TaxTMI 
TaxTMI 
2024 (8) TMI 309
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....t, 2017. 2. Briefly stated facts of the present case are that the appellant was engaged in the manufacture of Zinc Ingots and Zinc Sulphate fertilizer falling under Chapter Heading No. 7901 and 2833 of the Central Excise Tariff Act, 1985. The officials of DGGI initiated investigation and visited factory premises of the appellant. Statement of Shri Suresh Goyal, Partner was recorded, in which it was inter alia submitted that their firm manufactures Zinc Ash and Zinc Skimming fertilizers; they pulverize Zinc Skimming which results into Zinc Metal and Zinc Ash; the metal portion is melted in furnace and converted into Zinc Ingots; Sulfuric Acid is added in Zinc Ash powder which results into Zinc Sulphate; Zinc Ash powder is captively consumed as well as sold on payment of Central Excise Duty; the captively consumed Zinc Ash is cleared on payment of Central Excise Duty. Thereafter, it was observed that as per judgment of Hon'ble Supreme Court in the case of Union of India Vs. DSCL Sugar Ltd - 2015 (322) ELT 769 (SC) and subsequent Board Circular No. 1027/15/2016-CX dated 25.04.2016, it has been clarified that the products including bagasse, dross and skimming are non-excisable goo....
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....during aforesaid period charged and collected Central Excise Duty on exempted by product i.e. Zinc Ash. As per Section 11D of the Act, every person is required to deposit any amount which is collected in excess of duty assessed or determined and paid. The appellant during aforesaid period sold/consumed 3061.22 MT Zinc Ash where upon duty amounting to Rs.1,61,30,759/- was charged and paid which is liable to be appropriated under Section 11D of the Act. On these allegations, a show cause notice dated 20.05.2019 was issued to the appellant to show as to why:- (i) the amount of Rs.71,68,232/- on the clearance of Zinc Ash and its use in the manufacture of exempted Zinc Sulphate should not be recovered from them under Rule 6(3) of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 and Section 174 of the CGST Act, 2017. (ii) Interest at the appropriate rate should not be charged. (iii) Penalty should not be imposed on them under Rule 15(1) of the Cenvat Credit Rules, 2004 and Rule 25 of the Central Excise Rules, 2002/Rule 28 of Central Excise Rules, 2017 read with Section 11AC(1) of the Central Excise Act, 1944 read with Section 174 of CGST Act, 2017....
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....,37,60,000/- and paid excise duty plus education cess amounting to Rs.29,70,003/-. The duty was paid on normal rate i.e. 12% plus cess. The appellant also sold 2571.245 MTs Zinc Ash in the domestic market and assessed its value Rs.10,52,85,999/- and paid excise duty amounting to Rs.1,31,60,750/-. 4.6 He further submits that at the time of import of Zinc Ash, the appellant paid CVD and SAD. As per the impugned order Zinc Ash/Skimming/Dross is not subject to Central Excise Duty but the lower authorities have ignored the important fact that same item was subjected to CVD at the time of import, hence the appellant was bound to avail Cenvat Credit and utilize for the payment of duty on sale of Zinc Ash. 4.7 He further submits that it is surprising that the DGGI is holding that duty was not payable on Zinc Ash whereas another wing of the department i.e. Customs is charging CVD on the same product; and once CVD is charged treating Zinc Ash as manufacture, there was no illegality on the part of the appellant to pay duty on the sale of Zinc Ash. The appellant had paid duty amounting to Rs.1,61,30,759/- whereas as per the impugned order, the credit amounting to Rs.71,68,232/- was required ....
