TaxTMI 
TaxTMI 
2025 (11) TMI 1538
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....tral Excise Signatory; R.D. Yalkar, Authorized Central Excise Signatory; C.A. Ponnappa, Manager (Marketing) and T.S. Ramachandran, Senior Manager, Marketing (herein after, referred together as "the appellants", for short) assailing the Order-in-Original No. 33/CEX/2006 dated 24.10.2006 (herein after, referred to as "the impugned order") passed by the Commissioner of Central Excise & Customs, Nashik. 2.1 Brief facts of the case, leading to these appeals, are summarized herein below: 2.2. The appellants herein is engaged inter alia, in the manufacturer of 'drip and sprinkler system' and 'parts thereof' in their factory at Jalgaon, by classifying the aforesaid products under Chapter Heading 84.24 of the First Schedule to the Central Excise Tariff Act, 1985. The appellants are the registered taxpayers holding Central Excise Registration No. JD/JR-II/5/ JISL/Ch-84/94 for manufacture of various products such as polytubes, micro tubes, HDPE pipes of various types falling under the Central Excise Tariff. 2.3 Directorate of Central Excise Intelligence, Mumbai Zonal Unit (DGCEI) had developed an intelligence that the appellants are indulging in evasion of Central Excise duty on poly....
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....e Signatory; R.D. Yalkar, Authorized Central Excise Signatory, under Rule 209A ibid vide Order-in-Original dated 24.10.2006. However, he dropped the proceedings for confiscation of plant and machinery, land, building etc., under Rule 173(Q) ibid. Feeling aggrieved with the aforesaid order dated 24.10.2006, the appellants have filed appeals before the Tribunal and the same was decided vide Final Order No. A/790 to 803/2007/C-I/EB dated 16.10.2007 by setting aside the adjudged demands including the penalties. The relevant paragraphs of the said order of the Tribunal is as follows: "2. We have heard both sides. We find that there is no dispute that the products on which duty has been confirmed fall for classification under chapter heading 84.24 of the Schedule to the Central Excise Tariff Act and are eligible to benefit of exemption from payment of duty in terms of Notification No.46/94-CE, dated 1.3.1994 and Notification No.56/95-CE, dated 16.3.1995. The classification and the eligibility to benefit of exemption has been accepted by the Commissioner in the impugned order in para 84. However, it is the finding of the Commissioner that the question of classification and exempt....
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....allowed as what was exempted under Notification was mechanical appliances used in agriculture and horticulture only and this exemption was not available in respect of parts of appliances. The goods in question i.e. Poly Tubes etc. were parts of appliances and therefore not entitled to exemption. 7. We have considered the submissions. submissions, We are unable to accept the plea of the applicant that exemption under Notification No.46/94 dated 1.3.94 was dependent on the fact that whether the assessees have taken modvat credit on the inputs or not as there is no such condition was inbuilt in the provisions of Notification 46/94. We also hold that the Apex Court decision in the case of Amrit Paper is not relevant in the matter before us as para 13 and 14 of the order referred to by applicant only refers to provisions of Rule 57C and states that the credit of input duty shall not be admissible when the final product is exempted from whole of excise duty leviable thereon. We are not for a moment suggesting that the applicant could have taken the credit inspite of final goods being exempted. All that we have said is that payment of duty on the final product, which was not othe....
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....d the aforesaid appeal, being not maintainable on that ground, and left it open to the Revenue to pursue an appropriate proceeding in accordance with law. 2.8 Subsequently, the Revenue had filed a Writ Petition No.185 of 2012 before the Hon'ble High Court of Bombay. This was finally disposed of by the Hon'ble High Court in pronouncement of its judgement on 02.01.2025, by remanding the matter to the Tribunal for considering all the issues that arise in appeal afresh, including the three issues involving substantial question of law, stated therein. Therefore, the issue was remanded back to the Tribunal, for passing a reasoned order dealing with all the issues, duly following the principles laid down by the Hon'ble Supreme Court in the case of Santosh Hazare Vs. Purushottam Tiwari [1 AIR 2001 SC 965] for due discharge of the duties and obligations cast on the first appellate Court. Further, the Hon'ble High Court also issued an order dated 29.01.2025 for correcting an error, to be read along its earlier order. 2.9 On the basis of the aforesaid order dated 02.01.2025 issued by the Hon'ble High Court of Bombay, we had taken up this case for hearing and disposal of these appeals fi....
