TaxTMI 
TaxTMI 
2024 (11) TMI 789
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.... One Crore Twelve Lakh Fourteen Thousand Five Hundred and Four Only) and differential secondary and higher education cess amounting to Rs.56,07,249/- (Rupees Fifty Six Lakh Seven Thousand Two Hundred and Forty Nine only), totally amounting to Rs.83,63,98,488/-, being the duty short paid on clearance of Gold Dore Bars during the period 01.07.2012 to 30.06.2017 under Section 11A(4) of the Central Excise Act, 1944. (c) I, hereby, demand and order for recovery of interest from them on the duty demanded and confirmed amounting to Rs.83,63,98,488/- as at (b) above, under Section 11AA of Central Excise Act, 1944, (d) I, hereby, impose a penalty of Rs.83,63,98,488/- on the assessee under Section 11AC(1)(c) of the Central Excise Act, 1944, for contravention of provisions of Central Excise Act, 1944 and Rules made thereunder with clear intent to evade payment of Central Excise duty. However, the penalty can be reduced to 25% of amount demanded above, provided the whole of such amount (credit wrongly availed) demanded, interest leviable thereon, along with, reduced penalty is paid, within 30 days of the date of receipt of this Order, as per Section 11AC(1)(e) of the Central Excise Act, ....
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....ng in the secondary mill. This process is repeated till the ore is reduced to 75 micron size. The woollen blankets are washed every 3 hours and the washings (rough concentrates) collected are stored in concentrate tanks for 24 hours. These rough concentrates are fed to vibrating tables, treated and cleaned to remove impurities. The free gold recovered from this process is called 'Table Concentrate', which is taken for further processing of roasting and magnetting to obtain gold powder. 4.1 Further, it is submitted that the fine gold which could not be recovered through gravity process is recovered by chemical process called Carbon-in-Pulp process. The slurry containing very fine gold particles, discharged from the overflow by the cyclone classifier, is sent to the leaching plant in the Cyanidation-cum-carbon-in-pulp process section. The slurry is mixed with Sodium Cyanide, where all gold particles are dissolved in cyanide. This cyanide slurry is passed through carbon contactors, where dissolved gold is absorbed to the carbon. The gold deposited carbon is separated from the slurry by washing on the screen. This carbon is taken for acid and alkaline washing. After washing, the carbo....
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....nufactured in a factory starting from the stage of 'gold ore or concentrate' or 'Gold Dore Bar'. Gold Dore Bar was defined in the Explanation to Sl. No.21A to mean dore bars, having gold content not exceeding 80%. Simultaneously, Sl. No.21 of Notification No.5/2006-CE dated 01.03.2006 was also amended by Notification No.25/2011-CE dated 24.03.2011 by excluding 'dore bar' from the term 'any form of gold'. Consequently, the appellant got registered with the department and commenced discharging concessional rate of duty under Sl. No.21A on the gold bars manufactured from the stage of gold ore or concentrate from January 2012. They discharged total duty of Rs.3,54,61,240/- on the gold bars manufactured and cleared during the period 01.04.2011 to 31.12.2011. After issuance of Notification No.12/2012-CE dated 17.03.2012, the appellant continued to discharge Central Excise duty at concessional rate in terms of Sl. No.189 of the Notification No.12/2012-CE dated 17.03.2012. 4.3 He submits that the present dispute relates to admissibility of the benefit of exemption under Sl. No.189 of the Notification No. 12/2012CE dated 17.03.2012 on the manufacture of 'Gold Dore Bars'. The Ld. Sr. Advoca....
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....ed to include all items of gold (irrespective of purity) falling under Chapter 71, except jewellery or foreign currency coins of gold/silver. Thus, post 2004 serially numbered gold bars imported were subjected to Basic Customs Duty (BCD) at rate the rate of Rs.100/- per 10 gms and other forms of gold Rs.200/- per 10 gms. The said rates had been revised from time to time. 4.7 Learned Sr. Advocate further submitted that amendments have been brought to the Customs Tariff as well as Central Excise Tariff Act post 2004 keeping in mind the need to utilize excess capacity of domestic refineries and also to reduce the dependency on the import of gold. To make economically viable in the domestic industries to refine gold bars, the Government granted full BCD exemption and concessional Countervailing Duty (CVD) of Rs.140 per 10 gram on import of gold ore and concentrate. This exemption was extended by inserting Sl. No.518A to Notification No.21/2002-Cus. dated 01.03.2002. Simultaneously, Government enhanced rate of duty applicable to import of serially numbered gold bars. This enabled the refineries to import gold ore or concentrate at lower duty. Further, he has submitted that Sl. No.21A w....
