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TMI Blog2010 (1) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate, for the Appellant. Shri A. Khanna, DR, for the Respondent. [Order per : Rakesh Kumar, Member (T) (Oral)]. - The facts giving rise to these two appeals are, in brief, as under :- 1.1 As per the facts narrated in the order-in-original No. 125/2004 dated 1-7-04 passed by Deputy Commissioner, Division VII, Nehru Place, New Delhi, the Central Excise Officers of the Jurisdictional Central Excise Division visited the appellant's factory situated at X-60-62, Okhla Industrial Area, Phase-II, New Delhi on 2-7-01. Dr. Sushil Khanna, Executive Director of the appellant company, was also present in the factory at the time of the officer's visit. The appellant's factory manufactured P&P medicines chargeable to Central Excise Duty under Chapter 30 of the Central Excise Tariff Act, 1985 and they were availing the benefit of exemption under SSI exemption Notification No. 9/99-C.E., dated 28-2-99. The appellant had taken over this factory on lease since 14-9-99 and had started manufacturing operations in the factory w.e.f. October, 99 and they had declared the clearances of excisable goods from this factory for the period from 1-4-99 to 13-9-99 as nil. As per Clause (V) of para '2' of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but there were no clearances from that factory and the licence was surrendered on 22-3-2000, that earlier at plot No. X-60, X-61, X-62, Okhla Industrial Area, Phase-II, New Delhi, three units OHPL, ODPL and OLPL respectively were operating but the same in August 1999 were amalgamated with M/s. Shimal Investment and Trading Company, that after amalgamation, the plant and machinery alongwith the workers and staff of OHPL, ODPL and OLPL were taken on lease by the appellant company from M/s. Shimal Investment and Trading Company, that he was a Director in OHPL, ODPL and OLPL as well as in M/s. Shimal Investment & Trading Co., that prior to taking over of plant and machinery of OHPL, OLPL and ODPL, the appellant company had acquired the brand names of OHPL, ODPL and OLPL, that OHPL, ODPL and OLPL had surrendered their Central Excise licence, that on taking over the plant and machinery alongwith staff and workers of OHPL, ODPL and OLPL on lease, the appellant company applied for and obtained a fresh Central Excise Registration in September 1999 and commenced production of P&P medicines under the same brands as of those OHPL, ODPL and OLPL from October 1999 onwards, that the total clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-in-appeal No. 233-234/CE/D-II/2004 dated 29-10-94 upheld the Deputy Commissioner's order and dismissed both the appeals. 1.5 It is against this order that these two appeals have been filed. 2. Shri R.K. Hasija, Advocate, the learned Counsel for the appellant, made the following submissions :- (i) The appellant initially had a factory at A-110, Okhla Industrial Area, Phase-II, New Delhi for which they had Central Excise Registration and the appellant were manufacturing Ayurvedic medicine in that factory which were fully exempt from Central Excise Duty. However, due to lack of demand of their products, the appellant stopped manufacturing activity in that factory since 13-2-98 and surrendered the Central Excise Registration on 22-3-2000. However, in order to revive their business, the appellant started manufacturing activity at X-60, X-61, X-62, Okhla Industrial Area, Phase-II, New Delhi by taking over the factories at these three plots from M/s. Shimal Investment and Trading Company and they obtained a fresh Central Excise Registration on 10-9-99 for this factory. The appellant started commercial production at this new factory at X-60, X-61, X-62, Okhla Industrial Area, Phase-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their respective factories located at X-60, X-61, X-62, Okhla Industrial Area, Phase-II, New Delhi. Therefore, this is not the case where more than one manufacturer were clearing excisable goods from the same factory, as by virtue of amalgamation of OHPL, ODPL and OLPL with M/s. Shimal a new factory premises had come into existence in the premises at X-60, X-61, X-62, Okhla Industrial Area, Phase-II, New Delhi. (iii) The factories of OHPL, ODPL and OLPL were separate and distinct factories and were different from the factory of the appellant and, therefore, there is no question of clubbing the clearances of the appellant with the clearances of OHPL, ODPL and OLPL. (iv) The appellant, before commencing production, had applied for new registration with Central Excise Department and a registration certificate had been issued to them. If the factory of OHPL, ODPL and OLPL were the same as the factory of the appellant, there was no need for granting separate registration by the Central Excise Department to the appellant. (v) The Tribunal in the case of CCE, Madurai v. Ganesh Agro Pack (P) Ltd. reported in 1996 (84) E.L.T. 471 (Tribunal), wherein the facts are similar to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and OLPL had been acquired by the appellant and in view of this the, benefit of concessional rates of duty under Notification No. 9/99-C.E. has been correctly denied by invoking para 2(V) of the notification; and (iii) Since the Appellant had deliberately mis-stated the clearances of finished excisable goods for the period from 1-4-99 to 13-9-99 as 'nil', in the classification declaration filed by them, and this was done with intention to evade the payment of duty, the proviso to Section 11A(1) is attracted and, therefore, the show cause notice dated 2-9-02 for duty demand for the period from October 99 to 6-12-99 is within time and for the same reason, penalty under Section 11AC of the Central Excise Act, has been rightly imposed on the appellant company and penalty under Rule 26 of the Central Excise Rules, 2001 has been rightly imposed on Shri Sushil Khanna, Executive Director of the Appellant company. 4. We have carefully considered the submissions from both the sides and perused the records. 