TaxTMI 
TaxTMI 
2005 (10) TMI 89
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....essee-firms were manufacturer of branded chewing tobacco (final product) from "'additive mixture" (kimam). The said "kimam" was manufactured by the units of the assessees in Delhi and the said kimam was stock transferred to the assessees' units in UP and HP. We have held in our judgment in Civil Appeal Nos. 5747-5749 of 2000 that this kimam was excisable and classifiable under sub-heading 2404.49/2404.40 of Central Excise Tariff Act, 1985. Admittedly, the existence of assessees' units in Delhi, where kimam was manufactured, was not disclosed to the department, these units were not registered and they were unlicensed units. The three assessees however urged that there was no intention to evade duty as the said kimam was captively consumed in the manufacture of branded chewing tobacco and they were entitled to input relief under Notification No. 121/94-C.E., dated 11-8-1994. In this connection, the assessees contended before the Tribunal in the present case that they had maintained stock register, transfer challans and Form-IV register in their units in UP and HP, where the final product was manufactured and which registers indicated receipt and utilisation of kimam in the manufactur....
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....to a 100% Export-Oriented Undertaking or to a unit in Electronic Hardware Technology Park or Software Technology Parks), which are exempt from the whole of the duty of excise leviable thereon or are chargeable to 'Nil' rate of duty : Provided further that where such use of inputs is in a factory of a manufacturer, different from his factory where the goods have been produced, the exemption contained in this notification shall be allowable subject to the observance of the procedure set out in Chapter X of the Central Excise Rules, 1944. THE TABLE S. No. Description of final products Chapter or Heading number or sub-heading number of final products Chapter or Heading number or sub-heading number of inputs (1) (2) (3) (4) 1. (a) Cigarettes (b) Snuff (c) Preparation, containing snuff of tobacco in any proportion. 2403.11 2404.50 2404.60 2404.13 2404.50 2404.50 2. Chewing tobacco including preparations commonly known as "Khara Masala", "Kimam", "Dokta", "Zarda", "Sukha" and "Surti". 2404.41 2404.49 3. Fabrics of cotton, whether processed or not. 52 52 4. Fabrics of man-made fibres and filament yarn....
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....mentioned in that declaration or, by reason of any amendment to the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), a change in the Chapter, heading No. or sub-heading No., the assessee shall likewise file a fresh declaration or an amendment of the declaration already filed within thirty days of any alteration mentioned above, in the same manner as is provided in sub-rule (1). (3)The proper officer, duly empowered by the Central Government under Section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration filed under sub-rule (1) by an assessee, - (a) require any person to produce or deliver any document or thing relevant to the enquiry; and (b) examine any person acquainted with the facts and circumstances of the particulars given in the declaration or other records, in the manner provided in Section 14 of the Act. (4)The proper officer may after such further enquiry as he may consider necessary, reassess the correct amount of duty payable following the provisions of Section 11A of the Act and the assessee shall pa....
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....current on the last working day of the month; (iv) the Commissioner may, in circumstances of an exceptional nature, by an order in writing, require an assessee or class of assessees manufacturing or warehousing goods to which provisions of Chapter VII-A have been made applicable, to determine the duty and debit the account-current in such manner as may be specified by him in such order : Provided further that where any assessee manufactures or warehouses excisable goods falling under two or more Chapters of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), he may opt to maintain a single account-current for payment of duty due on all such goods after intimating the proper officer : Provided also that where an assessee maintains separately accounts-current for each excisable goods he may, in the event of un insufficient balance in any of the accounts-current, transfer, subject to such conditions as the Commissioner may specify in this behalf, an amount to such account-current from another account-current which has enough balance on date of such transfer. Where an assessee keeping an(1A) account-current under sub-rule (1)....
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....ne neatly and over his dated signature in all copies of the invoice; and (vii) where the assessee, after he has debited the duty due on the goods in the account-current referred to in sub-rule (1), finds it necessary to cancel any invoice, he shall send an intimation thereof in writing to the proper officer not later than the working day next following the day on which such invoice is cancelled, and may thereupon take credit of the duty in that account : (2A)Every assessee shall file with the proper officer the triplicate copies of the invoices or like documents issued, - (a) during first ten days of a month, on or before the twelfth day of the same month; (b) during the next ten days of the month, on or before the twenty-second day of the same month; and (c) during the remaining days of that month, on or before the fifth day of the following month, along with a covering list showing the serial number of such invoices as well as opening balance, credit, debit and closing balance in his account-current and in hi....
