2024 (9) TMI 1925

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....llow Powder and 2 % Finawax C and sold as a Trading Activity from 29.09.2011 to 28.07.2012. 1.3 The Learned Commissioner while adjudicating the show cause notice has passed the impugned order holding that "Fine Crumb Rubber" is significantly different and result of process of mixing/blending of Crumb Rubber with sulphur/yellow powder and wax and the same is distinctly different from the Crumb Rubber that was procured from the market. She has, therefore, confirmed the duty demand for the period from May, 2010 to July, 2012 under Central Excise Tariff Heading 40040000 which is for " Waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom". Learned Commissioner has also applied longer limitation period and imposed equal amount of penalty under Rule 25 of Central Excise Rules, 2002 read with Section 11 AC of Central Excise Act, 1944. 2. Shri Hasit Dave, Learned Counsel appearing on behalf of the appellant submits that "Fine Crumb Rubber" is the mixture of bought out item i.e. "Fine Crumb Rubber" and Yellow powder. Around 95% of "Fine Crumb Rubber" and 5% Sulphur (yellow powder) are mixed by physical/ mechanical /process as per buyer....

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....closed /declared the entire activity including the process of mixing of sulphur was with the 95% of Crumb Rubber . Therefore, there is no suppression of fact, the entire demand is liable to be set aside on the ground of time bar also. 3. Shri R.K Agarwal, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that as per the process of mixing of brought out "Fine Crumb Rubber" with 3% to 5% of sulphur/yellow powder and 2 % Finawax C and the judgments cited by the learned counsel it prima-facie appears that the activity dos not amount to manufacture of distinct product in terms of Section 2 (f) of the Central Excise Act, 1944. In this position, we are of the view that the bonafide belief of the appellant that the activity does not amounts to manufacture cannot be doubted. 4.1 We further find that the appellant have submitted letters dates 09.02.2010, 14.10.2011 and 28.06.2012 which are scanned below:- 4.2 From the above correspondences, it is absolutely clear that the appellant have informed the department from time to t....

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....n Law wherein trading of similar raw material is restricted in the Central Excise law from the same premise. We are therefore of the view that trading activities can be done from the manufacturing premises without any permission. Hoping for your kind cooperation-in this-matter OFFICE OF THE DYJASST. COMIZIUSION. OF CENTRAL EXCISE & CUSTOMS DIVISION-IL SAMASSA For TINNA OVERSEAS LTD. Thanking you, 09 FED 2010 Yours faithfully, aOffice of the Commissioner Tinna Overseas Lahe avenw w war gek. RECEIVED Copy to: Commissioner of Central Excise, Vapi; for his kind intervention in thernega Excise & Customs 0 9 FEB 2010 Head Office : No. 6. Sultanpur. (Mandi Road), Mehrauli New Delhi - 110 030/05/ VARA Tel : (011) 3295 9599 / 9600 / 9680 Fax : (011) 2680 7073 7 Document 2 $ 103 14.10.2011 To, The Superintendent(Audit) Central Excise Silvassa Dear Sir, Ref: Your query regarding Fine Crumb Rubber We would like to submit that we are trading in Fine Crumb Rubber from our godown situated at survey no. 166/3 &4 Village Naroli Silvassa- 396 230. We are buying the Fine Crumb Rubber from open market which is exempted from excise duty in the light o....

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....product Crumb Rubber remains Crumb Rubber and it does not loose its identity. The items mixed do not react with each other on blending. The Crumb Rubber bought from the market also contains sulphur. As we wanted to start the activity at Chennai also so we asked the clarification from the Central Excise Chennai about the excise duty on Fine Crumb Rubber which verbally have been told as not liable to excise duty .Copy of following correspondence in this regard are enclosed herewith: . Our letter dtd 21.12.2010 to the Central Excise Division Chennai-C 21 Letter O.C. No.314/2010 dated 29.14 2010 from Central Excise Chennai asking for certain details/clarification 3. Our reply dated 03.01.2011 to the Central Excise Chennai $. 4./ Letter O.C. No. 36/2011 dated 01.02.2011 from Central Excise Our reply dated 10.02.2011 Sample test memo dated 08.03.2011 of Central Excise Chennai to Custom House Laboratory in respect of sample of 3 products taken from our godown at Chennai for "Crumb Rubber" ,"Fine Crumb Rubber" and "Bitumen Modfier" and our declaration regarding the sample drawn. 7./ Our letter dated 30.08.2011 requesting for the report/clarification from Central Excise....

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....our own factory at Kalamb for consumption in the manufacture of other dutiable goods which were also cleared on payment of duty from the Kalamb factory, we had adopted an Assessable Value in terms of Rule 8 of the Central Excise Valuation (Determination of price of Assesable Value of Goods) Rules, 2000. As per this Rule, we had arrived at cost of production as per CAS 4 method and then determined the Assessable Value at 110% of such cost of production. Accordingly, we had paid duty on such transferred intermediate product at correct Document 7 108 3 Assessable Value in terms of the said Rule 8. There is no short levy or short payment of duty. c) As a matter of fact, the whole exercise of payment of duty on these intermediate products transferred to our own factory at Kalamb is patently a revenue neutral exercise. For example, if we had used the said intermediate products in our factory at Silvassa, we would have not paid any duty on the intermediate products, since we would have paid the duty as per law on the final products when cleared outside factory. Thus, the Government would have received the duty only at the stage of clearance of final product. Exactly, the same....