is commercially a different product which is bought and sold in the trade, it can be taken as manufactured product irresp....
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....fferent types of rubber produced naturally and to convert it into crumb rubber. The processes undertaken is more primitive than the activity discussed in Gujarat Reclaim and Rubber Products Ltd. cited supra, therefore by no stretch of imagination the appellant's activity cannot be treated as amounting to manufacture. The learned departmental representative has tried to argue on the basis of entries in the Central Excise Tariff Act. However, as discussed above, the burden to prove that there is manufacture is not discharged by the department beyond reasonable doubt. We find that whereas the appellants have produced the certificate issued by the Rubber Board but the department has not produced any evidence to negate the certificate thus issue....