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....xcisable goods during the said period, the assessee shall file with the proper officer a nil return, unless otherwise directed by the Commissioner : Provided that the Commissioner may, having regard to the nature, variety and extent of production or manufacture or frequency of removals - (i) fix in relation to any assessee or class of assessees a period shorter than one month for filing the aforesaid return; (ii) permit that the aforesaid return may be filed by the assessee within a period not exceeding 21 days after the close of each month. (4)(a)Every assessee shall maintain such accounts, as the Commissioner may from time to time require or permit, subject to such conditions as may be specified by him of the production, manufacture, storage, delivery or disposal of the goods, including the materials received for or consumed in the manufacture of excisable goods or other goods, the goods and materials in stock with him and duty determined and paid by him. Unless specially exempted by the(b) Commissioner by order in writing, all books of accounts maintained under Clause (a) shall be....
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....d "quarterly" were substituted. Every assessee shall preserve the(9) book of accounts, documents and floppies where any document is generated on computer, for such periods and in such manner as may be specified by the Commissioner. Registration of certain persons.Rule 174. — Every person, who(1) cures, produces, manufactures, carries on trade, deals as a broker or commission agent, holds private store-room or warehouse or otherwise uses excisable goods or a person who issues invoice or invoices under Rule 57G or, as the case may be, Rule 57T shall get registered and shall not engage in the curing, production, manufacture, trade, dealing as broker or commission agent, storing in private store-room or warehouse or use excisable goods without having applied for such registration to the jurisdictional range officer or such officer in such forms as may be specified by the Board. (2)The Central Board of Excise and Customs, may, by notification in the Official Gazette, and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons from amongst the persons specified in sub-rule (1) who need not obtain such registration.....
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....nner. If the Commissioner is satisfied that the applicant is a person to whom the concession can be granted without danger to the revenue, and if he is satisfied, either by personal inspection or by that of an officer subordinate to him that the premises are suitable and contain a secure store-room suitable for the storage of the goods, and if the applicant agrees to bear the cost of such establishment as the Commissioner may consider necessary for supervising operation in his premises for the purposes of this Chapter, the Commissioner may grant the application, and the applicant shall then enter into a bond in the proper Form with such surety or sufficient security, in such amount and under such conditions as the Commissioner approves. Where, for this purpose, it is necessary for the applicant to obtain an Excise registration certificate, he shall submit the requisite application along with the proof for payment of registration fee and shall then be granted a registration certificate in the proper Form. The concession shall, unless renewed by the Commissioner, cease on the expiry of the registration certificate : Provided that, in the event of death, insolvency or insufficiency....
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.... for the following reasons. Firstly, we may point out that conceptually there is a difference between "short-payment" that arises from non-levy or any mistake connected with the levy on one hand and the "short-payment" arising from the failure of the buyer/user of the goods to account for them. It is equally well settled that exemption notifications have to be read strictly so far as the eligibility is concerned; that conditions mentioned therein ought not to be ignored and that the notification has to be read on its own terms [See : Commissioner of Central Excise, Allahabad v. Ginni Filaments Ltd. reported in 2005 (181) E.L.T. 145]. Under Rule 192, the responsibility for the payment of duty on the goods cleared under concession or exemption was transferred from the manufacturing unit to the buying/receiving unit. The person wishing to obtain the remission of duty was required to apply through the proper officer in the Form AL-6 and the proper officer had to grant licence to such persons in the Form L-6. Under Rule 196, if any excisable goods obtained under Rule 192 are not duly accounted for, then the duty had to be paid by the applicant i.e. by the person who applies for an AL-6 ....
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....uced or manufactured in the factory. Under Rule 173G, every assessee was required to keep a current account with the Commissioner for each category of excisable goods. Under Rule 174, every person manufacturing or using excisable goods was required to obtain registration and he was prohibited from producing, manufacturing, storing or using such goods, without obtaining registration from the jurisdictional competent officer. Accordingly, under Rule 192 of Chapter X, the applicant seeking remission/concession was required to obtain 'L-6' licence as also registration certificate in the prescribed form. This has not been noticed by this Court in the case of Thermax Private Ltd. (supra). The point which needs to be emphasised is that when an assessee seeks exemption under a notification, which prescribes compliance of Chapter X, there is a linkage between levy of duty on one hand and the accountability of the goods received/used in the factory where final product is manufactured. Therefore, one cannot ignore strict compliance of the aforestated rules while claiming exemption under such notification. This is particularly relevant in cases where input relief is claimed on the basis of the....