TaxTMI 
TaxTMI 
2024 (7) TMI 103
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....Rs.1,90,29,215/ on the Noticee under Section 11 AC of the Act. ii. I confirm the demand of Rs. 42,65,905/- against the Noticee under Section 11A of the Act in respect of Show Cause Notice C.No. V(48)15/CE/Adj/34/2012/2216-18 dated 27.03.2012 after allowing the benefit of Cenvat credit of Rs. 34,80,138/-. The amount confirmed is recoverable along with interest under Section 11AB/11AA of the Act. I also impose penalty of Rs. 42,65,905/- on the Noticee under Section 11 AC of the Act. iii. I confirm the demand of Rs.4,43,253/- against the Noticee under Section 11A of the Act in respect of Show Cause Notice C.No. V(48)15/CE/Ad)/116/2012/6412-14 dated 22.10.2012 after allowing the benefit of Cenvat credit of Rs. 16,81,005/-. The amount confirmed is recoverable along with interest under Section 11AB/11AA of the Act. I also impose penalty of Rs. 4,43,253/- on the Noticee under Section 11 AC of the Act. iv. I confirm the demand of Rs. 25,92,067/- against the Noticee under Section 11A of the Act in respect of Show Cause Notice C.No. V(48)15/CE/Ad)/15/2013/1441-43 dated 07.03.2013 after allowing the benefit of Cenvat credit of Rs.46,89,854/-. The amount confirmed is....
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....e chemical examiner as referred in para 7.2 of the show cause notice and also requested for cross examination of the persons relied upon by the Revenue in the show cause notices. 2.2. Further, during the personal hearing on 27.11.2013, the Ld. Counsel for the appellant again prayed for cross examination of the persons whose statements were relied upon in the show cause notices and also requested to provide them the copy of the report of the chemical examiner but the same was not given and the matter was adjudicated by the Commissioner vide Order-in-Original dated 30.01.2014 of which the above mentioned four duty demands totaling Rs. 2,63,30,440/- were confirmed along with interest, and penalty of equal amount under Section 11AC was also imposed on them. Aggrieved by the said order, the appellant has filed the present appeal. 3. Heard both the parties and perused the relevant material on record. 4. Ld. Counsel appearing on behalf of the appellant submits that impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the binding judicial precedents on identical issue. He further submits that the main dispute ....
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....ed order is contrary to the law laid down by the Hon'ble Supreme Court in the case of Moti Laminates (P) Ltd V/s CCE reported as 1995(76)ELT 241 (SC). -2013(291) ELT 91 also referred. * That the adj. authority has even ignored the test and report obtained by the appellant of the same product from Indian Plywood Industries Research and Training Institute. * That otherwise also the mixture of Melamine and Formaldehyde which is in liquid form, by no stretch of imagination can be treated to be either Plastic or article of plastic‟. * That the mixture of Melamine and Formaldehyde is not complete product rather the same remains as incomplete / semi-finished product specially that the same does not contain any additives / retarder such as Hydrochloric Acid (HCL), DEG, Caprolactam, Sulphonic Acid / other hardeners, * The product attains the finality only after adding these additives. * That the mixture of Melamine & Formaldehyde is undertaken as per the requirement for use in mfre of laminates. No chemical preservatives/ retarder is added. * That the additives/ retarders are not required being the mixture is used immediately i....
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.... formaldehyde resin rather contains the items as 'Plastics and articles thereof. * That it is only the Plastic and articles thereof falling under Heading 39- 09 to 39-15 which falls under the negative list. * That mere mention of tariff Heading 39-09 to 39-15 does not mean that all goods falling under these headings are covered therein. * The objection would have been justified only if the description in the Negative list contains all goods falling under Heading 39.09 to 39.15 * That the duty of Excise is payable only on removal of goods from the factory and the same cannot be demanded at the intermediate stage. * There is no provision in CE Act/ Rules to consider the goods used in the same factory for further manufacture to be removal from the factory. * The provisions of Rule 4 of the CE Rules as well as 8 are being referred which provides that the duty of Excise is payable at the time of removal only whereas in this case there is no removal rather removal is of laminates which is duly covered under the exemption as provided under Notfn. 50/2003-CE. * That when the mixture of Melamine and Formaldehyde does not fal....
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....written submissions. Ld. DR has also place on record the report of the Chemical examiner of Evaluation of Wood Composites, Indian Plywood Industries Research And Training Institute, Bangalore and he has also referred to the statement of the Director of the appellant's company. He further submits that the mixture of Melamine Formaldehyde Resin and Cardanol Phenolic Formaldehyde Resin which has been used captively to manufacture laminates fall substantially under Chapter 3909 which is specified in the Annexure of Negative List at S.No. 20 of the Notification No. 50/2003-CE and hence the same is not entitled to the exemption and accordingly demanded the duty of the same by invoking the extended period of limitation. 6.2 He further submits that the decisions of the Tribunal relied upon by the appellant have not adequately discussed the issue of classification and has wrongly relied upon the office memorandum dated 01.06.2012 issued by the Ministry of Chemical and Fertilizers, Department of Chemical, Government of India which has wrongly described the main product to fall under ITC HS COD 3506 rather than ITC HS COD 3909. He further submits that this issue may be referred to Larger B....
