AI Drafter 
TaxTMI 
TaxTMI 
2019 (1) TMI 557
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....n 11A of the Central Excise Act along with penalty under Section 11AC of the Central Excise Act and Rule 25 of the Central Excise Rules, 2002 and applicable interest under Section 11AB/11AA of the Central Excise Act. The Commissioner, vide OIO No. BLR-EXCUS-003-COM-01-14-15 dated 28.05.2014, confirmed the proposed demand of duty on M/s BRPL and levied penalties on M/s BRPL and other appellants. The details of 7 appeals are as below. Appeal No/ Appellant Issue Period Duty Demand/ Penalty (Rs.) E/22501/2014 M/s BRPL Excise duty on branded gold/silver coins 01.07.2012 to 30.05.2013 20,91,82,176 E/22502/2014 M/s BRPL Excise duty on gold/silver bars manufactured out of gold dore bar 01.04.2008 to 16.01.2012 159,31,15,270 Excise duty on unbranded gold/silver coins 01.03.2011 to 16.03.2012 1,55,00,412 Excise duty on branded gold/silver coins 01.01.2012 to 16.03.2012 5,60,420 17.03.2012 to 30.06.2012 1,37,71,504 Excise duty on gold jewelry 17.03.2012 to 07.05.2012 23,24,097 Differential duty at 6% demanded on unbranded gold/silver coins and jewelry 17.03.2012 to 30.06.2012 45,93,477 Short payment of Central Ex....
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....ld Bars out of Dore Bars as follows: The Appellant manufactures gold bars out of dore bars procured from M/s Hutti Gold Mines Limited ('HGML') and other traders; The 'dore bars' contain around 90% gold, 6/7% silver and other impurities; the dore bars are first melted and granulated; granules are then dissolved in aqua regia; the solution is filtered to separate the silver precipitated in silver chloride form; the solution is further treated with chemicals to precipitate gold from the solution; Gold precipitated as powder is separated by filtration process; Gold powder is washed thoroughly and dried; The powder is melted to get 999 fine (99.9% gold) purity gold which is cast into sheets which are further rolled to reduce the sheets into requisite thickness before it is subjected to punching with the molds to produce bars of various sizes and weights. 2.2. The Ld. Counsel traced the legal history of Notifications granting exemptions to 'Primary Gold' converted from 'any form of gold': (i). For the first time by way of Notification No. 157/90-CE dated 16.11.1990, the Central Government granted exemption to 'primary gold converted from any form of gold' falling within Chapter ....
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....cation No. 6/2000. On an appeal filed by the Department, the Hon'ble Supreme Court, in CCE, Vadodara v. Hindalco Industries Ltd; 2015 (325) ELT 427 (SC), held that the 'gold mud', which also emerged as an intermediate product, is itself a form of gold and therefore benefit of exemption was to be extended to gold bars manufactured by the Appellant from 'gold mud'. Even though conflicting views were taken by the Ld. Members of the Hon'ble CESTAT in the year 2005/ 2006, the Central Government did not feel the need to clarify the expression 'any form of gold' even in the subsequent Notifications. (v). Notification No. 5/2006-CE dated 01.03.2006 (relevant for the present case) continued to grant exemption, at Sl. No 21, on identical lines and defined primary Gold to be gold in any unfinished or semi-finished form and includes ingots, bars, blocks, slabs, billets, shorts, pellets, rods, sheets, foils and wires. (vi). Notification No. 11/2010-CE dated 27.02.2010, was issued amending 05/2006-CE, by way insertion of Sl. No. 21A, seeking to levy concessional duty on gold bar (other than tola bars) bearing manufacturers engraved Sl. No. and weight expressed in metric units and manufactu....
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....e bar which was procured from HGML w.e.f 17.01.2012. 3. Appellants submitted that the findings of the Ld. Commissioner revolves around two issues i.e. One, whether the detailed process undertaken by the Appellant for the manufacture of gold bars from the stage of 'dore bar' can be equated with primary gold "converted" from any form of gold so as to fall within the scope of Sl. No. 21 of Not. No. 5/2006 and secondly whether 'dore bars' can be considered as 'any form of gold' within the scope of Sl. No. 21 of Not. No 5/2006. He submitted that the Apex Court's decision in case of Hindalco Industries, supra rendered in the context of identical exemption granted vide Notification No. 6/2000-CE dated01.03.2000 decides both the issues in favour of the appellants. 4. Ld. Counsel submitted that in the case of process of manufacture of gold bar from the stage of copper ore (as in the case of Birla Copper) was that the primary input for manufacturing gold bar was 'anode slime' and that the said anode slime or the intermediate products i.e. 'dore anode' and 'gold mud', which came into existence for the first time in the factory during the process of manufacture cannot be considered as 'a....