4.1 The undisputed facts are that - (a) the Appellant company in their factory premises at X-60, X-61, X-62, Okhla Industrial Area, Phase-II, New Delhi had started manufacture of P&P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme" prescribes concessional rate of "60% of normal rate of duty" for "first clearances upto aggregate value not exceeding Rs. 50,00,000/- made on or after 1st day of April in any financial year" and concessional rate of - "80% of normal rate of duty" for clearances upto an aggregate value not exceeding Rs. 50,00,000/- immediately following the first 50,00,000/- worth clearances in a financial year. For clearance beyond rupees one crore in a financial year, there is normal rate of duty. Para 2 of the notification specifies the conditions subject to which this exemption is available. Clause (V) of para 2 reads as under :- "when the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each serial number in the table to the notification and not separately for each factory." 4.2.1 Though the word "factory" is not defined in this notification, the same, is defined in Section 2(e) of the Central Excise Act, 1944, as "any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt, are manufactured or wherein as in any part of which, any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or after the 1st day of April in any financial year. Sixty per cent of normal rate of duty 2. Clearances upto an aggregate value not exceeding fifty lakh rupees immediately following the clearances specified against S. No. 1 above during the financial year Eighty per cent of normal rate of duty 3. All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods. Nil 2. The exemption contained in this notification shall apply only subject to the following conditions, namely - (i) a manufacturer who intends to avail the exemption under this notification shall exercise his option in writing for availing the exemption under this notification before effecting the first clearances of specified goods and such option shall be effective from the date of exercise of the option which shall not be withdrawn during the remaining part of the financial year. (ii) while exercising the option under condition (i), the manufacturer shall inform in writing to the jurisdictional Assistant Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssional rate of duty of five per cent ad valorem on clearances having an aggregate value of rupees twenty lakhs under the same notification, when he opts to avail this exemption. He is entitled under this notification to additional clearances of an aggregate value of rupees thirty lakhs at the concessional rate of 80% of normal duty. (iv) where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table, and not separately for each factory; (v) where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer; (vi) the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, has not exceeded rupees three hundred lakhs in the preceding financial year." From reading of this notification, it is clear that an SSI unit availing Modvat scheme is eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y carried on," The factory of the appellant consists of the plant and machinery installed at the plot X-60, X-61, X-62, Okhla Industrial Area, Phase-II and for the entire plant and machinery at these three plots there is a common registration. Prior to taking over of this factory by the appellant, the plant and machinery at X-60, X-61, X-62 were under the control of OHPL, ODPL and OLPL. Since the earlier factories of OHPL, ODPL and OLPL at plot No. X-60, X-61, X-62 respectively are now part of the factory premises of the appellant manufacturer, clearances of the specified goods during April 1999 to September 1999 period from their respective factory premises at X-60, X-61, X-62 have to be treated as the clearances from the factory of the appellant. Since OHPL, ODPL and OLPL during the period from April 1999 to September 1999 had made clearances of specified goods from their respective factory premises which are now part of the factory premises of the appellant, the clearances of the appellant from September/October 1999 onwards have to be clubbed with the clearances of OHPL, ODPL and OLPL during April 1999 to September 1999 period for determining the eligibility of the appellant fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Address of the Unit Value of clearances of excisable goods (in Rs.) Period 1. M/s. Oscar Health Care Pvt. Ltd. X-60, Okhla Industrial Area, Phase-II, New Delhi 6,65,11,692/- 1-4-99 to 31-8-99 2. M/s. Oscar Laboratories Pvt. Ltd. X-62, Okhla Industrial Area, Phase-II, New Delhi 75,70,004/- 1-4-99 to 31-8-99 3. M/s. Oscar Drugs Pvt. Ltd., X-61, Okhla Industrial Area, Phase-II, New Delhi - - - - 1-4-99 to 31-8-99 Total 7,40,81,698/- The figures as mentioned above were also corroborated by the production & dispatch details submitted by the party in respect of the units mentioned at Sl. No. 1 to 3 above. 4. Whereas, all the above mentioned three units were registered with Central Excise Department for the manufacture of P&P medicines and surrendered their Central Excise Registration Certificates in September, 1999." 6.1 The para 3 & 4 of the show cause notice show that the Department, from the very beginning was aware of the fact that during April 1999 to 13-9-99 period, from the same premises i.e. X-60, X-61, X-62, Okhla Industrial Area, Phase-II, New Delhi, three predecessor units OHPL, ODPL and OLPL had made clearances of specified goods and the value of thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inaction or failure on the part of manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required, before it is saddled with any liability, invoking longer limitation period. In the present case, even if, it is assumed that the appellant were aware of the manufacturing and clearance of specified goods during April 1999 to 13-9-99 period by OHPL, ODPL and OLPL, from the show cause notice itself it is very much clear that the department was also equally aware and also had in its record the precise figures regarding the value of clearances made by the predecessor units during April 1999 to 13-9-99 period, but still when the classification declaration claiming the exemption was under Notification No. 9/99-C.E. was made by the appellant, no objection was raised. There is no allegation of collusion between the Departmental officers and the appellant. In view of these circumstances, we are of the view that circumstances do not justify invoking a longer limitation period under proviso to Section 11A(1) and therefore the duty demand raised by the show cause notice dated 2-9-02 for the period from 15-10-99 to 16-12-99 has to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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