TaxTMI 
TaxTMI 
2024 (12) TMI 881
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....rder-in-Original No. 02/RN/COMMNR/M-II/2014-15 dated 30.06.2014 (herein after, referred to as 'the impugned order') passed by Commissioner of Central Excise, Mumbai-II, Mumbai. 2. The miscellaneous applications being No. E/Misc./85388/2024 and No. E/Misc./85350/2024 have been filed by the Revenue seeking change in the name and address of the respondent to "Commissioner of Central Goods & Service Tax and Central Excise, Navi Mumbai" having the office of the Commissionerate at the address "16th Floor, Satra Plaza, Sector 19-D, Palm Beach Road, Vashi, Navi Mumbai-400 705", due to change in the territorial jurisdiction after introduction of GST regime and as the appellants-assessee falls in their jurisdiction. As the revised name and address of the respondent correctly reflect the revised jurisdictional departmental authorities under whose jurisdiction the appellants-assessee is functioning for the purpose of Central Excise, these miscellaneous applications are allowed. Registry is directed to carry out the necessary changes for record purpose. 3.1 Briefly stated, the facts of the case are that the appellants herein is, inter alia, engaged in the manufacture and sale of petroleum....
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....0˚C and higher to be separated without them partly cracking into unwanted products such as coke and gas. One of the intermediate product from such vacuum distillation column is Vacuum Gas Oil (also known as Waxy). Such Vacuum Gas Oil is further processed in fluid catalytic cracking units. One of the product that emerges from this process is Liquified Petroleum Gas which primarily consists of Propane, Propylene (C3 hydro carbons) and Butane and Butylene (C4 hydro carbons). 3.4 The appellants were clearing the Propylene/Propene feed stock under the broad category Acyclic Hydrocarbons by classifying the said product under Central Excise Tariff Item (CETI) 2902 9090 attracting Central Excise duty at 12% adv., Since 01.03.1994, among 34 different products manufactured in their refinery, Propylene/Propene feed stock is one such product manufactured and cleared for home consumption. 3.5 On the basis of audit/investigation conducted at the Mahul refinery of the appellants, the Department had noticed that the goods declared as 'Propylene/Propene-PP feed stock' are being incorrectly classified as the propylene of less than 90% purity which are rightly classifiable under CETI 2711 ....
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.... to the Central Excise Tariff Act, 1985 to be levied. - (1) There shall be levied and collected in such manner as may be prescribed, - (a) a duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods (excluding goods produced or manufactured in special economic zones) specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule. ......" CENTRAL EXCISE TARIFF ACT, 1985 Duties specified in the First Schedule and the Second Schedule to be levied 2. The rates at which duties of excise shall be levied under the Central Excise Act, 1944 (1 of 1944) are specified in the First Schedule and the Second Schedule. xxx xxx xxx xxx FIRST SCHEDULE ....
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.... component which gives them their essential character, insofar as this criterion is applicable. (c) when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. xxx xxx xxx xxx GENERAL EXPLANATORY NOTES 1. Where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by "-", the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where, however, the description of an article or group of articles is preceded by "--", the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "-". Where the description of an article or group of articles is preceded by "---" or "----", the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has "-" or "--". ......." 5.3 From plain rea....
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....des. Normally, there is no difficulty in classifying any goods which are being manufactured/produced by assessees since many years, as earlier the Central Excise officers of the jurisdictional Range and Division of the Commissionerate, use to determine the classification and value of the goods manufactured, in terms of approval given by the Assistant/Deputy Commissioner for 'classification list/declaration' and 'price list/declaration' submitted by the assessees under Rule 173B of Central Excise Rules, 1944. However, for new items, classification is to be done on the basis of the aforesaid legal provisions including the relevant Section notes and chapter notes of the Act of 1985, Interpretative Rules of the said Act of 1985; HSN explanatory notes; Composition, properties, usage of goods etc. After introduction of Self-Assessment Procedure in 1996 the manufacturer/ producer of any goods, except cigarette, is himself required to assess the quantum of duty on the basis of the value determined by him and to determine the rate of duty as per classification of the goods under proper chapter and its suitable heading/sub-heading. 6.2 In the impugned order dated 30.06.2014, learned Commi....
