2018 (7) TMI 1275 - AT - Central Excise

Principles of Natural Justice - Captive Consumption - benefit of N/N. 67/95-CE dated 16.03.1995 - Paperboard Dibbis/Boxes manufactured by the appellant and consumed captively in packing the Aggarbatties - Extended period of limitation - Held that - Even though the adjudicating authority had fixed various dates of hearings and as such cannot be faulted upon, but the fact remains that the appellants were not heard in person. As such the impugned order can be held to be suffering from violations of principles of natural justice. The detailed process of manufacture, now being canvassed before us by the appellant was not placed before the adjudicating authority and as such his comments are not available - the captive consumption N/N. 67/95-CE is available to an assessee if the obligation in terms of Rule 6 stands discharged by the assessee. As per requirement of said Rule 6, no Cenvat credit is available to the manufacturing unit. The said fact requires verification - The applicability of the ratio of the said two decisions as mentioned i.e., Ambuja Cement Ltd. v. Commissioner of C.Ex., Chandigarh 2015 (11) TMI 1413 - SUPREME COURT and Funskool (India) Ltd. v. Commissioner of C.Ex. & Cus., Goa 2016 (12) TMI 1267 - CESTAT MUMBAI is required to be considered by the adjudicating authority, in the facts and circumstances of the case, for which matter is required to be remanded. Appeal allowed by way of remand.

Summary

Issues involved:
Classification of Paperboard Dibbis/Boxes for Aggarbatties packing and availability of Notification No.67/95-CE dated 16.03.1995 for duty exemption.

Analysis:
The appellant, engaged in manufacturing Aggarbatties packed in Printed Duplex Boxes/Dibbies, faced a dispute regarding the duty liability on the Paperboard Dibbis/Boxes used for packing Aggarbatties. The lower authorities held that the captive consumption notification would not apply, leading to demands, interest, and penalties. The appellant argued that the boxes emerged during the integrated packing process and were not manufactured separately. They claimed eligibility for duty exemption under Notification No.67/95-CE, citing the law laid down by the Apex Court and previous tribunal decisions. The appellant contended that the boxes should be classified together with Agarbati under Chapter Heading 3307, attracting nil rate of duty. They also challenged the demand on the grounds of limitation, citing various court decisions.

The Tribunal noted that the impugned order was passed without hearing the appellant in person, violating principles of natural justice. The detailed manufacturing process and relevant legal precedents were not presented before the adjudicating authority. The Tribunal emphasized the need to verify compliance with Rule 6 for duty exemption and remanded the matter for further consideration. The adjudicating authority was directed to reevaluate the appellant's arguments on limitation in light of precedent decisions, leaving all issues open for the appellant to raise before the authority.

In conclusion, the Tribunal disposed of all appeals by remanding the matter for a fresh decision, emphasizing the need for a thorough examination of the appellant's contentions, compliance with Rule 6, and considerations of limitation based on legal precedents.