TaxTMI 
TaxTMI 
2025 (5) TMI 1749
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....xcise Rules, 2002(Rules) and appropriating amounts paid towards duty. 1.2 Excise Appeal No. E/40720/2015 has been filed by Mr. Naresh Kumar Vij, Authorised Signatory of M/s. Bakers Product (India) (hereinafter referred to as Appellant-A2) assailing the above impugned order for imposing penalty under Rule 26 ibid. 1.3 The details of the duty demand and penalty involved in the subject appeals are tabulated below: - Appeal E/40719/2015-DB - Bakers Product (India) SI. No SCN / SOD No Date Period Duty (Rs) Penalty under Section 11AC 1 04/2014 07.05.2014 01.04.2009 to 14.08.2013 1,11,34,013 . 1,11,34,013 2 08/2014 04.09.2014 15.08.2013 to 31.10.2013 19,64,263 19,64,263 3 11/2014 26.11.2014 01.11.2013 to 28.02.2014 15,33,873 15,33,873 Appeal E/40720/2015-DB - Nares Kumar Vij SI.No SCN / SOD No Date Period Penalty under Rule 26 1 04/2014 07.05.2014 01.04.2009 to 14.08.2013 1,11,34,013 2 08/2014 04.09.2014 15.08.2013 to 31.10.2013 19,64,263 3 11/2014 26.11.2014 01.11.2013 to 28.02.2014 15,33,873 1.4 The said appea....
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....orically held that the benefit of credit can be extended to a manufacturer even in clandestine clearance cases, for the period prior to registration. i. Well Known Polysters Ltd. [2011-TIOL-989-CESTAT-AHM] ii. Icon Industries [2018 (7) TMI 1526 Del HC] iii. Embassy Property Development [2024 (1) TMI 983 CESTAT Blr] 3.2 In respect of demand of duty on clearances of Custard Powder, the appellant contended that the said product was covered under Sl.No.19 of Notification No. 1/2011 - CE dated 01.03.2011 and as per this Notification, the effective rate is 1% from 1.3.2011 up to 16.3.2012 and 2% with effect from 17.03.2012 and accordingly the amount of duty payable had to be reworked whereas the impugned order confirmed the demand of excise duty on the commodity at the rate of 8% under Notification No. 02/2008 dated 01.03.2009. 3.3 In respect of demand of duty on Icing Sugar, it was averred that The impugned order had demanded duty at the rate of 5%/6% as per Notification No. 02/2011 CE dated 01.03.2011 on Icing sugar whereas it is the appellant's case that the demand at the said rate is applicable only in cases where Cenvat credit is availed and Since, t....
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....ons namely Non-registration, Non-payment of duty and removal of goods without proper Invoices and non-filing of returns declaring the actual production, removal and other relevant particulars contained in para 15 of the Show Cause Notice dated 07.05.2014 issued by the Commissioner were not maintainable with effect from 15.08.2013. As such the Statements of Demand dated 04.09.2014 and 26.11.2014 could not have been issued to the appellant as the basic condition of Sub Section 7A of Section 11A namely "the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices" is not satisfied. Hence it was averred that the two Statements of Demand were required to be set aside and no Central Excise duty could be demanded on this ground. 3.6 The appellant submitted that the cum tax benefit should be extended to them for the period under dispute relying upon the decision in the case of Maruti Udyog Ltd. 3.7 It was contended that there was no suppression of facts with intent to evade payment of tax in as much the appellants sales ledger, which is the basis for payment of sales tax and for computation of Income for the Balance Sheet and annual....
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....Cenvat Credit and there is no provision in the law to make pre-judicial observations, prior to occurrence of an event; that there is no provision in the law for availment of Cenvat Credit from a retrospective effect date and that too during a period during which the assessee had not even registered with the Department. 8.2 It is seen from the records that the appellant manufactured baking powder by blending sodium bi carbonate, sodium aluminium sulphate and maize starch. They had claimed Cenvat Credit mainly for only one raw material namely Maize starch and to certain extent for sodium aluminium as against the duty demand of Rs.18,66,889/- for the period from 2009-10 to 2013-14. It is seen from para 5.1 (iii) of the Order-in-Original that the appellant has purchased duty paid Maize starch from Riddi Siddhi Limited, Gujarat Ambuja Exports Limited, etc. and the appellant has furnished the invoice wise details for claiming the Cenvat Credit. Thus, the duty paid nature of the inputs is not doubted by the Department. The only ground for denial of credit is that it cannot be extended for the period prior to Excise Registration. 8.3 It is a settled principle in law that the benefit ....
