TaxTMI 
TaxTMI 
2019 (6) TMI 1560
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....06.90 and demanded duty to the tune of Rs. 73,60,116/- under proviso to Section 11A of Central Excise Act, 1944 by invoking extended period of limitation and also imposed penalty of Rs. 5,00,000/- under erstwhile Rule 173Q of Central Excise Rules, 1944. 3. The petitioner preferred an appeal against the above order before the Tribunal and the Tribunal, vide its Final Order No. 1402/1996, dated 3-8-1996 dismissed the appeal and upheld the order of the Commissioner of Central Excise. Aggrieved by the said order, the petitioner Mills have gone on appeal before the Hon'ble Supreme Court of India seeking reclassification of Tarpaulin Fabric and for dropping demand of duty and penalty thereof and the Apex Court vide its order dated 5-5-2004 in C.A. Nos. 1778 & 1795-1796/07 [2004 (167) E.L.T. 491 (S.C.)] inter alia held that the application of extended period under Section 11A of the Act was not correct. Consequently, the part of the order where the Tribunal had rejected the prayer of the petitioner not to invoke Section 11A was set aside. 4. Consequent to the above order of the Hon'ble Supreme Court of India, the petitioners have discharged their duty liability of Rs. 3,05....
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....of levying duty does not arise at all and thus, the levy of duty for the period itself is unsustainable, without authority of law and in any view, when levy of duty is impermissible, levy of interest, which is consequential, cannot be sustained. 7. The Hon'ble Apex Court while answering the question whether the tarpaulin made-ups are covered under 6301.00 CETA Schedule and the said commodity in question resulted from manufacture as envisaged under Section 2(f) of the Central Excise Act, held that it is also now well settled that merely because certain article falls within the Schedule, it would not be dutiable under the Excise Law, if the said article is not "goods" known to the market. To the question "is there any manufacture when the tarpaulin sheets are stitched and eyelets are made" the Hon'ble Apex Court held that it does not change the basic character of the raw material and end products and the process does not bring into existence a new and distinct product with total transformation in the original commodity and the original material used i.e., the tarpaulin is still called tarpaulin made-ups even after undergoing the said process, hence, it cannot be said that the....
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....hapter Notes of the Central Excise Tariff Act, 1985 as amounting to manufacture". 11. The Hon'ble Apex Court further held that whenever a commodity undergoes a change, as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. However, the Hon'ble Apex Court in the case of India Cine Agencies v. Commissioner of Income Tax, Madras [2009 (233) E.L.T. 8 (S.C.)] observed, that, it is only when the change or a series of changes takes the commodity to the point where commercially it can no longer be regarded as the original commodity, but instead is recognized as a new and distinct article that a manufacture can be said to take place. The Hon'ble Apex Court in the case of Union of India v. Delhi Cloth and General Mills, [1977 (1) E.L.T. (J199)] referring to the meaning of expression manufacture explained in the case of Anheuser-Busch Brewing Association v. United States, stated : "Manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation, a new an....
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....er CSH 5906.90 and the demanding of interest under Section 11AA of the Central Excise Act by invoking extended period and the Final Order No. 593 of 2010, dated 28-5-2010 on the file of the first respondent are quashed. 17. The respondent's contention is that the petitioner is liable to pay interest as per the rates applicable from time to time with effect from 12-9-1995 on the belated payment of duty, based on the provisions of Section 11AA r/w. Explanatory Note-1, as evaluated in Annexure-A enclosed to the show cause notice. Section 11AA of the Act reads as follows :- Section 11AA. Interest on delayed payment of duty. - (1) Notwithstanding anything contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provision of this Act or the rules made thereunder, the person, who is liable to pay duty, shall, in addition to the duty, be liable to pay interest at the rate specified in sub-section (2), whether such payment is made voluntarily or after determination of the amount of duty under section 11A. (2) Interest, at such rate not below ten per cent and not exceeding thirty-six per cent per ann....