9911796707
TMI Blog1990 (3) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... rances of dispersed organic pigment paste taken together, they exceeded the exemption limit prescribed in the Notification No. 80/80-CE. The Department, therefore, issued show cause notices proposing recovery of the duty of Rs. 67,127.45, Rs. 71,884.61, Rs. 70,628.88, Rs. 65,339.53 and Rs. 68,339.69 for the financial year 1981-82 from the respondents at Serial Nos. 1, 2, 3, 4 & 5 respectively. After considering the replies to the show cause notices and giving personal hearing to the respondents, the Additional Collector of Central Excise & Customs, Ahmedabad, vide his impugned order, dropped the show cause notices. He held that the respondents' synthetic organic dyestuff in the form of wet cake was neither fully manufactured nor it could be classified as 'goods'. Hence, he held that no excise duty could be levied on the wet cake, which was an intermediary product. He also held that the respondents had been submitting declaration to the Department every year in respect of the product and there was no element of fraud, suppression of facts or wilful misstatement on their part. The show cause notices having been issued in April, 1984 to all the respondents, the demand for duty was tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lone. (3) that even for the purposes of Rules he has not been specially authorised by the CBEC or the Collector of Central Excise, Ahmedabad under Rule 4 or 5 as the case may be, in terms of Rule 2(ii)(B)." When these appeals alongwith cross-objections and Misc. Applications came up for hearing, both sides addressed arguments on the preliminary objections raised in the Misc. Applications. The learned advocate argued that in the Central Excises & Salt Act, 1944 there was no definition of 'Collector of Central Excise'. Additional Collector of Central Excise is Collector for the purpose of Central Excise Rules. Section 35E(1) of the Central Excises & Salt Act provides that the Central Board of Excise & Customs may call for and examine the records of any proceedings in which a Collector of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. Since in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a therein all or any of the powers of a Collector under these rules; (iia) "Appellate Collector" means - (a) in relation to an order or decision of an Officer of Central Excise subordinate to the Collector of Central Excise, Bombay-I; Collector of Central Excise, Bombay-II; Collector Customs and Central Excise, Goa; Collector of Central Excise, Pune; Collector of Central Excise, Ahmedabad; (Collector of Central Excise, Baroda;) Development Commissioner, Kandla Free Trade Zone (Collector of Central Excise, Nagpur), the Appellate Collector of Central Excise, Bombay; (b) in relation to an order or decision of an officer of Central Excise subordinate to the Collector of Central Excise, Delhi; Collector of Central Excise, Jaipur; Collector of Central Excise, Chandigarh; Collector of Central Excise, Allahabad; Collector of Central Excise, Kanpur; (Collector of Central Excise, North Uttar Pradesh); Collector of Central Excise, Madhya Pradesh having his headquarters for the time being at Nagpur, the Appellate Collector of Central Excise, Delhi; (c) in relation to an order or decision of an officer of Central Excise subordinate to the Collector of Central Excise, Calcutta; Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the order as an adjudicating authority. From this point of view also, the direction given by the Board to the Additional Collector is in accordance with the provision of this Section. In the circumstances, we do not find any force in the preliminary objection raised by the learned advocate. The Misc. Applications filed by the respondents containing the preliminary objections are, therefore, dismissed. 4. The learned Departmental Representative has argued that on merits the cases are fully covered against the respondents by the judgments of Bombay High Court in the cases of (i) Sandoz India Limited v. Union of India and Others, reported in 1980 (6) E.L.T. 696 (Bom.) (paragraph 16) and (ii) Ainar Dyechem Ltd. v. Union of India and Others in Special Civil Application No. 2070 of 1963, decided on 22-11-1973 and reported in 1990 Cen-Cus 242D, and this Tribunal's decision in the case of Collector of Central Excise, Bombay v. Sandoz India Limited, reported in 1985 (21) E.L.T. 216 (Tribunal). The learned advocate has argued that the wet cake of S.O. Dyestuff is not capable of dyeing textile and hence they are not chargeable to central excise duty under Tariff Item 14D. In support of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (Calico Mills), Ahmedabad; (ii) 1987 (32) E.L.T. 451 (Raj.) = 1986 (9) ECR 113 (Rajasthan) (paragraph 9) - Union of India and Others v. Raish Plastics; (iii) 1989 (39) E.L.T. 509 (Bombay) - Union of India v. Shakti Industries Pvt. Ltd.; and (iv) Order No. 96/86-B1 dated 18-2-1986 in Appeal No./ ED/SB/T/830/80-B1 - M/s. Vidarbha Mettalica, Nagpur v. Collector of Central Excise, Nagpur. The learned advocate has further argued that the wet cake was not marketable because of moisture, impurity, non-packing and non-grading. Moisture content was 65% to 70%. He has stated that it was not a commercial grade dyestuff; S.O. Dyestuff of commercial grade is always dry