9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 770 - AT - Central ExciseClandestine manufacture - 30,157.280kg of Menthol Powder-in-Process and 1,36,682.750 kg of D.M.O.-in-Progress, was not accounted for, by the appellant in their ER-1 return for the month of February, 2006 nor any application for remission of duty on said quantities was filed by appellant - Held that - It clearly means that manufacture had not taken place and the process of manufacture was not completed. Therefore, there was no need to enter the same in record RG-1 nor there was any need to file ER-1 return in respect of the same. Since the duty is on manufacture and the process of manufacture had not been completed, there was no question of payment of Central Excise duty on the said quantities of the goods in progress - the question of submission of application for remission of duty did not rise - appeal allowed - decided in favor of appellant.
Issues: Liability of Central Excise duty on goods in progress
Analysis: The appeal was directed against an Order-in-Original passed by the Commissioner of Central Excise & Customs, Meerut-II. The case involved the manufacturing of Menthol and De Mentholised Oil (D.M.O.). The appellant reported a fire incident in their factory, leading to discrepancies in the quantity of goods not accounted for in their ER-1 return. A show cause notice was issued, demanding payment of Central Excise duty amounting to ?1,37,29,232 on the unaccounted quantities of Menthol and D.M.O. The Ld. Commissioner confirmed the demand and imposed a penalty, prompting the appellant to appeal to the Tribunal. Upon hearing the parties and examining the records, the Tribunal noted that the goods in question, 30,157.280 kg of Menthol Powder and 1,36,682.750 kg of D.M.O., were in process and had not reached the stage of entry into RG-1 records. As the process of manufacture was incomplete, the duty liability did not arise, and there was no requirement to file an ER-1 return or apply for remission of duty on goods in progress. Consequently, the Tribunal concluded that there was no liability for the appellant to pay the Central Excise duty amount. In light of the above findings, the Tribunal set aside the Order-in-Original, allowing the appeal in favor of the appellant. The appellant was granted consequential relief as per the law. This judgment highlights the importance of distinguishing between goods in progress and completed manufacture concerning the liability for Central Excise duty, ensuring a fair application of excise duty regulations.
|