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....fy the eligibility criteria. Once, it is found that the exemption Notification is applicable to the case of the assessee, the same should be construed liberally. In the present case, the appellant are manufacturers of 'gold bar' from the stage of gold ore or concentrate and that the gold dore bar manufactured by the appellant are classifiable under Chapter Heading 7108 of Central Excise Tariff Act, 1985 as 'gold bar'; and the appellants have satisfied all conditions of the Notification. The reference to the percentage of gold content as specified under the Explanation to the said Notification is relevant only to 'gold dore bar' from which gold bar is made and not to gold bar made from gold ore or concentrate. Further, it is submitted that the word' gold bar' has not been defined either in the Tariff nor in the Notification. 4.10 It is vehemently argued that to come under the scope of 'gold bar', the gold content in the dore bar should necessarily be more than 95% amounts to introducing a new condition in the Notification. It is submitted that gold bar can be manufactured from the stage of gold ore or concentrate or from gold dore bar. Sl. No.189 of the Notification extends the exe....
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....16.01.2012 was issued amending Notification No.5/2006-CE dated 01.03.2006. The said Notification No.2/2012-CE dated 16.01.2012 has not expressly provided percentage of gold content in the gold bar. It is the contention of the appellant that if the legislative intention was to deny the benefit of exemption under Sl. No.189 of the Notification No.12/2012-CE dated 17.03.2012, it would have expressly provided the content of gold in the 'Gold Bar' to avoid the ambiguity as in the case of Customs Notification. It is their contention that in the absence of percentage of gold specified for 'gold bar', as provided for 'Gold Dore Bar' in the Explanation to the said Notification No. 12/2012-CE dated 17.03.2012, it is therefore, irrelevant to say that the gold content in the 'gold bar' manufactured by the appellant from gold ore/concentrate should be more than 95% in extending the benefit of said Notification. 4.12 Further, assailing the impugned order that the appellant has mis-declared their product manufactured as 'gold bar' instead of 'Gold Dore Bar', they have submitted that gold bars fall under the Chapter Heading 7108 and the invoice issued by the appellant refer to gold bars. Also, in....
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....368) ELT 730 (Tri.-Hyd.) * Mangalore Refinery and Petrochemicals Ltd. vs. CCE & ST: 2019-VIL-413-CESTAT-BLR-CX * Burn Standard Co. Ltd. vs. CCE, Kolkata: 2011 (267) ELT 193 (Tri.) * Bharat Electronic Limited vs. CCE, Meerut: 2004 (165) ELT 485 (SC) 4.14 Also, it is submitted that demand of interest and penalty cannot be sustained. 5. Per contra, the learned Special Counsel for the Revenue has submitted that in the earlier proceeding i.e. Appeal No.E/26922/2013, the appellant had argued that "gold dore bar" is primary gold converted from any form of gold i.e., gold ore/concentrate and they are entitled to exemption under Sl. No.21 of the Notification No.5/2006-CE dt. 01.3.2006 as amended. From the commencement of investigation in September 2010, they have taken the stand that dore bars manufactured by them were not in pure form of gold as understood commercially which has been referred to at pages 122-132 of the present appeal paper-book. The appellants obtained registration in January 2012 and discharged voluntarily duty for the period from 1.4.2011 to 31.12.2011 claiming exemption under Sl. No.21A of Notification No.5/2006-CE dated 01.03.2006 declaring the goods to be ....
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....e to "gold bars other than tola bars, bearing manufacturer's serial number and weight expressed in metric units". The appellant had also taken support from the description of the goods in Central Excise Tariff Act, 1985 and the one mentioned in Harmonized System of Nomenclature (HSN). He has submitted that reliance placed by the appellant on such materials is totally incorrect and untenable because the description of goods in the entries under respective Notifications do not bear any resemblance to the tariff descriptions. 5.4 Further, rebutting the argument of the appellant that the conclusion of the adjudicating authority that 'dore bars' as having gold content not exceeding 95% is indicative of the fact that the gold bar referred to in the subjective entries should have gold content in excess of 95% amounts to introducing an additional condition, the Ld. Spl. Counsel has submitted that the reference to the purity by the Commissioner is a valid inference and does not constitute reading any additional condition into the subject entries. It is his contention that a uniform view should be taken for the entire period spanning 2007-2017 and gold dore bars could be regarded as primary....
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....om 01.04.2011 to 31.12.2011 amounting to Rs.3,54,61,240/-. * On 07.02.2012, the show-cause notice was issued to the appellants. 5.6 The argument that the department was having prior knowledge of the facts would not help the Appellant in view of the judgment of the Hon'ble Gujarat High Court in the case of CCE, Surat Vs. Neminath Fabrics Pvt. Ltd.: 2010 (256) ELT 359 (Guj.). Therefore, since there has been willful default on the part of the appellant accordingly invocation of extended period of limitation is justified. Consequently, imposition of penalty on the appellant is also justified. 6. Heard both sides and perused the records. 7. The issues involved in the present appeal for determination are whether: (i) appellants are entitled to concessional rate of duty as per Sl. No.189 of the Notification No.12/2012-CE dated 17.03.2012 for the period from July 2012 to June 2017 on the manufactured 'Gold Dore Bar' having purity less than 95%; (ii) demand is partially barred by limitation; and (iii) penalty is imposable on the appellant. 8. It is not in dispute that the appellants are engaged in the manufacture of 'Gold Dore Bars' from 'gold ore/concentrate' and claimed exemption, p....