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....ellant and conducted the audit; therefore, it is not only highly arbitrary and unreasonable but also caprice & cavalier to allege that there was suppression or mis-statement on the part of the appellant. Further, the appellant had paid duty amounting to Rs.1,61,30,759/- whereas as per impugned order, the appellant was required to pay Rs.71,68,232/- which means the appellant had already paid approximately Rs.90 Lakhs in excess. 4.11 In support of his submissions, the learned Counsel relies on the following judgments: * Uniworth Textiles Ltd Vs. CCE, Raipur - 2013 (288) ELT 161 (SC) * M/s Sandeep Laminators Pvt Ltd Vs. CCE, Delhi-III - Final Order No. 60067/2024 dated 22.02.2024 in Excise Appeal No. 59092 of 2013 * Domino Printech India Pvt Ltd Vs. CCE, Delhi-III - 2020 (372) ELT 96 (Tri- Chan.) * Markwell Paper Plast Pvt Ltd Vs. CC & CE, Noida - 2012 (285) ELT 76 (Tri-Del) * CCE, Pune-III Vs. Ajinkya Enterprises - 2013 (294) ELT 203 (Bom) * CCE, Surat-III Vs. Creative Enterprises - 2009 (235) ELT 785 (Guj) * Hyderabad Industries Ltd Vs. Union of India - 1999 (108) ELT 321 (SC) * Grasim Industries Ltd Vs. Union of India - 2011 (273) ELT 10 (SC) * CCE, Patna Vs. Tat....
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....d 04.03.2022 has held that Circular dated 25.04.2016 is unsustainable in law as bagasse is non-excisable goods to which cenvat credit has no application. It is pertinent to note that subsequent to the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Indian Sucrose Limited (supra), the Board has issued fresh Circular No. 1084/05/2022-CX dated 07.07.2022 and has rescinded the Circular dated 25.04.2016 on the basis of which, the entire demand was created. Here, it is pertinent to reproduce the Circular dated 07.07.2022, which is reproduced herein below: "Circular No. 1084/05/2022-CX dated 07-07-2022 F.No. CBIC-110267/33/2022-CX-VIII SECTION-CBIC Government of India Ministry of Finance Department of Revenue Central Board of Indirect Tax & Customs, New Delhi Subject: Excisability of waste/residue arising during the process of manufacture - Withdrawal of Circular No. 1027/15/2016-CX dated 25.04.2016 - Reg. Excisability of bagasse and similar other by-products or waste arising during the course of manufacture of an excisable product has been brought to the attention of the Board. 2. It may be recalled that Rule 6 of the CENVAT Credit Rules, 2004 ....
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....on the part of the appellant to pay duty on sale of Zinc Ash. In all, the appellant admittedly has paid Rs.1,61,30,759/- whereas as per the impugned order, the Credit amounting to Rs.71,68,232/- is sought to be reversed under Rule 6(3) of the CCR, 2004. Further, the duty amounting to Rs.1,61,30,759/- paid by the appellant is sought to be appropriated under Section 11D(1A) whereas Section 11D is applicable to excisable goods which are exempt or chargeable to nil rate of duty, but in the present case, Zinc Ash as per the department is non-excisable goods; therefore, Section 11D is not applicable in this case. 9. Further, we also find that the identical issue was involved in the case of M/s Haryana Agro Chemicals, wherein vide Order dated 12.04.2021, the Additional Commissioner of Central Excise & GST, Chandigarh by relying upon the judgments in the cases of CCE, Surat-III vs. Creative Enterprises (supra) and CCE, Pune-III vs. Ajinkya Enterprises (supra) has dropped the proceedings initiated against the assessee and also dropped the penalty on the partner. Further, in the case of M/s Shri Ram Agro Chem Pvt Ltd, wherein vide Order dated 26.03.2024, the Assistant Commissioner, Central ....
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....nded period. If the Respondent had full knowledge or manufacturer had reasonable belief that he is not required to give particular information, only normal period of limitation is applicable. c) The Hon'ble Supreme Court has in the case of Gopal Zarda Udyog v/s Commissioner of Central Excise, New Delhi cited as 2005 (188) E.L.T. 251 (S.C.) held that mere failure or negligence on part of manufacturer either not to take out licensee or not to pay duty in cases where there is a scope for doubt, does not attract extended period of limitation. Failure to pay duty or to take out a license, not necessarily due to fraud, collusion etc. d) The Hon'ble Supreme Court has further in the case of Cosmic Dye Chemical v/s Collector of Central Excise, Bombay cited as 1995 (75) E.L.T. 721 (S.C.) held that for invoking extended period of limitation, there should be an intent to evade duty. The mis-statement or suppression must be wilful and it is not correct to say that there can be a suppression or mis-statement, which is not wilful and yet constitutes a permissible ground for invoking the extended period of limitation. The same view was taken by Hon'ble Tribunal in the case of Mahin....