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....bove findings, there is no dispute that the inputs used i.e. PVR resin was by the assessee M/s. Icon Industries; in fact, the basic duty liability and penalty have been imposed on the basis of these findings. However, it is equally a matter of record that certain quantity of PVR resin too was used as a raw material. There may be no doubt that with respect to other inputs the assessee did not possess any document. However, that ought not have blinded the authority taking note of material which did exist on record (in the form of the payments made towards CVD) which can be legitimately claimed as input credit by the assessee. The record as it stands today also points to the assessee being given the benefit of SSI status and its consequential entitlement to such exemptions as are permissible. Given these circumstances and findings, the denial of Cenvat credit benefit to the assessee, was not justified. The impugned order of the Tribunal is therefore set aside. The respondent-Central Excise Authorities are directed to proceed to grant such Cenvat credit as is permissible to the appellant/assessee, having regard to the documents which are on record and which may be relevant and can be p....
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....apply to the goods in respect of which credit of duty on inputs or tax on input services has been taken under the provisions of the CENVAT Credit Rules, 2004. TABLE S. No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of the excisable goods (1) (2) (3) 17 2104 Soups and broths and preparations thereof 18 2105 00 00 All goods 19 2106 90 All kinds of food mixes, including instant food mixes It may be seen from the above entries that all kinds of food mixes including instant food mix attract 1% rate subject to non availment of cenvat credit. The appellant in their reply claimed that the custard powder manufactured by them is a food mix which are to be mixed with milk and is ready to use. Further, there is no doubt about the non availment of cenvat credit on input or input service used for the manufacture of the subject product. 9.3 It is noticed that Custard powder is specifically classifiable under Tariff Item 2106 90 80 of Central Excise Tariff and the show cause notice also adopted the same and hence we find force in the claim of the appellant and accordingly the custard powder manufacture....
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....lant highlighted the "common parlance test" by relying upon the Supreme Court decision in the case of Wockhardt Life Sciences [2012 (277) ELT 299 (SC)] and the Calcutta Springs Ltd. case [2008 (229) ELT 161 (SC)], the adjudicating authority has simply brushed aside the above claim by saying that the facts of the present case are different from the above cases and hence distinguishable 10.5 Apart from the above arguments, the appellant vide their reply to Show Cause Notice contended that the Barnd Name "Bakers" is registered for Corn Flour only and no prudent person manufacturing maize starch would approach the Registrar of Trade Mark and get Bakers Trade Mark for Corn Flour. Further, they contended in the reply that if it is maize starch as claimed by the Department then there is no brand name for maize starch and in such case duty demand on the ground of other man's brand name does not survive. However, the Adjudicating Authority has not examined the above points but simply confirmed the demand. 10.6 Regarding demand of duty on Maize Starch, Appellant intends to classify its product as Corn Flour under CTH 1102 of CETA. However, department seeks to demand duty on repacke....
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.... 1102 20 00 - Maize (corn) flour 1102 90 - Other : 1102 90 10 --- Rye flour 1102 90 90 --- Other CTH 1108 : 1108 Starches; inulin -Starches: 1108 11 00 -- Wheat starch 1108 12 00 -- Maize (Corn) starch 1108 13 00 -- Potato starch 1108 14 00 -- Manioc (cassava) starch 1108 19 -- Other: 1108 19 10 --- Sago 1108 19 90 --- Other 1108 20 00 - Inulin HSN Explanatory notes to CTH 1102 states : 11.02 - Cereal flours other than of wheat or meslin 1102.20 - Maize (corn) flour 13 02.90 - Other This heading covers flours (i.e., the pulverised products obtained by milling the cereals of Chapter 10) other than flours of wheat or meslin. Products of the milling of rye, barley, oats, maize (corn) (including whole cobs ground with or without their husks) grain sorghum, rice or buckwheat are classified in this heading as flours if they fulfil the requirements as to starch content and ash content set out in paragraph (A) of Chapter Note 2 (see General Explanatory Note) and comply with the criterion of passage through a standard sieve as....
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....ifting and drying. The duty demand was not in terms of brand dispute and hence SSI exemption ought to have been extended to the Appellant which was denied in the impugned order. Although passage through a sieve is not mentioned in the tariff, Appellant has more than satisfied the requirement specified in HSN. The department seeks classification under Chapter 1108 on the basis that the appellant clears maize starch as such after re-packing. However, the department lacks in any convincing material to establish the same. The classification of corn flour has been settled in the case of CCE, Mumbai-III vs. Corn Products Company (India) [1999 (108) ELT 673]. This case was maintained in Supreme Court as Commissioner vs. Corn Products Co. (India) Ltd. [2000 (121) E.L.T. 223]. Also, the case of Weikfield Products Co. Pvt. Ltd. vs. CCE, Pune [1999 (106) ELT 69] also supports the appellant for classification of corn flour. 10.9 Further, we have examined the arguments of the parties and it is apparent that the appellant marketed the product as corn flour only. The Department has not substantiated anything to disprove the claim of the appellant. At this juncture, we would like to refer to th....