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.... 3% - 10. The principal argument of the appellant in claiming benefit under Sl. No.189 of the Notification No.12/2012-CE dated 17.03.2012 is that there is no major difference between 'Gold Bars' and 'Gold Dore Bars' manufactured by them. It is their contention that the conditions prescribed under the said Notification allows concessional rate of duty to 'gold bars', other than tola bars bearing manufacturer's engraved serial number and weight in metric units manufactured in a factory starting from the stage of (a) gold ore or concentrate; (b) gold dore bar or silver dore bar. In the present case, they manufacture 'Gold Dore Bar' from the stage of gold ore by undertaking various processes as narrated above, which later are engraved with serial number and also its weight expressed in metric units. Besides, the gold content of the manufactured Gold Dore Bars is around 87-92%, hence, it is less than 95% as mentioned in the Explanation to the said Sl. No.189 of the Notification. Thus, all the conditions prescribed being complied with by the appellant, hence, denial of the benefit of exemption Notification is bad in law. Further, their argument is that since no definition/meaning of....
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.... as per dictionaries is given below, www.merriam-webster.com.dictionery Definition of GOLD BAR :a bar of gold; specifically : ASSAY BAR Definition of ASSAY BAR : a bar of pure or nearly pure gold or silver manufactured by the government as a Standard https:.financial-dictionary.thefreedictionary.com. Gold+bar Bars with a minimum content of 99.5% (two nines five in trader jargon; typically traded gold is four nines pure or 99.99%) gold, which may be held by central banks or traded by investors https://dictionary. cambridge .org/ dictionary/english/gold- bar A block of gold that can be traded on a gold market and is used by people and banks as a way of investing money. https://en.wikipedia.org/wiki/ Gold_bar A gold bar, also called gold bullion or a gold ingot, is a quantity of refined metallic gold of any shape that is made by a bar producer meeting standard conditions of manufacture, labeling, and record keeping. http://www.investorwords. com/7935/gold_bar.html A gold ingot fashioned in the shape of a bar that is 99.5%-99.9% pure in gold. In the US, their value is measured in troy ounces, whereas other nations may use grams. As discussed abo....
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.... in the finding of the learned Commissioner in as much as since the commencement of the proceedings after visit of the officers to the appellant's factory in the year 2010, had informed to the department with regard to the allegation of inadmissibility of Notification No.5/2006-CE dated 01.03.2006 through their letter dated 06.10.2010 after narrating the process of manufacture undertaken by them stated as follows: "18. Thus from the above discussions and the technical literature produced it is submitted the Gold Bars that leave the HGML's premises is in the form of Dore Bars that contain various impurities, apart from Gold and which are further sent to other refineries for further processing. It is, therefore, submitted that the Dore Bars that are produced by M/s HGML is covered under the description of 'Primary Gold'. 19. It is further informed that the Gold Bars that are dispatched from the HGML'S premises are punched with an identification/Serial number for which M/s HGML separately prepare records wherein the details such as weight, properties etc., are prepared and maintained internally. It is thus submitted that the identification/serial numbers that are punch....
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..... No.189 of the said Notification No.12/2012-CE dated 17.03.2012, cannot be acceptable for more than one reason. The final product emerged out of the process of manufacture narrated as above, is 'Gold Dore Bar' having purity of 87% to 92% and not 'Gold Bar' and the said 'Gold Dore Bar' is cleared to refineries to make 'Gold Bar' having purity of 999.99%. The argument of common parlance understanding of the 22-carat and 24-carat purity bar as 'Gold Bar' only, in our view, not relevant to the present circumstances of the case to extend the benefit of Notification. If it is the intention of the Legislature to treat both 'Gold Bar' and 'Gold Dore Bar' as one and the same, then there is no necessity to mention both the expressions in the same exemption Notification, one as 'raw material' and the other one as the as 'final product'. 16. The principles for interpretation of an exemption Notification have been laid down by the Hon'ble Supreme Court in Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company: 2018 (361) ELT 577 (SC). Their Lordships after analysing the gamut of case laws on the subject evolved over a period of time observed as: "52. To sum up, we answer the r....
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....ction 8(5) of the CST Act, distinguished the decisions placed reliance upon by the first Appellate Authority and the tribunal as well as the decision rendered by this Court in M/s Sterling Foods (supra) and came to hold that there is distinction between oil cake and de-oiled cake and they are two different commodities and not one and the same. Elaborating the discussion, the Division Bench held thus:- "The contention that the commodities will have to be understood in common parlance as understood by a common man is even harder to accept. What a common man understands need not necessarily mean what is understood in accordance with law. In the instant case, the framers of the schedule were aware of the distinction between oil cake and de-oiled case. Accordingly, they have treated it as two different commodities. Therefore, to hold that the view of a common man has to necessarily over ride the view of the Legislature is difficult to accept. The Distinction in law has been made which requires to be followed. Oil cake and de-oiled case cannot stand extended to de-oiled cake. The impact of the notification reducing the tax impact was every well known when the benefit was granted. A not....