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....quipment/ system, having no other use, then such Plastic Parts are to be classified under sub-heading No. 8424.91. Therefore, he claimed that the appellants are eligible for exemption from payment of excise duty under Notification No.46/94-C.E. dated 01.03.1994 (Sr. No.20) and succeeding Notification No.56/95-C.E. dated 16.03.1995 (Sr. No. 17). However, due to coercive action by officers of the Central Excise Preventive Team of Nashik Division, the appellants were forced to pay the central excise duty on the impugned goods 'under protest'. Further, DGCEI also conducted investigation and issued SCN dated 26.02.1999, with utmost disregard to the facts of the case and the issues having been clarified by the Board. 3.4 He further submitted that when the appellants had accounted for the entire sale proceeds of the disputed goods, including those attributable to allegedly cleared without payment of duty, in the books of accounts, there exist no ground for the department to claim of clandestine removal and the same is factually incorrect and not sustainable. He further submitted that the demand of duty for the period November, 1995 to November, 1997, is barred by limitation, when Class....
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....ubes and H.D.P.E. pipes manufactured by the appellants during the disputed period November, 1995 to 21.11.1997 are classifiable under heading 3917 or under heading 8424 of the First Schedule to the Central Excise Tariff Act, 1985; and whether such goods are eligible for exemption from payment of Central Excise duty vide Serial No. 20 of the Notification No.46/94-C.E. dated 01.3.1994 read with Notification No.56/95-C.E. dated 16.3.1995 (Serial No.17), or Otherwise? (iii) whether the appellants have manufactured and cleared clandestinely, the disputed goods from their factory premises at Jalgaon to their own depots and various other customers, and if so, whether central excise duty demand of Rs.8,91,58,843/- attributable to such clearances, confirmed under Section 11A(2) of the Central Excise Act, 1944, in the impugned order along with imposition of penalties on the appellants are sustainable or not? 7.1 In order to appreciate the issues under dispute, the specific legal provisions of the Central Excise Act, 1944, Central Excise Rules, 1994 governing the issues under dispute at the relevant time, are extracted and herein given below for ease of reference: Central....
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....endent of Central Excise, having jurisdiction over the factory, a declaration (in quadruplicate) showing,- (a) the full description of- (i) all excisable goods produced or manufactured by him, (ii) all other goods produced or manufactured by him and intended to be removed from his factory, and (iii) all the excisable goods already deposited or likely to be deposited from time to time without payment of duty in his warehouse; (b) the Chapter, heading No. and sub-heading No., if any, of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) under which each goods fall; (c) the rate of duty leviable on each such goods; (d) the exemption notification availed or proposed to be availed, if any; and (e) such other particulars as the Commissioner may direct, and obtain a dated acknowledgement of the said declaration: Provided that such declaration shall be filed on or before the 15th May, 1995 or such extended period as the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise may permit: Provided further that an assessee producing or manufacturing excisable goods ....
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....y paid as provided under section 12A of the Act; (ii) that such documents also contain a declaration of the price; (iii) that such documents also indicate, wherever applicable, individually the central excise duty, other taxes, all discounts and other consideration if any, for the difference between the price and the value of the goods under section 4 of the Act; (iv) that such documents also indicate the date and time of removal of the goods: Provided further that where an assessee,- (i) sells goods to or through related persons as defined in section 4 of the Act; or (ii) uses such goods for manufacture or production of other goods in his factory; or (iii) removes such goods for free distribution; or (iv) removes such goods in any other manner which does not involve sale; or (v) removes goods of the same kind and quality from his factories located in the jurisdiction of different Commissioners of Central Excise or Assistant Commissioners of Central Excise or Deputy Commissioner of Central Excise he shall file, with the proper officer a declaration, in such form and in such manner and at such ....