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....rsons dealing with the subject-matter, a heavy burden lay upon the Revenue to disprove the said materials by adducing proper evidence. Unfortunately, no such attempt was made. As stated, the evidence led in this case conclusively goes to show that Nylon Twine manufactured by the assessee has been treated as a kind of Nylon Yarn by the people conversant with the trade. It is commonly considered as Nylon Yarn. Hence, it is to be classified under Item 18 of the Act. The Revenue has failed to establish the contrary....." 31. Similarly, in Hindustan Ferodo Limited v. Collector of Central Excise, Bombay, 1997 (2) SCC 677, it is held in Para 4 as under :- "It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within Item 22-F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, that the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed". 10.10 We would also like to refer to the larger bench decision in the case Brindavan Beverages [2019 (29) GSTL 418 (Tri- LB)] wherein it is held th....
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....pter Note 2B of Chapter 11 which is reproduced below: - 2 .- (A) Products from the milling of the cereals listed in the table below fall in this Chapter if they have, by weight on the dry product : (a) a starch content (determined by the modified Ewers polarimetric method) exceeding that indicated in Column (2); and (b) an ash content (after deduction of any added minerals) not exceeding that indicated in Column (3). Otherwise, they fall in heading 23.02. However, germ of cereals, whole, rolled, flaked or ground, is always classified in heading 11.04. (B) Products falling in this Chapter under the above provisions shall be classified in heading 11.01 or 11.02 if the percentage passing through a woven metal wire cloth sieve with the aperture indicated in Column (4) or (5) is not less, by weight, than that shown against the cereal concerned. Otherwise, they fall in heading 11.03 or 11.04. Cereal (1) Starch content (2) Ash content (3) Rate of passage through a sieve with an aperture of 315 micrometres (microns) (4) 500 micrometres (microns) (5) Wheat and ....
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....ssued on the basis of the details which are accounted in their books of accounts and it proves that there is no suppression of facts. They had not taken out Central Excise Registration on a bonafide belief that their products do not attract excise duty. It is seen that the main demand pertains to Corn Flour clearances which are not dutiable as held above. In respect of Baking Powder after allowing the Cenvat credit, the duty demanded of Rs.18,66,889/- will be drastically reduced. Further, after according the concessional rate of duty on Custard Powder and Icing Sugars also, the duty demand would not be significant. Their view that they are not required to take Central Excise Registration under a genuine plea that their products do not attract excise duty as they are related to agriculture and food products appears to be acceptable. In the cases of Collector of Central Excise, Mumbai -III Vs. Corn Products Co. (India) Ltd. [1999 (108) ELT 673 (Tribunal)] and Weikfield Products Co. (I) Pvt. Ltd. Vs. Collector of Central Excise, Pune [1999 (106) ELT 69 (Tribunal)] wherein it was held that sieving of duty paid starch and selling the same under the name 'Corn Flour' was ruled as not amo....
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.... the case of Pushpam Pharmaceuticals Company [1995 (3) TMI 100-SC] held as follows: - "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties....
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....e normal period of one year alone would survive. However, it is noticed that though the notice was issued on 07.05.2014, a corrigendum was issued on 14.11.2014 by modifying various paras of the notice thereby resulting in increasing the duty amount demanded and hence, the corrigendum date would be taken as the date of show cause notice. Consequently, the entire demand made in the Show Cause Notice No. 04/2014 dated 07.05.2014 as amended by corrigendum dated 14.11.2014 is beyond the time limit of one year as demand of duty covered the period from 2009-10 to 14.08.2013 and therefore, the entire demand made in this notice is hit by time limit. However, the demand made in the periodical notices are within the time limit. 12.1 With regard to the penalty, we hold that once extended period is not invokable, the question of imposing mandatory penalty under Section 11AC does not arise. Further, when the entire demand under Notice No. 04/2014 dated 07.05.2014 is set aside, the question of imposing any penalty does not arise. 12.2 During the period covered under the periodical notices, Section 11AC prescribes equal amount of penalty only in cases of suppression with intention to evade a....