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....te stages of 'dore anode', 'gold mud' and 'gold powder' emerged. On further process of filtration etc., gold bar was manufactured. The Apex Court examined the said process and upheld the order of CESTAT by accepting the process to be in the nature 'conversion'. In the instant case as well, the entire process of refining is nothing but 'conversion' of primary gold with aid of power from another form of gold and therefore would fall within the scope of Sl. No. 21 of Not. No. 5/2006. 5. Appellants submitted that the department, vide para 4.8 of the show cause notice, has classified 'dore bar' under Chapter sub-heading 7108 13 00 of the Central Excise Tariff Act, 1985 ('CETA') as -- Other semi-manufactured forms: HSN and CETA has been totally aligned at Heading level and the HSN Explanatory notes specify that as under: "This heading covers the various unwrought, semi manufactured or powder form of gold or silver alloys (as defined in the General Explanatory Note) or of gold plated with platinum. The heading does not, however, cover gold clad with precious metal. Since gold Dore bar is an alloy of gold and silver, it would be treated as gold by virtue of Note 4 and 5 to Chapter 71....
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....cess and cannot be considered as mere conversion cannot be sustained. 7. Appellants submitted that Commissioner, vide para 22.3.7, held that the amendment to Sl. No. 21 of Not. 5/2006 vide Notification No. 25/2011-CE dated 24.03.2011 was clarificatory in nature and thus, had retrospective effect inasmuch as the purpose of the amendment was to clarify the ambiguities in the entry and bring out the intended meaning to the words 'any form of gold' and 'converted/ conversion'. Further, the Ld. Counsel for the Revenue at Para 4.5 of WS of Revenue Counsel submissions has argued that the amendment to the Sl. No. 21 had clarified that 'any form of gold' did not include gold ore, concentrate or dore bar and merely made explicit that was implicit in the expression "from any form of gold". Therefore, the same is clarificatory in nature and has retrospective effect. It is a settled law that any amendment to an exemption notification is prospective in nature and therefore, what is expressly stated in the notification cannot be said that it was existing all along nor can it be stated that the same has retrospective effect as per ratio of UOI vs. Martin Lottery Agencies Ltd 2009 (14) STR 593(S....
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....ble to pay duty even after the issue of Not 5/2011, started paying duty from 17.01.2012 Appellant: Appellant has started discharging duty w.e.f 17.01.2012 in view of the amendment to Sl. No. 21A of Not No. 5/2006 in terms of which 'gold dore bar' was defined as gold bar having gold content less than 95%, where as it was defined to be having gold content less than 95% in 5/2011. (ii). Revenue: the decision of Apex Court in the case of Hindalco Industries, supra is not applicable to the present case as the decision of Hon'ble Tribunal was rendered in 2007, when the amending Notification No. 25/2011 clarifying the scope of expression 'from any form of gold' was not issued. Appellant: Apex Court has interpreted an identically worded exemption notification and concluded that 'gold mud/ dore anode' was falling within the scope of term 'any form of gold'. Therefore, is applicable to the present case; Not. 25/2011 has only prospective effect and cannot be construed to be clarifying the scope of the entry for the past. (iii). Revenue: the dispute in the present case is materially different from the case of Hindalco Industries; in the said case the fundamental issue was at what s....
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....would not cover 'articles made of glass'. It negates the finding of ld. Commissioner that 'any form of gold' refers only to ornaments of gold/ articles of gold. Further, the distinction made by the Apex Court of the phrase 'in all forms' from 'in all kinds' has no relevance to present facts considering the very nature of product in question i.e. gold, which can only manifest in different forms i.e. in primary forms such as bars, billets, sheets or finished articles of jewelry, ornaments, coins etc. Further, CTH 7108 covers gold in different forms i.e. gold in unwrought form, semi-finished form, powder form. 'Gold dore bar' being classifiable under CTH 7108 would undoubtedly also be 'any form of gold'. (vi). Revenue: CESTAT in Stay order in case of Hutti Gold Mines Company Limited (2014 (304) ELT 105 (Tri-Bang), had taken a prima facie view that gold ore cannot be considered as 'any form of gold' on the basis that 'gold ore' was classifiable under the Chapter 26 of CETA and thus not covered under Chapter heading 7108. Appellant: the input material in the present case is gold dore bar which is undisputedly classifiable as 'unwrought form of gold' under Chapter heading 7108. The....