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....e by using indelible pencil and double-sided carbon, and the assessee shall periodically make credit in such account-current, by cash payment into the treasury so as to keep the balance, in such account-current, sufficient to cover the duty due on the goods intended to be removed at anytime; and every such assessee shall pay the duty determined by each consignment by debit to such account-current before removal of the goods: xxx xxx xxx xxx (3) Within five days after the close of each month every assessee shall, in lieu of the returns prescribed under rule 54, file with the proper officer in quintuplicate a monthly return in the proper form showing the quantity of excisable goods manufactured or received under bond during the month, the quantity (if any) used within the factory for the manufacture of another commodity, the quantity removed on payment of duty from the place or premises specified under rule 9 or from the store-room or other place of storage approved by the Commissioner under rule 47, duty paid on such quantity, particulars of invoices or like documents under which such quantity was removed; the quantity removed without payment of duty for export or ....
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....s otherwise by rule or order required) to the proper officer in the proper Form and shall deliver it to the officer at least twelve hours (or such other period as may be elsewhere prescribed or as the Commissioner may in any particular case require or allow) before it is intended to remove the goods. The officer shall, thereupon, assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the treasury, or, paid to the account of the Commissioner in the Reserve Bank of India or the State Bank of India, (or has been despatched to the Chief Accounts Officer by the money-order) shall allow the goods to be cleared: Provided that where removals from a factory are frequent and the manufacturer maintains a sufficient credit balance in his accountcurrent maintained under rule 9 for payment of duty, the Assistant Commissioner may, on a request by the manufacturer, permit, by an order in writing, removal of goods on presentation of a gate-pass as prescribed under rule 52A, subject to the observance of such procedure as may be prescribed in this regard by the Commissioner. Rule - 52A.Goods to be delivered on an invoice :- ....
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....; (iv) the quadruplicate copy shall be marked as QUADRUPLICATE FOR ASSESSEE. (4) If all the packages comprising a consignment are despatched in one lot at any one time, only one invoice shall be made out in respect of the consignment. If, however, a consignment is split up into two or more lots each of which is despatched separately either on the same day or on different days, a separate invoice shall be made out in respect of each such lot. In case a consignment is loaded on more than one vehicle, vessel, pack animal or other means of conveyance which do not travel together but separately or at intervals, a separate invoice shall be made out in respect of each vehicle, vessel, pack animal or other conveyance. (5) Invoice shall be maintained in two sets- (i) one for clearance for home consumption; and (ii) the other for clearances for export. (6) Each invoice shall bear a printed serial running for the whole financial year beginning on the 1st April of each year. Only one invoice book of each type shall be used by a factory for removal of excisable goods at any one time unless otherwise specially permitted by the Commissioner in....
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....ed in rule 53 of the said rules on the particular day. Signature of Registered person (2) The stock account maintained under sub-rule (1) shall, after being filled up, be preserved for a period of not less than five years and kept available for inspection by any officer. xxx xxx xxx xxx Rule - 54. Monthly returns :- Within five days after the close of each month every manufacturer shall submit to the proper officer a monthly return in the proper Form showing the quantity of excisable goods manufactured during the month, the quantity (if any) used within the factory for the manufacture of another commodity, the quantity removed on payment of duty from the place or premises specified under rule 9 or from the store-room or other place of storage approved by the Commissioner under rule 47, the quantity removed for export without payment of duty and such other particulars as may be elsewhere prescribed or as the Commissioner may, by general or special order, require, and, where so required by the Commissioner, by a written notice, shall submit a similar return in the proper Form showing all the other products manufactured in and issued from t....
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.... column (2) of the said Table, shall be allowed as credit when used in or in relation to the manufacture of the said final products and the credit of duty so allowed shall be utilised for payment of duty leviable on the said final products, or as the case may be, on such inputs, if such inputs have been permitted to be cleared under rule 57F of the said Rules: xxx xxx xxx xxx TABLE S. No. Description of inputs Description of final products (1) (2) (3) All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, - All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, - (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (ii) goods classifiable under heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (ii) goods classifiable under heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (iii) goods classifiable under subheading N....
