TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 1252
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....fit of concessional rate of duty in terms of exemption notification No. 5/99 CE dt. 28.02.99, 6/2000 - CE dt. 01.03.2000 under which they were paying concessional duty on clearances of sheets and pipes subject to the condition that the products should have contained not less than 25% by weight of fly ash or phosphorous Gypsum or both by usage. 2. On the basis of investigation and search, they were issued show cause notice alleging that on the basis of actual weight mixtures report seized from the factory and production shown in the actual wet mixture, the goods contain fly ash less than 25%. The office premise of M/s Vikram foundation and Shree Hanuman Trading company the fly ash suppliers were searched on 17.08.2004 in presence of Shri Basantkumar Raghunathdas Bangur, authorised signatory of said firms and he accepted that many times M/s Hanuman Trading only issued bills of Fly ash to M/s GCL without actual supply and such amount was returned in cash. The show cause notice relied upon the Wet Mixture report alleged to be actual and also adjusted. Based upon statements of quality assurance, production, maintenance and finance employees and seized records in the show cause notice i....
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....25% fly ash. The allegation is based upon the consumption of fly ash shown in Wet Mixture report. The actual report as per show cause notice is in register A1, A/4,A5 to A/10 and the Adjusted Wet Mixture report is in document A/2,A/3,A/11 to A/15. The demand in case of Pipes has been confirmed on the ground that the duty liability stands admitted before Settlement Commission. The demand in case of sheets was confirmed on ground that the weight of sheet in dry condition alone is relevant and that the quantity of fly ash used has to be seen vis a vis the total weight of sheet in dry condition. The goods were also ordered to be confiscated on the ground that the goods were in ready to dispatch condition. He takes us through the relevant Exemption Notifications for impugned product issued from time to time. In Notification No. 60/91- CE dt. 25.07.91 the exemption was to goods "containing more than 25% more by weight of fly ash or phosphor-gypsum". In Notification No. 38/93 - CE dt. 28.02.93 the exemption was given to goods "in which more than 30% by weight (minus the water content) of fly ash of phosphor-gypsum or both has been used". In Notification No. 38/93 - CE dt. 28.2.93 as amend....
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....Thus even if percentage of fly ash has to be determined with respect to finished goods, the weight of finished goods has to be considered without any moisture content. He relies upon decision in case of Sikka Paper Mills Ltd. 1999 (111) ELT 432. He submits that even in the decision of Eternit Everest Ltd. 2002 (150) ELT 1151 (TRI) relied upon by the revenue, the decision supports their contention that weight of goods with respect to which the percentage has to be arrived at should be determined as if no water is contained in those goods. He submits that M/s GCL are engaged in manufacture of Asbestos articles falling under chapter 68. The composition of raw material used by Appellant is Asbestos fibre 5% to 9%, Pulp 1.5% to 2%, Cement 50% to 55%, Fly ash 30% to 36%, H.G Waste 1.5% to 2%. The exemption was denied by lower authority on ground that if quantity of water used is taken into account then the percentage of fly ash will go down below 25%. The tribunal held that weight of the finished goods is to be considered for arriving at percentage should be in dry condition. Each of the raw material used by them viz. Fly ash, cement, pulp and asbestos fibre are bone dry material and wat....
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....n experiment conducted in December 1992 that even in normal condition the moisture is 19 to 20% in standard weight. Therefore when the moisture is removed to adjust the weight of sheet, the weight of fly ash would be more than of the weight of sheets. The actual wet mixture report shows that the fly ash mixed is always more than 30% for each shift for each day except some days for a very small quantity as shown by them in their appeal. He takes us through the chart and calculations annexed to the appeal based upon reports in support of his submission. He thus submits that the conditions of the exemption notification were followed and no demand can be made against them. 4. As regard demand on pipes without admitting the demand he submits that the appellants are entitle for adjustment on account of cum duty price and Modvat Credit admissible on Cement Pipes. 4.1 He further submits that the adjudicating authority has confiscated 3270 MT of Asbestos Cement sheets and 4589 MT of Asbestos Cement pipe on the ground that they were fully finished and their curing period was also over however they were not recorded in RG-1 register and were thus intended to be cleared without payment of ex....
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.... 25% by weight of fly-ash or phosphor-gypsum or both have been used" subject to condition of maintenance of proper accounts. The show cause notice on the basis of actual wet mixture reports has alleged that the content of fly ash in Asbestos Sheet was found to be 24.03% and in pipes 14.87%. The adjudicating authority has confirmed demand in case of sheets that the weight of finished goods has to be taken in dry condition; actual weight mixture report gives production details based on standard weight i.e Number of Sheets x standard weight of sheet; standard weight of sheet is 38.4 Kgs in dry condition as stated by the officers of the Appellant Company and as per actual wet mixture report consumption of fly ash has been less than 25%. 7. The Appellant in their reply to show cause notice as well as appeal has submitted chart based upon actual Wet Mixture report, gives details of percentage of quantity of Fly ash used vis-a-vis total raw materials consumed in the manufacture of sheet as per wet mixture report which is almost 31.5% on average basis. Taking date of production of 30.12.2001, the chart takes into account, the date of production/ consumption, Total production as per produc....
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....sh. Some Commissionerates are calculating the percentage with reference to the weight at the wet stage and others at the dry stage of asbestos cement products. 2. The matter has been re-examined by the Board and it is clarified that the percentage by weight of fly ash has to be calculated taking into account the weight of fly ash used with reference to the weight of the finished product in dry condition i.e. weight of fly ash x 1000/weight of asbestos cement products. The Commissioner may keep the proforma as prescribed under Board's Circular No. 6/92, dated 21-10-1992 issued from F. No. 134/7/92-CX.4 in mind while specifying the accounts to be maintained by the manufacturers." 8. From the above, it is an accepted position of revenue that weight of fly ash used should be with reference to the weight of the finished product in dry condition and thus the percentage of fly ash has to be determined with respect to weight of finished goods without moisture content. In case of Eternit Everest Ltd 2002 (150) ELT 1151 (TRI), the percentage use of raw material was Asbestos fibre 5% to 9%; Pulp 1.5% to 2%, Cement 50% to 55%, Fly ash 35 to 36%; H.G. waste 1.5% to 2%. The tribunal held that....
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....pellant is legally entitle for the benefit of cum duty price and modvat credit as settled in catena of judgments. Accordingly the duty demand on the Asbestos Pipe shall be re-quantified after allowing the benefit of cum duty price and modvat credit. As per re-quantification submitted by the appellant, the duty on Asbestos Pipe comes to Rs. 2,32,20,340/- and on asbestos sheet Rs. 2,80,000/- which is subject matter of verification by the adjudicating authority. Since the duty on pipe/sheet shall be re-quantified, the option of 25% penalty under section corresponding to such re-quantified duty on pipe and sheet is also extended to the appellant in terms of proviso to section 11AC of Central Excise Act, 1944. 10. The adjudicating authority in the impugned order confiscated Asbestos Cement pipe and sheets. Considering the submission made in this regard by the Learned Counsel, we find that the appellant in the various correspondences informed the department regarding the stage of making entries in RG-1. It is also observed that the appellant, apart from RG-1 register have been maintaining various other records such as Wet Mixture Reports, Daily Production Reports/Register, Physical Lab ....