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....as inserted a new Chapter Note by virtue of Finance Act, 2011 providing for the deeming fiction by which process of refining amounts to manufacture, fortifies the view that prior to the insertion of this Chapter Note the said process did not amounts to manufacture. In this regard reliance is placed on the decision of the Tribunal in the case of Mahaveer Tube Industries v. Commissioner of Central Excise reported at 2008 (231) ELT 499 (Tri.-Ahmd.) wherein the issue involved was whether process of drawing / re-drawing of pipes / tubes amounts to manufacture prior to introduction of Chapter Note 3 to Chapter 73. The Tribunal held that if the activity was covered by the definition of Section 2(f), there was no need to introduce Chapter Note 3 deeming the activity of drawing / re-drawing to have been the manufacturing activity. The Tribunal held that the Chapter Note makes it clear that it only extends the ordinary meaning of the manufacture as available under Section 2(f) and is to the effect that from the date of the introduction of such process shall amount to manufacture. Therefore, the scope of Chapter Note cannot be extended to the period before its birth. Accordingly, it was held ....
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....t contest the issue of manufacture before the adjudicating authority even if the said process does not amount to manufacture. 12. It is submitted that the extended period of limitation under the proviso to Section 11A (1) can be invoked only in a case where any duty of excise has not been levied or paid or has been short-levied or short-paid by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or the rules made there under, with intent to evade payment of duty. In the absence of these ingredients demand can be issued only for the normal period of one year. The Appellant submits that in the instant case, none of the ingredients for invocation of extended period are present. The Appellant has claimed exemption from payment of duty on the gold bars refined from dore bar under Sl. No. 21 of Not No. 5/2006 dated 01.04.2006 under a bona fide belief that the term 'other form of gold' would cover dore gold bar having gold content of 90%. 12.1. The Appellant's bona fide belief is fortified by the manner in which the amendments have been carried out to the basic Not. No. 05/2006. As seen supra, for the ....
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....Notification No. 6/2000 was subject matter of interpretation by the Hon'ble CESTAT and Hon'ble Supreme Court and as is evident from the detailed discussions made at para 27 to para 38 supra, different views are possible inasmuch as while there are two conflicting views by the Members of the Hon'ble CESTAT, the Hon'ble Supreme Court has given another interpretation to the entry. It is a settled law that longer period of limitation is not invokable in difference of opinion matters. Reliance is placed on the decision of Hon'ble CESTAT in case of British Airways vs CCE, Del 2014 (36) STR 598 (Del), wherein it was observed that the fact that there is difference of opinion between the two Members of the original Bench itself establishes the fact that the legal issue is complex issue requiring legal expertise to settle the same. In such a scenario, if an assessee entertained a bona fide belief that inasmuch as the service is not being received by him, and he is not required to pay any tax, he cannot be blamed for the same. Reliance is also placed on the decision of Hon'ble Tribunal in case of Byco International & Others vs. CCE, Delhi 1993 (49) ECR 126 (Tri), wherein the demand was set as....
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....mitted that dore bars procured from HGML / other traders (as applicable during relevant periods) gold undergoes a process of refining to obtain purity of 995 and above gold. The pure gold which obtained is in the form of powder. The powder is melted and casted to thick strips. Strips are slit in to the width as per the required diameter of the coins. From the slits, the blanks are cut as per the required diameter of the coin, which is known as plain coins. These plain coins are polished and pressed between two dies to get required figure/logo/weight/etc. The left-over strips (after cutting the blanks) are re-melted and the above procedure is repeated to get the coins. 15. The Ld. Commissioner held that in respect of the period 01.01.2012 to 16.03.2012, that the Appellants have taken credit on the principal inputs i.e. dore Bar used in the manufacture of coins from January 2012 and that Cenvat Credit has been utilized for payment of duty on the gold/ silver coins manufactured and cleared; therefore, the Appellants are not eligible for exemption on manufacture and clearance of branded gold/ silver coins as they have contravened the conditions of Notification No. 01/2011 dated 01.0....
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....r - Pg. No. 480-483). However, the other suppliers continued to sell gold in various forms to the Appellant without charging Excise duty as the sale was under a trading invoice (invoices from M/s Suresh Jewellery placed at Annexure Pg. No. 484-488). However, the Ld. Commissioner has held (Para 24.2.7.2) that on verification of this annexure, the Appellants purchased gold bullion under trading invoices issued from 10th May, 2012 only and thus, Appellants has no evidence of procuring gold bullion under Trading invoices prior to May, 2012 and that for the period prior to May, 2012, no evidence was placed before him to show that inputs used for manufacture of impugned gold and silver coins were sourced under non-cenvatable invoices. The Ld. Commissioner has therefore, held that the Appellants have taken Cenvat credit on the inputs used for manufacture of impugned gold and silver coins. The Ld. Commissioner has held that the Appellants have not produced any evidence of not availing credit prior to January 2012. The Appellants submit that it is an impossible condition to be fulfilled when the Appellants are stating that they have not purchased any dore bars which are duty paid from HGML.....