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....in Software Technology Parks or supplied to the United Nations or an international organisation for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 108/95-Central Excises, dated 28th August, 1995 and the manufacturer takes credit of the specified duty on any input (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (2) of this rule are complied with, pay an amount equal to eight per cent. of the price (excluding sales tax and other taxes, if any, payable on such goods) of the second category of final products charged by the manufacturer for the sale of such goods at the time of their clearance from the factory by adjustment in the credit account maintained under subrule (3) of rule 57G or in the accounts maintained under rule 9 or sub-rule (1) of rule 173G or if such adjustment is not pos....
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.... of any statutory definition, or any guideline provided by HS explanatory notes, the trade parlance theory is to be adopted for ascertaining as to how the goods are known in the common trade parlance for the purpose of dealing between the parties. (ii) The rate of Central Excise duty at which the manufacturer is required to pay the duty is prescribed under the Schedule of the Central Excise Tariff Act, 1985. The taxable event under the Central Excise law is 'manufacture' and the liability of Central Excise duty arises as soon as the goods are manufactured and are required to be entered into 'RG-1' Registrar. Upon introduction of Self-Removal procedure, the assessees were allowed to quantify the duty on the basis of approved classification list and the price list and clear the goods on payment of appropriate duty. Further, after doing away with the gate pass system of control in 1994 with the invoice-based system, all clearances are to be effected on manufacturer's own invoice. It is also important to note that the system of Self-Assessment in central excise was introduced in 1996, where the assessee himself is required to assess his duty liability by declaring the classifi....
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....PLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS; AND PARTS AND ACCESSORIES OF SUCH ARTICLES Notes : 1. This Section does not cover : (a) transmission or conveyor belts or belting, of plastics of Chapter 39, or of vulcanised rubber (heading 4010), or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016); xxx xxx xxx xxx 2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading No.84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than heading Nos. 84.85 and 85.48) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading No.84.79 o....
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....micro tubes and H.D.P.E. pipes as follows: 'Polytubes: Unlike the other plastic pipes/tubes, "poly-tubes" are exclusively used in agriculture for micro (Drip Irrigation System), as 'Laterals' by farmers. Apart from their use in agriculture, poly-tubes do not have any other application. These poly-tubes are laid on the ground and are open to atmosphere (hot and cold conditions); the raw-material used for these poly-tubes is not ordinary pipe grade material but special grade material namely "Industrial LLDPE" (Linear Low Density Poly-ethylene) because of its better environmental stress, cracking resistance quality as well as master batch to give required strength. LLDPE used to manufacture poly- tubes is of special grades developed specifically for agricultural use. The technology to manufacture poly-tubes is very specific and special; Unlike the other plastic tubes/pipes/hoses, which are round, the poly-tubes are manufactured in oval shape to suit their laying in agriculture farms and to make the drip and dripper placement convenient. Even to install poly-tubes in the Drip Irrigation Systems, special type of fittings are needed, which are not at all used with ordin....
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....ppellants have also submitted that as per Chapter Note (2)(k) of Chapter 39, CETA excludes specifically articles of Section (XVI) i.e., Machine and machineries and mechanical or electrical appliances. Further, they also quoted HSN to state that in general the goods of Section XVI may be of any material; in the great majority of cases they are of base metal, but the Section also covers certain machinery of other materials (e.g. pumps wholly of plastics) and parts of plastic, of wood, precious metal etc. They also submitted an extract of explanatory notes of the Harmonized System of Nomenclature (HSN) which very clearly explain about the impugned products, forming part of the Drip Irrigation System as follows: "(E)Irrigation Systems: These irrigation systems consisting of various components linked together shall include: (i) a control (mesh, filters, fertilizers, injectors, metering valves, non-return valves, pressure regulators, pressure gauge, air vent etc; (ii) a underground net-work (dispersion lines and drainage lines which carry water from the control station to the irrigation zones; and (iii) a service net-work (dripper lines incorp....
