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2019 (7) TMI 248 - AT - Central ExciseCaptive consumption/intermediate goods - sugar syrup -benefit of N/N. 67/1995-CE dated 16.03.1995 - Classification of the goods - It is the case of the department that the sugar syrup is marketable product and merits classification under 1702 9090 of CETA, 1985 - HELD THAT - However, on going through the said Chapter heading the sugar syrup ought to contain at least 50% by way of fructose. In the present case, though the department alleges that sugar syrup is classifiable under 1702 9090 there is no evidence adduced by the department as to what is the fructose content in the said syrup. In M/S RISHI BAKERS PVT. LTD., SHRI PRAKASH CHAND TALREJA, DIRECTOR, M/S RAMAKRISHNA BAKERS PVT. LTD., SHRI RAJIV TALREJA, DIRECTOR, M/S SWATI BISCUIT MANUFACTURING CO., SHRI OM PRAKASH SHYAMDASANI, PARTNER VERSUS CCE ST, KANPUR 2015 (4) TMI 893 - CESTAT NEW DELHI on similar set of facts the contention of the department that sugar syrup falls under heading 1702 9090 and that the said item is marketable was not accepted by the Tribunal. In the said decision, the Tribunal held that marketability of the product has been perceived by the department on the basis of marketability of invert sugar syrup. Since the department has not conducted any chemical test to arrive at the percentage of fructose content in the syrup, the contention that it merits classification under heading 1702 9090 or that it is marketable product cannot be accepted. In the present case, the department having not conducted any tests to prove the fructose content of the sugar syrup, the above decision would apply to hold that the sugar syrup manufactured by appellants is not a marketable commodity. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Marketability of the sugar syrup. 2. Classification of sugar syrup under Central Excise Tariff Act (CETA), 1985. 3. Eligibility for exemption under notification 67/1995-CE. 4. Applicability of extended period for demand and imposition of penalties. Issue-wise Detailed Analysis: 1. Marketability of the Sugar Syrup: The primary contention was whether the sugar syrup manufactured and captively consumed by the appellants was marketable. The appellants argued that the sugar syrup was not marketable as it was not capable of being stored and was consumed daily in the biscuit manufacturing process. They cited the Rishi Bakers Pvt Ltd case, which held that the department must establish the marketability of the product. The department failed to provide evidence of the sugar syrup's marketability, relying instead on a market survey from a website. The Tribunal found that the department did not conduct any chemical tests to determine the fructose content, which is essential for classifying the product under 1702 9090. Consequently, the Tribunal held that the sugar syrup was not marketable. 2. Classification of Sugar Syrup under CETA, 1985: The department classified the sugar syrup under heading 1702 9090 of CETA, 1985, which requires the product to contain at least 50% fructose. The Tribunal noted that the department did not provide any evidence of the fructose content. The Tribunal referred to the Rishi Bakers Pvt Ltd decision, which emphasized the necessity of chemical tests to determine fructose content for classification purposes. Without such evidence, the Tribunal concluded that the classification under 1702 9090 was not sustainable. 3. Eligibility for Exemption under Notification 67/1995-CE: The appellants argued that they were eligible for the exemption under notification 67/1995-CE, as they maintained separate accounts for inputs used in dutiable and exempted products and had reversed proportionate credit for exempted biscuits. The Tribunal referred to previous decisions, including Godavari Sugar Mills Ltd and GD Bakers Industries Pvt Ltd, which supported the appellant's position that the benefit of notification 67/1995-CE could not be denied if the wrongly availed credit had been reversed. The Tribunal found that the appellants had complied with the requirements and were eligible for the exemption. 4. Applicability of Extended Period for Demand and Imposition of Penalties: The appellants contended that the issue of the marketability of sugar syrup was interpretational and had been under dispute for several years, with decisions in favor of the assessee. They argued that invoking the extended period for demand and alleging suppression of facts was illegal. The Tribunal referred to the Ravi Foods Pvt Ltd case, which held that the department was aware of the appellant's manufacturing process and that the issue was interpretational. The Tribunal agreed with the appellants, concluding that the extended period for demand and the imposition of penalties were not justified. Conclusion: The Tribunal set aside the impugned order, holding that the department failed to establish the marketability and classification of the sugar syrup. The appellants were found eligible for the exemption under notification 67/1995-CE, and the demand for excise duty and penalties was dismissed. The appeal was allowed with consequential relief.
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