2001 (11) TMI 590 - AT - Central Excise

Issues:
1. Imposition of duty and penalty on the appellant for manufacturing camphor without paying due duty.
2. Classification of camphor received and repacked by the appellant.
3. Applicability of Chapter 29 for camphor manufactured into tablets by the appellant.
4. Applicability of extended period for duty demand due to failure to disclose manufacturing activities.
5. Quantification of demand and exclusion of quantities cleared without processing.
6. Claim for Modvat credit on duty paid inputs and demand calculation on cum-duty price.

1. Imposition of Duty and Penalty:
The Commissioner confirmed the demand for duty and penalty on the appellant for manufacturing camphor without paying the due duty. The appellant received camphor powder from manufacturers and repacked it into tablets, slabs, and pellets. The Commissioner imposed a penalty due to non-payment of duty.

2. Classification of Camphor:
The contention raised was that the camphor received and repacked by the appellant should be classified under a different heading than what was determined by the Commissioner. The Tribunal, in a previous decision, had classified similar camphor under Heading 2914.20. The appellant failed to provide any new material justifying a reconsideration of this classification.

3. Applicability of Chapter 29:
The appellant claimed that the camphor manufactured into tablets should be classified under Chapter 29 due to the addition of certain substances. However, the Tribunal found that the camphor remained classifiable under Chapter 29 as a separate chemical compound, even with the added substances.

4. Extended Period for Duty Demand:
The demand for duty covered a specific period, invoking a proviso due to the appellant's alleged failure to disclose manufacturing activities. The appellant argued that a letter sent to the department informed them of their activities, but the Commissioner did not address this defense properly. The matter was deemed to require further examination by the Commissioner.

5. Quantification of Demand:
Concerns were raised regarding the quantification of the demand, with allegations of errors in counting quantities and sales. The appellant disputed the calculation method and pointed out potential arithmetical errors in the duty account.

6. Modvat Credit and Demand Calculation:
The appellant claimed entitlement to Modvat credit on duty paid inputs and argued that duty should be demanded based on the cum-duty price, not the sales price. These aspects were not addressed by the Commissioner, requiring further determination upon remand.

In conclusion, the appeal was allowed, and the impugned order was set aside. The matter was remanded to the Commissioner for a fresh adjudication on the various points raised by the appellant in accordance with the law.

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