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....ticles of plastics under chapter heading no.39.17 or under sub-heading 8424.91, for the purpose of uniformity in assessment and eligibility to exemption benefit. The circular No. 380/13/98-CX dated 16.03.1998 issued in this regard is extracted and given below: Circular No. 380/13/98-CX Dated 16/3/98 F.No. 93/13/97-CX.3 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs, New Delhi Subject: Classification and dutiability of plastic pipes and other plastic items used in the manufacture of Sprinkler Irrigation equipment- regarding. I am directed to say that a doubt has been raised regarding classification of plastic pipes, pipe fittings and other plastic components of sprinkler irrigation equipment; whether they would be classifiable under sub-heading 8424.91, as parts of Sprinkler Irrigation Equipments and be charged at the applicable rate of duty or they will be classifiable as articles of plastics and assessed to duty, where no exemption is available. 2. The matter has been examined by the Board. Plastic pipes and tubes are found to be used as parts of the sprinkler irrigation equipment. How....
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....it of exemption under notification No.56/95 dated 16.03.1995 is justified. The relevant paragraphs of the said order is extracted below: "6. The department in the show cause notice has alleged that LDPE/ HDPE pipes manufactured by the appellants do not appear to be classifiable under sub-heading 84.24 since they are not for use solely or principally with DIS. Note 2 of Section XVI lays down as follows : 2. Subject to Note 1 of this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of Heading Nos. 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules : (a) Parts which are goods included in any of the headings of Chapter 84 or Chapter 85 (other than Heading Nos. 84.09, 84.31, 84.48, 84.86, 84.73, 84.85, 85.03, 85.22, 85.29, 85.38 and 85.48) are in all cases to be classified in the respective headings. (b) Other parts if suitable for use solely or principally with a particular kind of machine, or with number of machines of the same heading (including a machine of heading No. 84.79 or heading No. 85.43) are to be classified with machines of that kind or in H....
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.... No. 91.14); and (c) Articles of heading Nos. 83.01, 83.02, 83.08, 83.10 and frames and mirrors, of base metal, of heading No. 83.06. It is contended that only these parts which are specified therein are to be treated as parts of general use and not others. It was also pointed out by the learned Consultant that the parts of DIS falling under 84.24 are not mentioned in the above note No. 2. On consideration of the submissions and on perusal of the above Note 2 of Section XV it is clear that the article and parts of heading 84.24 are not mentioned therein. Further the evidence on record clearly discloses that the items in question are specifically removed for the purpose of DIS and DIS would not come into existence without these manufactured pipes along with its fixtures. The appellants have been manufacturing and clearing the DIS in terms of the specific orders received from the parties. The invoices are supportive of their pleas. They have also produced their marketing literature which shows that these pipes are designed and the system is also designed for lay out for supply of water to the agriculture. On perusal of the evidence it is clear that the pipes are lai....
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....re regulators, pressure gauges, air vents, etc.); (ii) an underground network (distribution lines and branch lines which carry the water from the control station to the irrigation zone); and (iii) a surface network (dripper lines incorporating the drippers). Such systems are classified in this heading as functional units within the meaning of Note 4 to Section XVI (see the General Explanatory Note to that Section). This heading also covers: (1) Machines for coating various objects (for example, cups, cartons, boxes) by spraying with paraffin wax or molten wax. (2) Electrostatic painting apparatus consisting of a spray gun connected to a paint container by a flexible tube carrying paint, and also connected to a high-tension generator by an electric cable. The electrostatic field created between the object to be painted and the gun attracts the paint particles sprayed by compressed air to that object and prevents dispersion. (3) Industrial robots specially designed for projecting, dispersing or spraying liquids or powders. PARTS Subject to the general provisions regarding the classification of parts (see....
