TaxTMI 
TaxTMI 
2023 (1) TMI 389
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....ctions 2(f) and 3 of the Central Excise Act, 1944 (the Act) read with Rules 4, 6, 8, 10 and 12 of the Central Excise Rules, 2002 (the Rules) inasmuch as they have clandestinely manufactured and cleared "Special Boiling Point Spirit" classifiable under Central Excise Tariff Sub-heading 2710.1213 commercially known as 'EPC solvent' during the period from 2011-12 to 2015-16 (up to October, 2015) without payment of Central Excise Duty as leviable thereon amounting to Rs. 24,87,18,605.00/- including cess. Further, it was stated that the aforementioned goods have been cleared without payment of Central Excise Duty hence liable for confiscation under the provisions of Rule 25 of the Rules. It was further stated that the appellants have suppressed the fact of clandestine manufacture and clearance by way of suppression and willful mis-statement in their ER Returns submitted by them to the Central Excise Department every month and by way of manipulation in the sale invoices, the amount of Central Excise Duty so evaded is recoverable in terms of Section 11A(4) of the Act by invoking the extended period of 5 years. Therefore, the appellants are liable to pay interest in terms of Section 11AA r....
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....ated 12.06.2015 should not be confiscated under Rule 25, (c) why Central Excise Duty along with cess should not be demanded and recovered under Section 11A (4) of the Act; (d) why applicable rate of interest should not be charged and recovered as per Section 11AA of the Act; (e) why penalty under Rule 25 of the Rules read with Section AC of the Act should not be imposed; (f) why extended period of 5 years as per provisions of Section 11A(4) should not be applicable in respect of the instant case as duty has been evaded by way of suppression and willful mis-statement in the returns and manipulation in the sale invoices; (g) why penalty should not be imposed on the Director, who was the second notice, as per provisions of Rule 26 of the Rules. 3. The appellants submitted their reply dated 8th July, 2016 to the show cause notice stating that they had purchased the goods namely, "condensate" from M/s. Oil India Limited, Assam under proper Central Excise invoices without payment of duty by virtue of the classification of products under Tariff Sub-heading 2709 0000 at Nil rate. The said product was subjected to distillation process in their factory for refining the condensates by removi....
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.... treated as "manufacture". Hence, the refined condensates or condensates (distilled) were/are cleared by us under Tariff sub-heading no. 27090000 @ NIL duty, as that of condensates. 4. It was submitted that the present management of the company took over in the year 2012 and they have been submitting Nil monthly returns regularly and the officers of the department have inspected the factory on several occasions, scrutinized the returns but have not raised any question about the dutiability of the product. It was further stated that the officers of the Anti-Evasion Unit visited the factory premises on 12th June, 2015 and examined various records and have taken samples of the condensates and the samples were received by the chemical examiner's office on 19th June, 2015 and after a period of 7 months, the chemical examiner submitted a report on 13th January, 2016. The appellants further stated that the charge against them for demanding duty, interest and imposing penalty are wholly unjustified and improper as it lacks any proper evidence and the show-cause notice has been issued without proper appreciation of the legal position. At the first instance, the appellant contended that the....
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....ertificate obtained by the appellants under the provisions of the Act with respect of Value Added Tax Act and also referred to the returned filed under the provisions of the Central Sales Tax Act. With regard to this allegation, it was submitted that none of the authorities who had granted those certificates have certified that the process of distillation amounts to manufacture. With regard to the veracity of the chemical test report, it was submitted that the department wanted the chemical examiner to certify the chemical constituents of the sample and classification under the Central Excise Tariff Act, 1985. However, the chemical examiner has not certified the chemical constituent of the sample nor its classification under the Tariff Act but has certified only the density of the samples' flash point, evaporation etc. Furthermore, there was an inordinate delay of more than 6 months for the chemical examiner to submit his report and the product being a petro-product, it will not retain its original properties for such a long period of time. Therefore, it was requested that the report of the chemical examiner can have any impact on classifying the product under Tariff sub-heading 27....