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....gh scrutiny and verification of the unit as well as the declaration allowed the exemption. After the expiry of four years, the department raised the objection that the mixture of Melamine Formaldehyde Resin and Cardanol Phenolic Formaldehyde which are used captively for manufacture of laminates falls under Chapter 3909 which is specified in the Annexure of Negative List at S.No. 20 of the Notification No. 50/2003-CE and hence the appellant is not entitled for exemption and accordingly issued the show cause notice and confirmed the demand by invoking the extended period of limitation. 9. Further, we find that the only issue involved in the present case is as to whether the mixture of Melamine Formaldehyde Resin and Cardanol Phenolic Formaldehyde used as Adhesive/Glue/Resin for the manufacture of final product, namely, laminates are classifiable under Chapter 35-06 as claimed by the appellant or under Chapter 39-09 as alleged by the Department. Further, we find that this issue has been examined and considered in various decisions relied upon by the appellant cited (Supra) wherein the identical issue was involved and the Tribunal has held that the mixture of aforesaid items used....
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....rds, we find that the impugned order is vitiated on the issue of marketability. The learned Commissioner has relied on unsubstantiated Data from the website, which is also vague in its nature. There is no evidence brought on record that the products and the Companies/Manufacturers listed by the learned Commissioner for reliance in the impugned order, are same or similar to the product manufactured by the appellant in respect of quality and specifications. The learned Commissioner has erred in observing that the characteristics of the product of the appellant are same with that of the various manufacturers from the website without any evidence. Similarly, referring to the manufacturer M/s. Akolite Synthetic Resins, Mangalore, the learned Commissioner have erred in observing that in view of this li cense granted to them by BIS who are manufacturers and sellers of various resins in the market. Accordingly, the resins manufactured by the appellant are also marketable. We also find that the learned Commissioner have erred in observing that as similar goods have been advertised on the web- site by various manufacturers, then market must exist there. As the goods have been advertised then....
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....d therefore not classifiable under Heading 39.09. We further find that the assessee in Balaji Action Vilwell (supra) was also manufacturing the same final product as that of the appellant, hence the manufacturing process and the product considered in the said case is identical to that of the appellant. We also find that in the said case, Department had relied upon the information obtained from website of one Akolite Synthetic Resins, Mangalore, and some other manufacturers. This Tribunal observed that the process undertaken by such manufacturers have not been examined and therefore the correctness of comparison cannot be upheld. Accordingly, we find that the impugned or- der is bad and fit to be set aside". 5. Following the above decision of the Coordinate Bench in the appellant's own case, we set aside the impugned order and allow the appeal. The miscellaneous applications connected to this appeal are also disposed of. 11. Further, in the case of Greenlam Industries Vs. CCE & S.T. Chandigarh I in appeal No. E/52016/2014 vide Final Order No. 62026/2017 dated 24.07.2017 considered the identical issue and relied upon the ratio in the case of Shirdi Industries Ltd. Vs.....
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....icated. They have also contested the findings in the test as they were not allowed cross-examination by the Original Authority The denial was on the reason that the test report is a document and it is not required to be accepted only after cross-examination. The appellant's plea, that in such circumstances, the reliance placed on the test report is not legally tenable. merits consideration. We are in agreement on such plea on the reasons cited above. 17. Regarding purchase of resin reactor from Alex Engineering Works, it is seen that Revenue placed reliance on purchase order which mentioned the product as "MF Resin Reactor". The appellants have contended that there are various types of equipments and machineries available for use in their type of industry. The suppliers of machinery made visits and had detailed discussions. thereafter the decision was to supply equipments of description appearing in their invoices of March, April, August and September, 2009. The details of description in these invoices were also relied upon in the show cause notice and it is apparent that the description of equipments supplied by Alex Engineering Works were different in name and nomenc....
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....tant case, identical question arises for consideration as was involved in the above decisions cited (Supra). We cannot permit the Revenue to take a different stand in this case. Once, the Department has accepted the classification of the main item under Chapter 3506 and no appeal has been filed against the aforesaid judgments before any higher Court. In this regard, we may refer to the decision of the Hon'ble Apex court in the case of Birla Corporation Limitation Vs. Commissioner of Central Excise, reported in 2005 (186) E.L.T. 266 (S.C.) wherein the Hon'ble Apex Court has observed in para 5 as under : "5. In the instant case the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. (supra) cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in....
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....ry was conducted with reference to the goods in question in order to establish as to whether the mixture is capable of being bought and sold. Further, we find that Revenue has not been able to establish in the case that the appellant has been either purchasing or selling the main items in the market. The Marketability of the product is an essential ingredients and criteria to hold that a product is dutiable/excisable and thus onus is on the Revenue to prove that the product is marketable or captatively being consumed. In this regard, we may refer to the decisions of the Supreme court in the case of Moti Laminates Pvt. Ltd. Vs. Collector of Central Ex. Ahmedabad reported in 1995 (76) E.L.T. 241 (S.C.) wherein the Hon'ble Apex Court in para 7 has held as under : "7. The duty of excise being on production and manufacture which means bringing out a new commodity, it is implicit that such goods must be useable, moveable, saleable and marketable. The duty is on manufacture or production but the production or manufacture is carried on for taking such goods to the market for sale. The obvious rationale for levying excise duty linking it with production or manufacture is that the g....