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....red or warehoused & other goods produced or manufactured which are intended to be removed by the appellants from their factory in compliance with Rule 173B of the Central Excise Rules, 1994. Further, the appellants had obtained necessary approval from the proper officer of the Central Excise department for classification of all goods manufactured by them w.e.f. 01.04.1991, including approval for classification of the goods viz., (i) 'Mechanical appliances for projecting, dispersing or spraying liquid water various parts of Drip Irrigation Systems viz., polytubes, biwalls, valves, emitters, drippers, micro sprinklers, poly fittings, sand filters etc., under sub-heading 8424.00; (ii) P.V.C. pipes and fittings under sub-heading 3917.00 and (iii) cellular P.V.C. foam sheets of other plastics, rigid sheets of various sizes and thickness under sub-heading 3921.19. Further, the appellants claim for exemption benefit for the goods under relevant Notifications No.111/88-C.E. dated 01.03.1988, No.46/94-C.E. dated 1.3.1994 (Sr.No.20) and No.56/95-C.E. dated 16.03.1995 (Sr.No.17) for Drip Irrigation System and its parts were also approved by the Central Excise authorities. We have perused the ....
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....it of exemption under notification No.69/87; such goods are excluded from the scope of classification under chapter 39. The said order of the original authority was appealed before the Collector of Customs (Appeals), Bombay by the Department; and vide order dated 03.05.1990, learned Collector of Customs (Appeals) had held that the order of the Assistant Collector dated 15.06.1998 is proper and legal both on the merits of classification as well as in the context of competence jurisdiction. Accordingly, he upheld the order of classification by the party and dismissed the appeal filed by the Department. As the issue of classification of the impugned goods in respect of the appellants was well settled by the aforesaid orders, it is only on 31.10.1994 by issue of a letter from the Inspector of Central Excise (Preventive), Nashik, the appellants were directed for payment of appropriate Central Excise duty on clearance of tubes/tubings; vide letter dated 06.12.1994 of the Superintendent of Central Excise, the appellants were asked to pay the Excise duty under protest, by following the procedure prescribed in Rule 233 ibid, and revise the Central Excise Registration so as to indicate the p....
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....f goods under the classification of sub-heading 8424.00, on which the applicable excise duty leviable thereon is 'NIL'. Therefore, in our considered opinion there exists no valid ground for treating the clearances made by the appellants being in violation of Rule 9(1) and Rule 173F of Central Excise Rules, 1944. 8.5 From the available records in the case file, we find that the periodical RT-12 returns have been submitted by the appellants to the jurisdictional Central Excise authorities along with details of RG-23 accounts, copies of Excise invoices covering clearances of the goods from their factory, and these returns had been duly approved by the Department. Further, the daily stock account, in the prescribed form of R.G.1 have been maintained by the appellants and produced before the jurisdictional Central Excise authorities. Further, it has also been explained by the appellants that during the course of manufacture of impugned products there arises waste, defective goods, which are taken further for grinding and granulation for further processing in manufacture of final products. In addition to this, the impugned goods have to undergo various tests prescribed as per BIS Stan....
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.... no valid ground for alleging violation of sub-rules (1) (2) (3) & (4) of Rule 173G of the Central Excise Rules, 1944. 8.6 In this regard we find that the Co-ordinate Bench of the Tribunal in the case of Rajasthan Explosives & Chemicals Ltd., Vs. Commissioner of Central Excise, Jaipur-I [2017 (357) E.L.T. 269 (Tri. - Del.)] involving identical set of facts, have held that the appellants therein have properly recorded the production of goods in RG-1 register and the allegation of clandestine removal have not been proved by the investigation with any independent evidence, and thus the order confirming the duty demand was set aside. The relevant paragraphs of the said order dated 20.12.2016 of the Tribunal are extracted below: "3. We have carefully considered the submissions from both the sides and perused the records. The allegation of duty evasion against the appellant company and duty demand against them is based on the documents called "incentive sheets" from 1995-96 to 1997-98 period, recovered from the residential premises of Shri M.L. Agarwal, Dy. General Manager. The submission of the appellant is that the quantity reflected in incentive sheets are further subjecte....
