TaxTMI 
TaxTMI 
2024 (3) TMI 490
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....yil at Coimbatore, without accounting the details of production and clearance in daily stock account, without issuing invoices and without payment of duty. Hence show cause notice dt. 28.12.2012 was issued for the period 2007-08 to 2010-11 proposing to demand Central Excise duty of Rs.4,48,070/- along with interest and for imposing penalties. After due process of law, the original authority confirmed the duty demand along with interest and imposed equal penalty under Section 11AC of the Central Excise Act, 1944. Separate penalty of Rs.1 lakh was imposed on the Executive Director of the company under Rule 26 of the Central Excise Rules, 2002. The proposal to impose penalty under Section 27 of Central Excise Rules, 2002 was dropped. Aggrieved by such order, the appellants filed appeals before the Commissioner (Appeals) who upheld the same. Hence these appeals. 2. The Learned Counsel Sri P. Satheesan appeared and argued for the appellant. It is submitted by the ld. Counsel that the duty demand has been arrived at by the department on the value assessed under Section 4A of Central Excise Act, 1944 by taking into account the M.R.P of the product and allowing abatement applicable as p....
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....eral Water and Packaged Drinking Water are two different commodities known in the market and hence grouping of both these products together is bad in law. 5. The Ld. Counsel adverted to the Tariff Heading 2201 which is as under : Tariff Item Description of Goods Unit Rate of duty (1) (2) (3) (4) 2201 WATERS, INCLUDING NATURAL OR ARTIFICIAL MINERAL WATERS AND AERATED WATERS, NOT CONTAINING ADDED SUGAR OR OTHER SWEETENING MATTER NOR FLAVOURED; ICE AND SNOW 2201 10 -Mineral waters and aerated waters: 2201 10 10 --- Mineral waters l 12.5% 2201 10 20 ---Aerated waters l 12.5% 2201 90 - Others: 2201 90 10 --- Ice and sow l Nil 2201 90 90 - Other l 12.5% 6. It is submitted that as per the Tariff Heading "Mineral Waters" fall under 22011010. The product of the appellant is 'Packaged Drinking Water'. The appellant does not add any minerals into it or demineralize the water. The classification therefore falls under 22019090 only. It is submitted that the department has not disputed the classification adopted by the appellant but have stat....
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....the department has wrongly held that the goods are assessable under Section 4A of Central Excise Act, 1944. 9. The amended Notification No.3/2015-CE (NT) dt. 01.03.2015 was adverted to by the learned counsel. At Sl.No.25A of the said notification, the tariff item shown is 2202. The description of goods given is "all goods except mineral waters and aerated waters". This would clearly show that the earlier notifications (2/2006, 14/2008 and 49/2008) covered only mineral water and aerated water falling under chapter heading 2202. The same logic would apply to the items falling under 2201 also and only mineral water and aerated water falling under 2201 are to be included in the MRP assessment in all the above notifications. 10. The Chennai unit of the appellant was issued a show cause notice dt. 8.1.2013 demanding duty of Rs.21,78,888/-. The demand in the said case was confirmed by OIO No.3/2016 dt. 29.01.2016. On appeal, the Commissioner (Appeals), Chennai set aside the demand of duty. In the said order, it was observed by the Commissioner (Appeals) that Notification No.49/2008 is applicable only to mineral waters and the water manufactured by the appellant is packaged drinking ....
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....hat the Executive Director had involved directly in the clearance of the goods. It is prayed that the appeals may be allowed. 13. Ld. A.R Shri N. Sathyanarayanan appeared and argued for the Department. It is submitted by Ld. A.R that appellant has contested the determination of value under Section 4A claiming that only Mineral Water and Aerated Water are covered under Sl.No. 24 & 25 of the notification. On examination of Notification No.49/2008-CE (NT) dt. 24.12.2008, it can be seen that the description of goods shown against Sl.No.24 & 25 are "Mineral Waters" and "Aerated Waters". It is pertinent to note that instead of giving specified sub heading of Mineral Waters which are 22011010 / 22011020, Chapter heading "2201 or 2202" is shown in Col. 2 of the notification as detailed below : Sl.No. Chapter, heading sub-heading or Tariff item Description of good Abatement as a percentage of retail sale price (1) (2) (3) (4) 24 2201 or 2202 Mineral waters 45 14. From the above, it can be seen that the description 'Mineral water' is used in the above notification in a general sense and not specifically to mean only 'mineral water specified under sub....
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....ctory by one or more manufacturers does not exceed Rs.400 lakhs in the preceding financial year. In the present case, the aggregate value of clearances from all the four units has exceeded the exemption limit of Rs.150 lakhs. When the value is assessed under Section 4A of the Act, after granting abatement (as per the above notifications 2/2006, 14/2008 & 49/2008), the appellant is liable to pay duty of Rs.4,48,070/- during the period from December 2007 to September 2010. 18. The appellant has manufactured and cleared Packaged Drinking Water with brand name "Holy Aqua" without taking Central Excise registration and even though crossed the value of Rs.150 lakhs, the appellant has not paid central excise duty. Thus, the appellant has suppressed facts of production and clearance of goods with intent to evade payment of duty. The show cause notice invoking the extended period is therefore legal and proper. Ld. A.R. prayed that the appeals ay be dismissed. 19. Heard both sides. 20. The issue to be decided is (i) whether the Packaged Drinking Water is to be assessed under Section 4A of the Central Excise Act, 1944 or under Section 4 on the basis of transaction value (ii) whether ....
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....er. The appellant has been issued BIS certification for packaged drinking water as IS 14543. The certificate is noticed as below : 24. All these would go to show that both are different products. The valuation of the product has to be based upon the classification of the product. When the classification unambiguously falls under 22019090 the valuation has to be on transaction value as per Section 4 of Central Excise Act, 1944. Merely because the abatement notification mentioned heading 22019090 in column (2) it cannot be said that the Packaged Drinking Water is included in the Mineral Waters. Interestingly, the department does not dispute the classification adopted by appellant for 'packaged drinking water'. However, department construes that packaged drinking water is mineral water as per notifications 2/2006, 14/2008 and 49/2008. These notifications are issued under subsection (1) and (2) of Section 4A. As per subsection (1) of Section 4A, the Central Government may, by notification in the official Gazette, specify any goods in relation to which SWM (P&C) Rules, 1977 apply so as to declare the RSP on such goods, to which the provisions of subsection (2) shall apply. As per sub....
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....tational in nature. Further, there were earlier notices issued to the appellant on the very similar set of facts. In other similar matters, the department has set aside demand and taken the view that Packaged Drinking Water cannot be assessed under Section 4A of the Act ibid. For these reasons, we hold that the invocation of extended period cannot sustain. For the same reasons, the penalty imposed on the Executive Director of appellant-company is not warranted and requires to be set aside, which we hereby do. 26. In the result, the impugned order is set aside. Appeals are allowed with consequential reliefs, if any. (Pronounced in court on 05.03.2024) ============= Document 1 F.No. 9/1/94-CX-1 Government of India Ministry of Finance (Department of Revenue), New Delhi Subject: Classification of Aqua Mineral Treated Water under Central Excise Tariff-Regarding Please refer to Board's circular No. 9/87-CE (F.No. 9/1/87-CX 1) dated 28.7.87 on the subject noted above clarifying that Aqua Mineral Bisleri treated water is non-excisable. The process of manufacture of the product has been explained in Para 2 of this circular and is reproduced below". "Wat....