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.... the Appellants submit that Shri Ketan Dhruv (Refer Para 3 of Statement at page No. 122 of appeal paper book) indeed stated that records are maintained by them for availment and utilization of credit which is the (Annexure-10 register) seized by the department and that there are no other registers / records apart from the said seized register are maintained with regard to availment and utilization of credit. The separate registers maintained for recording the inventory like duty paid gold, non-duty paid gold, Cenvat register etc., evidences that the Appellant has not claimed CENVAT credit during the disputed period on any other input purchased during the month. As a result, it is abundantly clear that gold/ silver coins which were manufactured and cleared during the period 01.01.2012 to 31.04.2013 were made out of gold procured from other suppliers who had not charged excise duty. Therefore, the allegation of the ld. Commissioner and contention of the department that the Appellant had contravened the condition of Notification No. 1/2011-CE dated 01.03.2011 is liable to be set aside. It is further submitted that the department cannot just brush aside the evidences produced by the Ap....
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....e Appellant under Notification No. 1/2011-CE dated 01.03.2011 without contravention of the conditions mentioned in the said notification. The dore bars procured from HGML was only used for manufacturing serially numbered gold/ silver bar. Such serially numbered gold/ silver bars manufactured and cleared by the Appellants were subjected to Central Excise duty w.e.f 17.01.2012 at the tariff rate and as such there is no contravention of any exemption Notification. In view of the above, the Appellants submit that the branded gold/ silver coins were manufactured only out of gold procured from sources other than HGML who had not charged excise duty. 15.9. In respect of Gold coins manufactured during the period 01.05.2012 to 30.06.2012 & 01.07.2012 to 31.05.2013, the Ld. Counsel submitted that with effect from May 2012, the Appellants manufactured gold/ silver coins out of duty paid gold i.e. Dore bars procured from HGML on which duty of excise had been charged and exemption was claimed from payment of duty under Notification No. 12/2012 under Sl. No. 200 (II). Gold/ silver coins have been manufactured out of dore bar purchased on payment of duty from HGML from the month May 2012. This....
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....re, gold bar procured from HGMIL is also nothing but gold. There is absolutely no basis for distinction drawn between gold dore bar and gold. In as much as the gold dore bar is nothing but is a form of gold in terms of the CTH and HSN Explanatory notes. Without admitting that the Appellant has not taken Cenvat credit on the purchase of inputs used in the manufacture of branded gold coins, it is submitted that in any case, they are eligible for the benefit of Notification No. 2/2011-CE dated 01.03.2011 which grants exemption at reduced rate of 5% ad valorem and thus the demand of differential duty at the full tariff rate is without authority of law and liable to be set aside. 17. Regarding demand of duty of Rs. 23,24,097/- on the manufacture and clearance of gold jewellery for the period 17.03.2012 to 07.05.2012, the Ld. Counsel submitted that the SCN proposed to deny exemption, claimed under Notification No. 12/2012-CE, on the ground that the Appellants contravened the conditions contained in the Notification by availing Cenvat Credit on the principle input i.e. dore bar and utilizing it for the payment of Central Excise duty. The Ld. Commissioner has held that the demand is not....
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....qual to 6% of the value of exempted goods cleared. In this regard, the Ld. Commissioner has relied upon the decision of Larger Bench in the case of M/s. Nicholas Piramal (I) Ltd. - 2008 (232) ELT 37 (Tri.-LB). He submitted that they are procuring gold from various sources such as HGML, Suresh Jewellers etc., under trading invoices with none of the suppliers charging excise duty on the sale of gold prior to the period January 2012. From January 2012, HGML started charging excise duty on sale of dore bar to the Appellant. However, the said dutiable dore bar was exclusively used in the manufacture of serially numbered gold/ silver bar from January 2012 to May 2012 (evidence at D.18 at page 58 of appeal). 18.1. He submitted that during the period May 2012 to June 2012, the Appellant was utilising the duty paid dore bar for the manufacture of various goods such as serially numbered gold bars, gold jewellery, gold potassium cyanide, branded gold coin. In respect of those manufactured goods which were exempt, the Appellant reversed the CENVAT credit in terms of the provisions of Cenvat Credit Rules. This fact has not been disputed by the department. He submitted that once credit availe....