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....eir production records is referred to as Propylene, the product Propylene in their marketing/sale records is referred to as 'PPF' (Polypropylene Feedstock). xxx xxx xxx xxx 46. I have also gone through the Certificate of Quality, listed in Annexure-A to the show cause notice as Ex.5. These are test reports of the noticee's own laboratory. Therein, I find that the test reports are pertaining to product C3 (Propylene), giving composition of the product, where the percentage of propylene is shown the varying between 64% to 78.99%. There are other components in this product i.e. As per test report No. C3/1307091 dated 16.11.2013, total C2 0.05%, propylene 77.07%, propane 22.72%, Total C² 0.16%. 47. For deciding the classification, I have also carefully gone through the Chapter Notes of Chapter 27 and Chapter 29. I have also gone through the Explanatory Notes to the Harmonized Commodity Description and Coding System (HSN), Vol.1, Chapter 1-29. In the HSN, I find that at page 220, covering Chapter head 2711, it is mentioned as "They include, in particular, the following gases, whether or not liquefied:", then at Sr. No. III, of the said Chapter hea....
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....belief for the assessee for non-payment of duty on a particular product, is essentially a question of fact to be decided on the basis of materials placed on record in this regard. Undisputedly, once the department disclosed suppression of facts, the same can be countered by the assessee with the plea of bona fide belief. However, in such cases, the burden lies on the assessee to place on record the necessary materials in support of such claim." It was further held that "The occasion to have bona fide belief can arise in case the assessee had harboured any doubt about their dutiability and thereafter on its efforts to ascertain the legal position in that regard, he was armed with necessary material to contend that there was no dutiability in respect of such product." (Emphasis supplied) 56. In the case at hand, the noticee have not placed any material record to establish their bona fide. The feeble attempt by saying that they had filed classification list 20 years ago holds no ground as discussed above. I find that the noticee have not placed any material on record to establish their bona fide so their this plea cannot be accepted. Further, their own refinery, at Kochi was ....
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....% adv, under ch 2711 14 00, paid by the assessee w.e.f 01.02.2014 'Under Protest', should be considered as the normal, regular and appropriate CE duty paid on all clearances of Propylene made from 01.02.2014 to 31.03.2014 and the 'Protest' lodged under its letter dated 04.03.2014, stands vacated. 84. I impose penalty of Rs. 5000/- each, on Shri M.S. Iyer, Shri H.S. Paranjape and Shri M. Venugopal, under rule 26 of the Central Excise Rules, 2002." 6.3 On perusal of the impugned order, it transpires that learned Commissioner had decided the classification of the disputed goods, primarily, on the basis of the purity of the propylene/propane, as reflected in the test report dated 16.11.2013 and on the basis of the description that the goods are of 'refinery grade'. Further, he had also relied upon the statements given by the persons working in the appellants' company, to come to the conclusion that the impugned goods produced and the appellants refinery plant is having purity in the range of 50% to 75%. 6.4 We have carefully perused the facts of the case, particularly the details of the test report as mentioned in the paragraph 46 of the impugned order, w....
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....t is the quality of a substance being free of anything that contaminates or debases it. Purity is important, because it can be used as an analytical standard to identify or determine the concentration of a substance, in order to decide whether it is separate chemically defined compound. 6.5 In the case before us, the contending classification of imported goods discussed in the impugned order are either under CETI 2902 9090 or CETH 2711 1400 of the First Schedule to the Act of 1985. Further, in the impugned order, learned Commissioner at paragraph 60 has also recorded that in the classification list claimed by the appellants to have submitted to the department, they had classified the impugned goods under CETI 2902.90 and in 2005, there was change in the tariff on account of transition from 6-digit to 8-digit classification code under Central Excise Tariff w.e.f. 28.02.2005 and thus 'propylene' is classifiable under CETI 2901 2200; however the appellants neither changed the classification of the impugned product nor did pay appropriate rate of duty which had caused the present dispute. Thus, in respect of the above classification dispute, it is clear that at the Chapter level its....