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....duct had undergone a change so as to come within a different classification cannot be examined in the writ petition as the Writ Court cannot act as an appellate authority and substitute its findings upon the reappraisal of the facts and evidence unless a finding is demonstrated to be perverse. Challenging the correctness of the order passed in the writ petition, the appellants have filed the present appeal. 7. We have elaborately heard Mr. N.K. Chowdhury assisted by Mr. Nilotpal Chowdhury, Mr. Prabir Bera and Mr. Deepak Sharma, advocates for the appellants and Mr. Bhaskar Prosad Banerjee assisted by Mr. Abhradip Maity, advocates for the respondents. 8. The Hon'ble Supreme Court in Whirlpool Corporation Versus Registrar of Trade Marks, Mumbai AIR 1999 SC 22 held that the alternate remedy is not to operate as a bar in atleast three contingencies namely where the writ petition has been filed for the enforcement of any fundamental right or where there has been violation of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or vires of an act is challenged. Thus, when an appealable order is put to challenge in a writ petition under Article....
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....f demand for normal period. The said decision was affirmed by the Hon'ble Supreme Court upon the dismissal of the Civil Appeal No. 5461 of 2015 by judgment dated 11.07.2016. In Prabhu Steel Industries Limited Versus Collector of Central Excise, Nagpur 1997 (95) ELT 164 (SC) the Hon'ble Supreme Court held that when the goods are cleared in accordance with the approved classification list and all materials facts were known to the revenue authority mere change of opinion as to the correct classification/description of the product is not sufficient to invoke the extended period of limitation particularly when there was no concealment of true facts and for such reasons the demand was set aside as time barred. Rainbow Industries Private Limited Versus Collector of Central Excise, Vadodara 1994 (74) ELT 3 (SC) was a case relating to manufacture of dye stuff, manufacturer filed a price list as required under Rule 173C of the Central Excise Rules which was approved by the Excise authority with effect from 01.04.1975. About a year thereafter, the Assistant Collector issued a notice requiring the appellant therein to show cause as to why the net assessable value should not be revised and diff....
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.... arrived at is to hold that invoking the extended period of limitation is bad in law. The second issue is with regard to the classification of products which undoubtedly is a disputed question and cannot be appropriately adjudicated in a writ petition. However the endeavor of the appellant before us is not to convert this court into a chemical laboratory but the endeavor is to show that the material based on which the Commissioner came to the conclusion that the process adopted by the appellants amounted to manufacture is without any basis. On a reading of the show cause notice as well as the Order-in-Original it is clear that the adjudicating authority was largely guided by the chemical examiners report. In the preceding paragraph we have set out as to what was the observation made by the chemical examiner in his report. Firstly the report need to be discarded as there was a delay of more than seven months to submit the report from the date of drawl of samples. The product is a petro product and has got certain natural properties and it is not clear as to whether there was any certification as to any change in the characteristics of the product after a long period of time. Secondl....
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....fication regarding re-refining of waste oil and by circular dated 11.04.2016, it was stated that whether the process undertaken by the assessee amounts to manufacture or not is an interpretational issue and therefore when a demand is raised it should be raised for the normal period of limitation only. This is also one more reasons to hold that invoking the extended period of limitation and demanding duty for the past period is not sustainable. Considering the above position, we can safely hold that the jurisdictional issue arises for consideration in the case on hand and if that be so, the writ petition was maintainable. In State of Punjab Versus Bhatinda District Cooperative Milk P. Union Limited 2007 (217) ELT 325 (SC) the Hon'ble Supreme Court held that the question of limitation is a jurisdictional question and writ petition was maintainable. 12. Upon reading of the order of adjudication, we find that the issue has been dealt with in a very cursory manner without taking note of the objection raised by the appellant in their reply to the show cause notice. The adjudicating authority has stated that no doubt has been raised by the appellant with regard to the observations of the....