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....Appellants further submit that the demand with respect to this issue is Rs. 45,93,477/- and the period involved is 17.03.2012 to 30.06.2012. The SCN is dated 3.5.2013. The demand of Rs. 21,60,254/- for the period prior to April 2012 is barred by limitation since the issue was settled by the Larger Bench decision of the Tribunal in Nicolas Piramal cited supra which was subsequently reversed by High Court. 19. On the allegation of short payment of Central Excise duty of Rs. 82,192/- during the period 17.01.2012 to 30.06.2012, the Counsel submitted that the case of the department is that M/s. Dhruv Jewellers and Appellant are 'related parties' in terms of Section 4 (3)(b) of the Central Excise Act, 1944. Further, it is alleged that gold bars/ silver bar manufactured by the Appellant is sold to M/s Dhruv Jewellers which are further sold by M/s Dhruv Jewellers to customers with a small margin. Therefore, in terms of Rule 10 when excisable goods are sold through a related person, then value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal. Accordingly, the show cause notice proposed to adopt the average purchase an....
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....e pertains to interpretation of the Not No 5/2006 and other similar exemption notifications and the activities of the Appellants have remained the same since inception; there was no deliberate act with any intention to evade payment of duty and therefore the imposition of penalty is not warranted in the present case. The impugned OIO has imposed a penalty under Rule 26 of the Central Excise Rules, 2002 on the following personnel of the Appellant-Company on the ground that they were concerned in the removals and sale of excisable goods without payment of duty which they knew or had reason to believe were liable to confiscation under the Central Excise Act and Rules made there under. The requirement of Rule 26 is very specific and it shows that it refers to removal of excisable goods or concerning oneself with such excisable goods physically and the same should have been done with the knowledge or reason to believe that the goods are liable to confiscation. No evidence has been led by the department as to how the Appellant has involved in clearance of goods without payment of duty. For establishing knowledge there must be some positive evidence which is missing in the present proceed....
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.... the adjudicating authority and found to be unsubstantiated. Particularly, for the period from January, 2013 to May 2013 no credit reversals were found. Accordingly, it has been held in the OIO that BRPL is not entitled to claim the benefit of full exemption under aforesaid Notification. In the result, gold/silver coins cleared by BRPL were not eligible to claim duty exemption either under Sl. No. 200(I) or 200(II) of Notification No.12 /2012. Thus, the subject coins attracted duty at tariff rate. BRPL have not referred to the aforesaid Chapter note 14 but merely stated that the coins come into being as a result of a continuous process. From the process indicated by BRPL it is seen that gold in powder or strip form does come into being and is excisable goods in terms of the aforesaid Chapter Note. 21.1. Appeals No E/22502 to 22507 /2014 pertain to duty demand on gold bars made from dore bars, branded gold /silver coins cleared by them during 17/3/2012 to 16/7/2012 and other issues. The amount of duty involved in these 6 appeals is Rs. 163.34 crores. BRPL's contention is that primary gold bars manufactured by them from 'dore bars' procured by them were eligible for fu....
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.... bar'. This amendment merely made explicit what was implicit in the expression "from any form of gold". The said amendment is therefore clarificatory in nature, and has retrospective effect. The Apex court's decision in the case of WPIL vs CCE, Meerut (2005 (181) ELT 359(SC)) squarely applies to this case. Without prejudice to the above argument, in any case, effective from 24/3/2011, duty exemption was undoubtedly not available to primary gold manufactured from Dore bar. The amount involved is around Rs. 46.56 Crores. 21.3. BRPL has contended that as per HSN Explanatory notes, 'dore bars' are to be classified under the description of gold in unwrought or semi-finished form covering dore bars (viz. Heading 7108 ICT). This is only an inclusive clause. The above explanation emphasizes the fact that a Dore bar is an alloy of gold, silver etc. and it is not gold bars. It only states that the subject alloys are also covered under the heading 7108. Thus, this Note is no authority for taking a view that a Dore bar is a gold bar. 21.4. Relying on the Explanation against Sl. No.21A inserted vide amending notification 5/2011 dated 1/3/2011, it is contended that Dore bar....
