2006 (3) TMI 679 - Commission - Central Excise

Rock wool - Slag wools, rock wool and mineral wools are similar, but have different identification

Issues Involved:
1. Eligibility of products for exemption under Notification No. 59/90-CE and Notification No. 60/91-CE.
2. Duty liability for the period from 17-3-1990 to 24-7-1991 and from 25-7-1991 to 28-2-1993.
3. Classification of the manufactured product (Rockwool vs. Mineral Wool).
4. Immunity from interest, penalties, and prosecution under the Central Excise Act, 1944.

Detailed Analysis:

1. Eligibility of Products for Exemption:
The applicants, M/s. Rockwool (India) Limited (RIL), claimed exemptions under Notification No. 59/90-CE and Notification No. 60/91-CE for their products classified under Chapter 68.03 of CET. The Department challenged this claim based on the Chemical Examiner's report, which indicated that the fly ash content in the products did not meet the required 25%. The Commissioner (Appeals) and CEGAT remanded the case multiple times, ultimately leading to the present settlement application.

2. Duty Liability:
The Show Cause Notice (SCN) demanded a total duty of Rs. 1,35,93,327/- from RIL, with specific amounts for different periods:
- Rs. 42,30,196/- for 17-3-1990 to 24-7-1991.
- Rs. 93,63,131/- for 25-7-1991 to 28-2-1993.
RIL admitted an additional duty liability of Rs. 81,11,962/- for the period 25-7-1991 to 28-2-1993, recalculated by considering the sale price as cum-duty price. They paid the difference in two installments as directed by the Admission Order.

3. Classification of the Manufactured Product:
The primary contention was whether the product manufactured by RIL was 'Rockwool' or 'Mineral Wool'. The Advocate for RIL argued that Rockwool and Mineral Wool are synonymous, supported by definitions from the Mc Graw Hill Technical Dictionary. The Revenue, however, relied on the 'Materials Handbook' to argue that these are distinct products. The Bench noted that the product was commercially understood as Rockwool, as evidenced by industrial licenses and purchase orders from various entities.

4. Immunity from Interest, Penalties, and Prosecution:
RIL sought full immunity from interest, penalties, and prosecution under all Central Acts, including the Income Tax Act, 1961. The Bench observed that interest was not chargeable as the period in question was before the provision for interest was included in the Central Excise Act. Immunity from penalties and confiscation was granted under the Central Excise Act, 1944. However, immunity from prosecution was not considered as the proceedings were already complete.

Conclusion:
The Bench settled the proceedings with the following terms:
- The additional duty liability was settled at Rs. 81,11,962.54, which had already been paid.
- Immunity was granted from penalty and confiscation under the Central Excise Act, 1944.
The settlement is subject to the provisions of Section 32K of the Central Excise Act, 1944, and will be void if obtained by fraud or misrepresentation.

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