9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (11) TMI 789 - AT - Central ExciseConcessional rate of duty - manufacture of Gold Dore Bars having purity less than 95% - Admissibility of the benefit of exemption under Sl. No.189 of the Notification No. 12/2012CE dated 17.03.2012 - HELD THAT - We find that the Learned Commissioner, while analysing the dictionary/popular meaning of Gold Bar and applying common parlance test to it, has categorically made an observation that the claim of the appellant that Gold Bar includes Gold Dore Bar cannot be accepted since there is a marked difference between Gold Bar and Gold Dore Bar , when the meaning of Gold Dore Bar set out in the Explanation to the said exemption Notification No.12/2012-CE dated 17.03.2012 is considered. Rejecting the contention of the appellant that if the gold bar be understood as having purity content of more than 95%, it amounts to introducing a new condition under the said Notification, the learned Commissioner has observed that since the percentage of gold has been specifically prescribed to understand Gold Dore Bar , then meaning of gold bar be considered as the one other than Gold Dore Bar being a distinct products in the trade parlance. Argument of the appellant that even though the final product cleared from their factory is Gold Dore Bar having purity less than 95%, which are manufactured from gold ore/concentrate be considered as Gold Bar , in absence of a definition of Gold Bar , in the exemption Notification, in our view, cannot be accepted. On the contrary, we find there is merit in the reasoning of the Ld. Commissioner that once the Gold Dore Bar is given a meaning in the Explanation to the Notification being considered as raw material/input for the manufacture of gold bar , the said meaning cannot be ignored while understanding the meaning of Gold Bar even though both the items are classifiable under Chapter 71 of the CETA, 1985. The Gold Bars which are manufactured out of Gold Dore Bars having purity less than 95% cannot be equated with Gold Dore Bars . Thus, the argument of the Appellant that Gold Bars (i.e., Gold Dore Bar) manufactured from gold ore or concentrate as mentioned at Clause (a) of Sl. No.189 of the said Notification No.12/2012-CE dated 17.03.2012, cannot be acceptable for more than one reason. The final product emerged out of the process of manufacture narrated as above, is Gold Dore Bar having purity of 87% to 92% and not Gold Bar and the said Gold Dore Bar is cleared to refineries to make Gold Bar having purity of 999.99%. The argument of common parlance understanding of the 22-carat and 24-carat purity bar as Gold Bar only, in our view, not relevant to the present circumstances of the case to extend the benefit of Notification. If it is the intention of the Legislature to treat both Gold Bar and Gold Dore Bar as one and the same, then there is no necessity to mention both the expressions in the same exemption Notification, one as raw material and the other one as the as final product . The principles for interpretation of an exemption Notification have been laid down in Dilip Kumar and Company 2018 (7) TMI 1826 - SUPREME COURT . Thus even if in common parlance purity may not be the criterion to use the expression Gold Bar , however, for the purpose of Notification No.12/2012-CE dated 17.03.2012, Gold Bar and Gold Dore Bar are two different commodities. Invoking extended period of limitation - We find that a proceeding was earlier initiated against the appellant in the year 2010. Analysing the process of manufacture and the final product manufactured and cleared from the factory at NIL rate of duty, claiming exemption under Notification No.5/2006-CE dated 01.03.2006, show-cause notice was issued to the appellant on 07.02.2012 demanding duty with interest denying the benefit of Notification No.5/2006-CE dated 01.03.2006. As a Government Policy, the Notifications are amended from time to time and the exemptions are provided depending on the process, source of inputs, resultant product, etc. The appellant consequent to the amendment to the Notification No.5/2006-CE dated 01.03.2006 discharged duty on clearance of Gold Dore Bar by availing concession as specified under Notification No.25/2011-CE dated 24.03.2011. Subsequently, also they commenced discharging duty by availing the exemption Notification No.2/2012-CE dated 16.01.2012 and Notification No.12/2012-CE dated 17.03.2012 from time to time. Also, they have filed periodical ER-1 Returns with the department indicating clearance of the Gold Dore Bar mentioned as Gold Bar claiming exemption available to them from time to time. In the said circumstances, the second show-cause notice issued to the appellant on 05.08.2017 invoking extended period, in our opinion, cannot stand the scrutiny of the law as there has been no change in the process of manufacture, marketing/sale of the final product i.e., Gold Dore Bar except availment of benefit of Notification issued from time to time. Thus, there is no mis-declaration nor suppression of facts with intent to evade payment. However, the appellants are required to discharge differential duty at the appropriate rate, if any, payable for the normal period of limitation, as benefit of Sl. No.189 of the Notification No.12/2012 dated 17.03.2012 as amended, being not admissible to the appellant. Since the issue relates to interpretation of law and there is no suppression of facts, we do not find justification in imposing penalty under Section 11AC of the Central Excise Act, 1944 on the appellant as held in the impugned order. Appeal is partially allowed upholding the demand of duty with interest for normal period and setting aside penalty imposed on the appellant. Consequently, the matter is remanded to the adjudicating authority for determination of differential duty and interest for the normal period of limitation. Appeal disposed of accordingly.