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.... on input services has been taken under CCR, 2004. BRPL have not fulfilled the aforesaid condition and hence, the benefit of Notification no.1/2011 dated 1/3/2011 is not available to them. The availment of CENVAT credit is not irregular but availment of concessional duty under 1/2011 is not proper and correct. There is no question of recovery of only the credit availed of in this case. Denial of exemption is the only just course. The contention that BRPL had maintained separate accounts is contrary to the statement of Shri Khetan Dhruv dated 2/5/2012. It is clearly an afterthought. 21.7 On this issue of demand on articles of gold jewellery cleared during 17/3/2012 to 7/5/2012, he submitted that BRPL had availed of and utilized CENVAT credit of duty paid on Dore bars used in the manufacture of articles of gold jewellery, which were fully exempted from duty. As per Rule 6(3) of CCR, 2004 they were required to pay an amount equivalent to 6% of the value of exempted clearances. Hence, recovery of the amount involved is justified. BRPL had not maintained separate accounts and had failed to prove that said gold jewellery has been manufactured from inputs in respect of which CENVAT has....
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....nt only when there is ambiguity or doubt in the statute. Hon'ble Tribunal's Misc. Order in relation to the same Notification no. 5/2006 w.r.t appeals filed by Hutti Gold Mines Co. Ltd may be seen in this context. [2014(304) ELT 105 (Tri.-Bang)] 24.1. Two issues arise in the interpretation of the entry in Sl.No. 21 of the Table annexed to Notification No.5/2006. One is whether the processes undertaken amount to conversion and two, whether such convers is from a form of gold. Revenue is of the view that 'Dore bars' are semi-refined alloys produced at the mine site from ore/ concentrate. They are generally not usable/ not used without further refining. These refining processes are different from the processes of conversion of gold from one form to another. Accordingly, in BRPL's case itself, while production of coins from strips is conversion resulting in primary gold, obtaining gold powder/ bars by refining dore bars does not amount to conversion as generally understood. 24.2. Heavy reliance was placed on the decision of the Hon'ble Tribunal and the Hon'ble Supreme Court in the case Hindalco i.e. Birla Copper Ltd vs. CCE, Vadodara. The fundamental is....
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....xpansive description i.e. "glass" and "glass wares" in all forms'. There is no dispute that the articles manufactured by the assessee are articles made of glass. The word 'form' connotes a visible aspect such as shape or mode in which a thing exists or manifests itself, species, kind or variety. The use of the word 'in all forms' is different from the expression 'all kinds'. The conceptual difference between the words "all kinds' and 'in all forms', is that the former multiplies items of the same kind while the latter multiplies the same commodity in different forms. The use of the word 'in all forms' widens the scope of the Entry." 24.4. Reference is invited to the appeals filed by Hutti Gold Mines Co. Ltd. [HGML] [2014(304) ELT 105 (Tri.-Bang)], which are pending before this Hon'ble Bench. This case has considerable relevance to the present Appeals. Revenue would like to submit that the same relate to Dore bars supplied by them to refineries including BRPL. The issue raised therein is availability of duty exemption under Notification no.5/2006 for Dore bars produced by them from gold ore/concentrate. The duty demand is Rs. 141.37....
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....ble in as much as Sl. No.21 of the Notification provides for exemption to primary gold converted with the aid of power from any form of gold and the process undertaken by the appellants does not amount to conversion to primary gold; dore bar being semi-pure alloy of gold, silver cannot be construed to be includable in "any form of gold" as the term can only refer to jewelry, coins, bars or other articles of gold; the amendment to Notification No.5/2006 - CE dated 1.3.2006 vide No.5/2011 dated 1.3.2011 whereby Sl. No.21A was inserted, granting exemption at a reduced rate of duty in respect of gold bars manufactured in a factory starting from the stage of gold dore bars, clearly emphasizes that gold bars manufactured out of dore bars attract Central Excise duty; Notification No.25/2011-CE dated 24.3.2011 which substituted the words "from any form of gold" with the words "from any form of gold other than gold ore, concentrate or dore bar" is retrospective in nature and the benefit of Sl. No.21A is not applicable to the appellant as gold dore bar has been defined as dore bar having gold content and not exceeding 80%; that since dore bars procured by the applicant are having gold conten....
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....ry clearly describes that when the said "primary gold" is converted from any form of gold with the aid of power into bars as well, the same would be treated as "primary gold". This is explained by the third Member while concurring with the opinion of the Technical Member in the following manner: "10. Since dore anode is an alloy of gold and therefore a form of gold, I hold that duty be determined on the value of land at the stage of emergence of "dore anode" as held by learned Member (Technical), and hence concur with his view." 9. We agree with the aforesaid view and as a result thereof the appeal is liable to be dismissed. The appeal is, accordingly, dismissed. From the above, it is clear that the Hon'ble Supreme Court has laid down two conditions for the availability of the exemption Notification. Number (1) is to see whether the end product manufactured is primary gold and Number (2) is to see whether it is converted into any form of gold. When the Supreme Court has held "gold mud" having very low percentage of gold "as any form of gold" and the manufacture of the gold bars from the same to be conversion, there is no scope of any doubt to consider the dore bar, h....