and pulverised. In this connection, he has relied on the Circular letter Nos. 19/2/67-CX-VI dated 13-9-1968 and No. 100/4/75-CX-3 dated 13-4-1976. In circular dated 13-9-1968, it was stated that S.O. Dyestuff should be considered as fully manufactured when they were packed in containers for consumption and sale and should at that stage be accounted for in R.G. 1 and E.B. 4 except in case where those were to be cleared in loose condition when the packing should be taken to be packing in drums or any other similar containers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tem 14D of the Central Excise Tariff. The question arose whether the goods which were in stock on 28-2-1961, and which were blended and/or pulverised after 28-2-1961, were chargeable to excise duty under Tariff Item 14D. While deciding the issue, the Hon'ble Bombay High Court held that the goods were fully manufactured prior to 28-2-1961 and that the process of blending and/or pulverising was not necessary to complete the manufacture of S.O. Dyestuff. Drying, pulverising and blending resulted in physical change of a product. In the case of Sandoz India Ltd. v. Union of India & Others, reported in 1980 (6) E.L.T. 696 (Bombay) (supra), the Bombay High Court held that change in physical form did not amount to manufacture under Sec. 2(f) of the Central Excises & Salt Act. In that case, the formulation of Foron pigment changed its physical form from solid state to liquid state without bringing any change in its chemical composition nor did it result in any chemical reaction. The Hon'ble High Court held that the resultant article could aot be said to be a manufacture of new commodity because the Foron liquid did not cease to be Foron dyestuff or pigment even after its conversion from sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter alia, that "the process involved in the instant case after the intermediate stage referred to above formed an integral part of the manufacture of the product in question and the classification of the manufactured product for purposes of excise duty should depend upon its nature and character at its final stage of production unless a contrary intention appears from the statute. It is seen from Clause (vii) of Section 2(f) of the Act which is, no doubt, introduced subsequently that bleaching, heat setting, etc., are incidental and ancillary processes necessary for the completion of the manufactured product falling under Item No. 22." The facts are different in the present cases before us. In view of the Bombay High Court judgment referred to supra, we have already held that the manufacture of S.O. Dyestuff falling under Item 14D was already complete at the stage of wet cake of the respondents. The statute provided that S.O. Dyesluff should be charged to duty under Tariff Item 14D. Therefore, since the manufacture of S.O. Dyestuff was complete, unlike the product in dispute before the Hon'ble Supreme Court in the case of Calico Mills (Supra), it became independently excisable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebutted by the respondents with supporting materials. In the circumstances, we are unable to apply the ratio of these two judgments to the product of the respondents. For the same reason, we hold that the Board's circular dated 13-4-1976 is not relevant to the present cases. So far as the Board's circular dated 13-9-1968 is concerned, it lays down the stage at which S.O. Dyestuff should be entered in the R.G. 1 and E.B. 4 registers. In the said circular dated 13-9-1968, R.G. 1 and E.B. 4 stage has been fixed at the stage of packing. Packing is not involved in the respondents' product, which is entirely used for captive consumption. Therefore, the said instruction is also of no relevance here. 7. In view of the above discussions, we hold that respondents' wet cake was correctly chargeable to Central Excise duty under Tariff Item 14D as Synthetic Organic Dyestuff. 8. The next point argued before us relates to limitation under Section 11A of the Central Excises & Salt Act. Duty has been demanded from the respondents by the Additional Collector's order for the year 1981-82. The show cause notices demanding duty were issued in April, 1984. These are clearly outside the normal time l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judgment reported in 1989 (1) Supreme Court 417 (Judgements Today), in the case of Collector of Central Excise, Hyderabad v. M/s. Chemphar Drugs and Liniments, Hyderabad, reported in 1989 (40) E.L.T. 276 (SC) the Hon'ble Supreme Court has held that for the purpose of invoking five years' limitation under proviso to Section 11A(1) of the Central Excises and Salt Act, something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, beyond the period of six months. In the present cases, no materials have been specifically brought to our notice to indicate any positive instance of conscious or deliberate withholding of information within the knowledge of the respondents. We observe that in the cases adjudicated by the Assistant Collector of Central Excise, Division IV, Ahmedabad by his adjudication order dated 10-12-1984, show cause notices were issued to the respondents herein in December, 1981. In the present cases, the demand show cause notices were issued in April, 1984. Nothing should have prevente ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