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....demand for duty. Once the demand for duty payable, is not sustained there is no justification to impose penalties on the appellant company as well as on connected persons." 8.7 In the present case before us, the investigation have not produced any document to state that there was clearances of goods for which the payments were received by the appellants to indicate that it was a clandestine clearance. On the other hand, the appellants have accounted all the clearances made by them (both on payment of Central Excise duty and on availment of exemption benefit) in their books of accounts, and the entire sale proceeds has been duly accounted in the financial records. The entire records relating to production/manufacture, clearances of goods having been submitted to the Department periodically, and when the impugned goods were entitled to full exemption from payment of Central Excise duty, there exist no ground for the claim of the Department that the appellants have in suppression of actual production have cleared unaccounted goods with an intent to evade payment of duty, and for confirmation of adjudged demands invoking extended period. 8.8 We find that in the case of Collector ....
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.... there can be no question of payment of duty; and if the duty has already been paid on such clearances, then the Modvat credit cannot be denied by holding that the goods are exempted. The above view also finds support in the judgement of Hon'ble High Court of Gujarat in the case of Commissioner of Central Excise & Customs, Surat-III Vs. Creative Enterprises [2009 (235) E.L.T. 785 (Guj.)], wherein it was held that if the activity of the respondent-assessee does not amount to manufacture, there can be no question of levy of duty, and if duty is levied, Modvat credit cannot be denied by holding that there is no manufacture. 9. In view of the foregoing discussions and analysis, and on the basis of the orders passed by the Tribunal, Hon'ble High Courts and Hon'ble Supreme Court, we are of the considered view that the impugned order dated 24.10.2006 in confirmation of the adjudged demands by invoking the extended period of limitation under Section 11A(2) of the Central Excise Act, 1944 read with Rule 9(2) of Central Excise Rules, 1944 and consequent imposition of penalties on the appellants is not legally sustainable. 10. In the result, the impugned order dated 24.10.2006 passed by....
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....orking hours per year at the pressure rating of the pipe and at a water temperature up to 35°C. If these working con- ditions are exceeded the next higher class of pipe that is pipe with greater wall thickness shall be chosen. With these working conditions the life expectancy of the pipe is 10 years. 5.1 The outside diameters and wall thicknesses of the pipes shall be as given in Table 1. 5.1.1 The outside diameter of a pipe shall be average of four measurements taken at 45° round the pipe. 4 MATERIAL 5.1.2 The wall thickness shall be measured with a dial vernier/ball ended micrometer. 4.1 Extrusion compounds shall be manufactured from a mixture of the following: 5.1.3 The resulting dimensions shall be expressed to the nearest 0:05 mm. a) Polyethylene, which may include copoly- mers of ethylene and higher olefins, in which the higher olefin constituent does not exceed 10 percent ( m/m ); 6 VISUAL APPEARANCE 6.1 The internal and external surface of the pipes shall be smooth, clean and free from groovings and other defects. The ends shall be cleanly cut and shall be square with axis of the pipe. Slight b) Antioxidant in an amount not exceeding 0'5 ....
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....ws. Couplers iners , of various ACHTA end caps Chapter 3 T 39 Chapter Head 3917 3921 Nos 3917.00 sasic N11 C.E No . 125/84 Ded. 26 . 5.8 3. Cellular sheets of other Plastics-plan hehe Arious kgs 3921.19 Basicl Nf1 For Expor C.F. Notification kness Sizin; Sheets of For Domestic |sale Fuscomq 32.5 .. . C. E . Notificatl C. E .: No . 101/93 ILicatLo PasIc 15% 27.12.93 4. P.D. C. Foa sheets sizes and thichness. 3920.11 kgs 3920.11 Basic Nil Por E port C.E. Notification dca 26 . 5.84 For Do pale Custos Bastel .E . Notificatic NO . 10119 . Particulars of all arcisable goods (including wholly exempted) produced, manufactured warshouted. C. E . Notificatl C. E .: No . 101/93 ILicatLo For Domestic |sale 32.5 .. . Classification Lat assification List : 2 Manufacturer's kness Sizin; Sheets of at Pool Banker-18 Phone: +41333 FORM-I (Part II) 464 proto produce - which ho Unit Come Tree of Plastic non cellular fot baal naced, supported aterial sheets of izes & various thickness 3920 kgs 3920.31 Basic Nil For E: port -E Notification C. E. Not No.125/84 Dated 26.5.84 Conta ed, manufactured war....