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....0 00 - Saturated - Unsaturated: 2901 21 00 -- Ethylene 2901 22 00 -- Propene (propylene) 2901 23 00 -- Butene (butylene) and isomers thereof ........ 2901 29 -- Other : 2901 29 10 --- Acetylene, whether or not in dissolved conditon 2901 29 20 --- Heptene (Heptylene) 2901 29 90 --- Other 2902 Cyclic hydrocarbons - Cyclanes, cyclenes and cycloterpenes : 2902 11 00 -- Cyclohexane 2902 19 00 -- Other ... ......... 2902 90 - Other : 2902 90 10 --- Dipentene ... ... 2902 90 90 --- Other" It could be seen that by applying the GIR 1, the position is made clear that Chapter Heading 27.11 covers within its scope and ambit, mainly of Petroleum gases and other gaseous hydrocarbons. However, separate chemically defined organic compounds, other than pure methane and propane, are not covered under chapter 27 and are to be classified under chapter 29. Further, separate chemically defined organic compounds, whether or not containing impurities remain classified under Chapter 29. Moreover, it is only pure methane and propane of chapter 27 which are excluded from the ....
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.... -In gaseous state: 2711.21--Natural gas 2711.29 --Other This heading covers crude gaseous hydrocarbons obtained as natural gases or from petroleum, or produced chemically. Methane and propane are, however, included even when pure. These hydrocarbons are gaseous at a temperature of 15 °C and under a pressure of 1,013 millibars (101.3 kPa). They may be presented under pressure as liquids in metal containers and are often treated, as a safety measure, by the addition of small quantities of highly odoriferous substances to indicate leaks. They include, in particular, the following gases, whether or not liquefied: I. Methane and propane, whether or not pure. II. Ethane and ethylene less than 95% pure. (Ethane and ethylene not less than 95% pure fall in heading 29.01.) III. Propene (propylene) less than 90% pure. (Propene not less than 90 % pure falls in heading 29.01.) IV. Butane containing less than 95% of n-butane and less than 95% of isobutane. (Butane containing not less than 95% of n-butane or isobutane ....
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....reof on trade or common parlance, [CCE vs. Fusebase Eltoto Ltd. 67-E.L.T 30 (SC): Indian Cable Co. Ltd. Vs. CCE - 74 E.L.T. 22 (SC); Metagraphs Pvt. Ltd Vs. CCE-88 E.L.T 639 (SC): United Copiex (India) Pvt. Ltd. vs. CST - 94 E.L.T. 28 (SC)]. (ii) It is an accepted principle of classification that the goods are to be classified according to their popular meaning as understood in the commercial sense and not as per the scientific/technical meaning [Plasmac Machine Mfg. Co. Pvt. Ltd. Vs. CCE 51 E.L.T 161 (SC)]. However, where the tariff heading/sub-heading itself uses highly scientific and technical terms, the scientific/technical meaning shall take precedence over the commercial/trade parlance [UOI vs. Sahney Steel and Press Works Ltd. 58 E.L.T 38 (SC)]. Also, classification according to commercial nomenclature or trade understanding should be avoided where the statutory context in which the tariff entry appears requires otherwise. [Akbar Badruddin Jiwani vs. Collector of Customs 47 E.L.T 161 (SC)]. (iii) Normally, classification is to be done with reference to the specific wordings of the headings/sub-headings as mentioned in the tariff. However, where the goods in....