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....n Dore bar having gold content not exceeding 80% accompanying by assay certificate issued by the mining company, giving details of the composition. From this, it is very clear that the "dore bars" referred in Explanation containing Sl. No.21A is specifically applicable to the exemption provided under Sl. No.21A only. This cannot be made applicable to goods specified in Sl. No.21 of the Notification No.5/2006. Going by the wordings of the notification, the appellant's contention appears to be correct in so far as the insertion of Sl. No. 21 A in Notification No. 5/2006 is concerned. It has to be read that the definition of Dore bar given under Sl. No. 21A is applicable to the exemption under that particular Sl. No. and will not be applicable to Sl. No. 21. 27.5. We find that the amendment brought by Notification No.25/2011 dated 24.3.2011 substitutes the words "from any form of gold" with the words "from any form of gold other than gold ore, concentrate or dore bar". From this, it is clear that "dore bar" has been specifically excluded from the category of "any form of gold" with effect from 24.3.2011. The department sought to read this amendment to be retrospective. However, in ....
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.... valorem in nature the theory of revenue neutrality is also not going to help. Therefore, we find that the appellants are liable to pay Central Excise duty on the gold bars manufactured and cleared by them during the period 24.3.2011 to 16.1.2012.In view of the discussion above, the objection raised by the Revenue on the submission of additional ground on manufacture by the appellants become infructuous and hence, are not being considered. 27.7. The Ld. Commissioner has found that there has been willful default on the part of the appellants inasmuch as they have not reflected the details of manufacture and clearances of gold bars in their monthly statutory returns filed with the Department; no declaration was filed by them disclosing the facts; they voluntarily started paying duty on gold bars (made out of Dore bars w.e.f 17/1/2012; this act itself demonstrates that they were fully aware of the duty liability on the gold bars manufactured by them; even after accepting the duty liability from 17/1/2012, they did not come forward to disclose the fact of manufacture of the said gold bars prior to 17/1/2012; in case, their intentions were clean and bona fide they ought to have volun....
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....mitted that only from the month of January 2012 HGML started charging excise duty on the sale of dore bar to the Appellant. The invoices of HGML showing payment of duty post January 2012 enclosed as Annexure (Refer - Pg. No. 480-483). However, the other suppliers continued to sell gold in various forms to the Appellant without charging Excise duty as the sale was under a trading invoice. The invoice copies of trading invoices from M/s Suresh Jewellery showing this position as Annexure. In this regard, the Appellant started claiming CENVAT credit on the Excise Duty paid on purchase of Dore Bar from HGML with effect from January 2012 only. The only source of duty paid Dore bars were from HGML and HGML started paying duty only from January 2012. The Ld. Commissioner has held that the Appellants have not produced any evidence of not availing credit prior to January 2012. The Appellants submit that it is an impossible condition to be fulfilled when the Appellants are stating that they have not purchased any dore bars which are duty paid from HGML. It is for the Commissioner to prove the positive evidence if any that the Appellants have procured duty paid goods and taken credit. The ques....
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.... credit; the separate registers maintained for recording the inventory like duty paid gold, non-duty paid gold, Cenvat register etc evidences that the Appellant has not claimed CENVAT credit during the disputed period on any other input purchased during the month. As a result, it is abundantly clear that gold/ silver coins which were manufactured and cleared during the period 01.01.2012 to 31.04.2013 were made out of gold procured from other suppliers who had not charged excise duty. Therefore, the allegation of the ld. Commissioner and contention of the department that the Appellant had contravened the condition of Notification No. 1/2011-CE dated 01.03.2011 is liable to be set aside. It is further submitted that the department cannot just brush aside the evidences produced by the Appellants without any proper reasoning and without any contra evidences. 29.3. It appears from the above that for a certain period, there was no scope for the appellants to procure duty paid bars. In view of the difference of opinion on the basis of records maintained, we find that the issue needs to go back to the original authority to verify the records of the appellants vis a vis their claims for ....
