2019 (2) TMI 438

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....ch, 2008. 3. Learned Counsel for the appellant explains the manufacturing process of the impugned goods as follows: a) Flex-O-Board Sheets (FOB sheets) are procured from the parent company b) A Slurry is prepared using raw materials such as fly ash, cement, gypsum, burnt lime, recron fibre etc., c) The slurry is poured between two FOB sheets d) The slurry will rise to the surface due to chemical reaction e) The panels are kept in moulds for initial setting then removed from the moulds and stacked for 10 to 12days f) The panels are then shifted to curing chambers and after a period of 28 days the panels are ready. 4. The appellant procures the Flex-O-Board sheets (FOB sheets) from the parent unit in Sanathnagar. It is not in dispute that the goods manufactured by the appellant fall under chapter 68 and that they are claiming the benefit of exemptions indicated above. Notification No. 06/2002- CE dated 01.03.2002 exempted goods in which not less than 25% by weight of fly ash or phospho-gypsum or both have been used subject to the following condition.  "If the manufacturer maintains proper account in such form a....

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....cture of Aerocon panels. During audit, it was observed that the appellants were not maintaining any batch-wise consumption particulars of the fly ash used in manufacture of slurry and are only maintaining day-wise production sheets and were also not maintaining any record for actual usage of fly ash at the time of mixing of each batch. Therefore, they were asked to submit a statement of showing quantities of various raw materials used in the manufacture of Aerocon panels. After examining the information, the appellants were issued a show cause notice on 07.05.2009 proposing to deny the benefit of aforesaid two notifications and demanding differential duty invoking extended period of time along with interest. It was also proposed to impose penalty under Section 11AC read with Rule 25 of Central Excise Rules, 2002. The appellant contested the show cause notice on merits as well as on limitation. After following due process, the Learned Commissioner confirmed the demand along with interest and imposed penalty under Section 11AC. Hence this appeal. 7. Learned Counsel submits that the only point of contention is that the Aerocon panels which they cleared were not made using 25 % by w....

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....exemption notification. 8. Notwithstanding the contention on the merits of the case, Learned Counsel argued that the extended period of limitation is not applicable as they have not suppressed any facts or manipulated the quantity of fly ash used with an intent to evade payment of duty. They had filed periodical returns, maintained records and declared that there were availing the benefit of exemption. All facts were in the knowledge of Department which sought more information at the time of audit which they provided. When all the facts are within the knowledge of department the extended period of limitation cannot be invoked and they have not suppressed any facts in the matter. 9. Learned Departmental Representative, on the other hand submits that the goods in question need to be assessed as they are manufactured. The goods in question in this case are the Aerocon panels. These panels are made up of FOB sheets and slurry made from a number of materials including the fly ash. There is nothing in the notification to indicate that the fly ash contained in the inputs used by the appellant will entitle them to exemption notification. Both notifications are similarly worded and ex....

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.... wherein, mineral wool was manufactured in factory premises of assessee was exempted if it had more than 25% by weight of press mud, red mud and blast furnace slag or one or more than of these materials have been used. Relying on the judgment of the Hon'ble Apex Court in the case of Tata Oil Mills Co. Ltd., (supra), it was held by the Tribunal that the assessee is entitled to the benefit of the exemption notification. An appeal filed by the Revenue against this order was dismissed by the Supreme Court as reported in [2013 (288) ELT A80 (S.C)]. Therefore, the issue has reached finality in this case as well. As may be seen in both cases the intention of the exemption notification was considered while interpreting it in favour of the assessee. There were a number of judgments at various levels including by the Hon'ble Supreme Court on how to interpret exemption notifications. The general view has been that an exemption notification must be strictly interpreted. Wherever it is a beneficial notification, the object of such notification was to be considered to interpret it. This is also evident by the judgement of the Hon'ble Apex Court in the case of Tata Oil Mills Co. Ltd., (supra). In....