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....ith the opening stock, quantity manufactured, quantity cleared for home consumption, assessable value, rate of duty, duty payable on the actually paid have been provided by the appellants. Further, correspondence exchanged between the appellants and the Department, particularly letter F. No. III/10-202/EA-2000/BPCL/Group E/F/2013 dated 27.11.2013 written by the Superintendent (Audit Group E/F), Audit Section, C. Ex., Mumbai addressed to the appellants, have raised the issue of classification adopted by the appellants under CETI 290129 as incorrect, in terms of the test report and the HSN explanatory notes, requesting the appellants to pay the differential duty along with interest for revising the classification under CETI 2711 1400, in respect of the impugned goods cleared for the last 5 years. In response to such communication, the appellants vide their letter dated 04.03.2014 had informed that they are revising the classification under CETI 2711 1400 and paying the duty on the rate of 14% adv. under protest. These records clearly prove that the classification of the impugned product was initially approved by the Department under the classification adopted by the appellants, and t....
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....ise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were not required to be included and these did not include the value of the exempted goods which they manufactured at the relevant time. The Tribunal found that the explanation was plausible, and also noted that the Department had full knowledge of the facts about manufacture of all the goods manufactured by the respondent when the declaration was filed by the respondent. The respondent did not include the value of the product other than those falling under Tariff Item 14E manufactured by the respondent and this was in the knowledge, according to the Tribunal, of the authorities. These findin....
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....p;India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Filing of declaration consequent on abolition of Classification List - Instruction regarding. I am directed to invite your attention to the provisions of Rule 173B of Central Excise Rules, 1944, as introduced by Notification No. 11/95-C.E. (N.T.), dated the 16th March, 1995. 2. Rule 173B provides for filing of a declaration of goods produced or manufactured by an assessee. In order to secure uniformity and to carry out proper checks in this regard, the following instructions are issued :- 3. Assessee shall file the declaration as per Proforma enclosed with the Range Superintendent in quadruplicate by 15th May, 1995 (or within reasonable time thereafter) initially and, thereafter, at the beginning of each financial year. He should file a fresh declaration as and when there is a change in the rate of duty or tariff classification in respect of the goods manufactured by him or whenever a new item is intended to be manufactured and not contained in the declaration already filed. The correctness and completeness of....
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....fied with the correctness and completeness of the declaration and after concluding whatever enquiry is necessary, shall forward the Duplicate copy of the Declaration to the Collectorate headquarters. He shall also suitably instruct the Range Superintendent within 30 (thirty) days of the receipt of the Declaration in his office. 9. The Range Superintendent shall finalise the assessment in RT-12 keeping in view the observations/instructions, received from the Assistant Collector with reference to declarations. Show-Cause Notice must be issued in time, wherever necessary. 10. Trade and field formations may be informed. 11. Receipt of this circular may be acknowledged. Proforma for Filing Declaration under Rule 173B QUADRUPLICATE    Range___________ Code No. _______ 1. Serial Number of the Declaration (to be allotted by the receiving range). Division_________ Code No. ________ 2. Serial Number of the earlier Declaration. Collectorate______ Code No. ________ 3. Whether Amending/ Superseding declaration already filed. State ____________ Code No. ________ ....
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....tify the correctness of the classification and applicability of exemption notification benefit, if any. In such a circumstance, when a specified procedure is being followed by the department, the product 'propylene/propene feed stock' being in existence as a part of the Mahul refinery plant of the appellants, cannot be said to have been mis-declared or any information relating to such production and clearance of the impugned products have been with held with deliberate intention to evade excise duty, more so when periodical ER-1 returns have been filed with the Department. 10. In view of the foregoing discussions and analysis, and on the basis of the judgements of the Hon'ble Supreme Court, we are of the considered view that the classification of the impugned goods have not been properly arrived at on the basis of facts and the legal provisions as applicable under the Central Excise Act, 1944; the rules made thereunder and the Central Excise Tariff Act, 1985. Therefore, the classification of the impugned goods involved in the case and the resultant demand of Central Excise duty, if any, during the normal period is required to be determined on the basis of the facts and evidences....