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....ch branded coins emerge, that during this continuous process, gold/ silver bars do not come into existence and therefore, the question of excisability of intermediate product does not arise. They submitted that in the present case, gold coins are ultimately manufactured from dore bars and the fact that during the intermediate stage thick strips (alleged to be gold bar by the Department) come into existence, does not take away the exemption granted to gold coins if manufactured out of duty paid gold and silver; Without prejudice to the contention that gold bar does not come into existence during the intermediate stage of manufacturing process for gold coins, it is submitted that any goods which emerge during the intermediate stage of manufacture and which are captively consumed for the manufacture of final product are not marketable and do not attract levy of Excise duty. It is undisputed that gold dore bars are duty paid. The dore bars which get rolled into gold sheets are further punched into gold coins directly. As long as the dore bars are duty paid, the question of denying the benefit of exemption to gold coins is not legally sustainable and the same is liable to be set aside. ....
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....uous process. From the process indicated by BRPL it is seen that gold in powder or strip form does come into being and is excisable goods in terms of the aforesaid Chapter Note. Department's further contention is that BRPL are also not eligible to the concessional duty applicable to S. No. 200 (I) of Notification no.12 /2012 as they had availed of CENVAT credit on the duty paid on dore bars used as inputs. BRPL have not denied their availment of CENVAT credit but have claimed that the credit so taken was reversed. This claim was examined by the adjudicating authority and found to be unsubstantiated. Particularly, for the period from January, 2013 to May 2013 no credit reversals were found. Accordingly, it has been held in the OIO that BRPL is not entitled to claim the benefit of full exemption under aforesaid S.no. 200(II). In the result, gold/silver coins cleared by BRPL were not eligible to claim duty exemption either under Sl. No. 200(I) or 200(II) of Notification No.12 /2012. Thus, the subject coins attracted duty at tariff rate. 29.7. We find that revenue has a point in this case. We find that the majority view in the case of Hindalco Industries (Supra) was that duty ca....
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.... with interest. However, we set aside the penalty under Section 11 AC for the reason that the SCN is issued on 29-7-2013 alleging suppression etc, where as another SCN covering the same issue has already been issued on 3-5-2013. We hold that suppression etc cannot be invoked after the department was well aware of the activities of the appellants. 29.8 Coming to the duty demand of Rs. 23,24,097/- on the gold jewelry cleared by the appellants, we find that the show-cause notice seeks to deny the exemption claimed by the appellants under Notification No.12/2012 for the reason that the appellants have availed CENVAT credit on the principle input i.e., dore bars for payment of Central Excise duty. Though the learned Commissioner has accepted that the demand is covered by retrospective amendment given vide Section 138 of Finance Act, 2012 has proceeded to set up a new case by demanding 6% value of exempted goods on the ground that the appellants have not maintained separate accounts in terms of Rule 6 of CENVAT Credit Rules, 2004. The appellants contended that the Commissioner has traversed beyond the show-cause notice by setting up a new case at the time of adjudication and they have....
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....0.5.2012 to 25.06.2012 and not prior to 10.5.2012. There was no evidence to prove that the inputs used for manufacture of impugned unbranded gold coins and gold jewelry was sourced from non-cenvtable invoices or on which no CENVAT credit was taken. He further found that though the appellants have claimed that they have submitted Annexure - 23 to their reply dated 20.12.2013, the said Annexure was not produced and it was not explained as to how the entries were relevant. The Commissioner has also found that as per the ledger account and ER-1 returns the entire quantity of dore bars procured from M/s. HGML were used for manufacture of gold bars cleared by them. However, it does not give the entire quantity of dore bars purchased by them and that the argument of the appellants that they have used gold bullion purchased by them under trading invoices in the manufacture of impugned goods is not acceptable. Commissioner also found that there were working shown as to how the amount of Rs. 21,32,773/- was arrived as the credit attributable to the inputs used in the manufacture of exempted goods and such payment too was after being pointed out by DGCEI. The appellants contended that part of....
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....ividual roles of the partners in the alleged lapses or evasion of duty have not been brought forth except alleging that they are involved in the removal and sale of excisable goods without payment of appropriate duty. We find that this in itself will not suffice for penalty across the board on each of the Directors albeit of different sums. Moreover, as per the discussion above, some of the issues were related to interpretation of the Notifications and appreciation of the documents and evidence thereof. Therefore, we find that sufficient cause has not been shown to levy penalty on each of the Directors, more so, when the individual role and liability has not been shown. We find that wherever the demands are sustained, penalty on the firm would suffice. There is no need to levy penalties additionally. Therefore, the penalties imposed on the Directors are set aside. 33. In view of the discussion above, the appeals are disposed of as below: (i). We confirm the demand of duty on gold bars manufactured and cleared by them during the period 24.3.2011 to 16.1.2012 and hold that extended period is squarely applicable. Penalty imposed under Section 11AC will be restricted to the duty ....