Issues Involved:
1. Entitlement to concessional rate of duty under Sl. No.189 of Notification No.12/2012-CE for 'Gold Dore Bars' with purity less than 95%. 2. Whether the demand is partially barred by limitation. 3. Imposition of penalty on the appellant. Issue-wise Detailed Analysis: 1. Entitlement to Concessional Rate of Duty: The primary issue was whether the appellants were entitled to a concessional rate of duty under Sl. No.189 of Notification No.12/2012-CE dated 17.03.2012 for 'Gold Dore Bars' having purity less than 95%. The appellants argued that there is no significant difference between 'Gold Bars' and 'Gold Dore Bars' manufactured by them, asserting that their product met all the conditions prescribed under the said notification, including being engraved with a serial number and weight in metric units. They contended that the manufactured 'Gold Dore Bars' had a gold content of 87-92%, thus qualifying for the exemption. The appellants also argued that in common parlance, 'Gold Bar' and 'Gold Dore Bar' are considered the same, and the notification did not define 'Gold Bar', necessitating a common parlance interpretation. The Revenue, however, maintained that 'Gold Dore Bars' are semi-pure alloys requiring further refining to become 'Gold Bars'. The Commissioner found that the appellants' product was indeed 'Gold Dore Bars', not 'Gold Bars', as per trade parlance and dictionary definitions, which describe 'Gold Bars' as having higher purity. The Commissioner concluded that the exemption could not be applied to 'Gold Dore Bars' as they did not meet the purity criteria implied for 'Gold Bars' under the notification. The Tribunal upheld the Commissioner's view, noting that the appellants had previously claimed their product as 'Gold Dore Bars' in earlier proceedings and could not now claim them as 'Gold Bars'. The Tribunal emphasized that the exemption notification must be interpreted strictly, and the burden was on the appellants to prove their entitlement to the exemption, which they failed to do. 2. Limitation: The appellants argued that the demand for the period prior to August 2015 was barred by limitation, asserting that they had regularly filed ER-1 returns and that there was no suppression of facts. They contended that the department was aware of the facts due to previous investigations and that invoking the extended period of limitation was unjustified. The Tribunal agreed with the appellants, noting that the department had prior knowledge of the appellants' manufacturing process and product classification from earlier proceedings. The Tribunal found that there was no change in the manufacturing process or product marketing, and the appellants had consistently availed of exemptions as per the prevailing notifications. Consequently, the Tribunal held that the extended period of limitation could not be invoked, and the demand was limited to the normal period of limitation. 3. Imposition of Penalty: Regarding the penalty, the appellants argued that the demand of interest and penalty could not be sustained as there was no suppression of facts or intent to evade duty. The Tribunal concurred, stating that the issue involved was one of legal interpretation rather than factual suppression. It found no justification for imposing a penalty under Section 11AC of the Central Excise Act, 1944. Conclusion: The Tribunal modified the impugned order, upholding the demand of duty with interest for the normal period of limitation while setting aside the penalty imposed on the appellants. The matter was remanded to the adjudicating authority for determination of differential duty and interest for the normal period. The appeal was partially allowed.
|
