9911796707
TMI Blog1994 (3) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... e leviable thereon, such quantities of pasteurised butter, falling under item No. 1-C of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), as are used for regeneration of liquid milk within the premises of the same factory of production, or in a factory elsewhere than in the factory of production : Provided that where such use is elsewhere than in the factory of production, the exemption shall be allowable, if - (i) It is proved to the satisfaction of the Collector of Central Excise that such pasteurised butter is intended for use for the regeneration of liquid milk; and (ii) the procedure set out in Chapter X of the Central Excise Rules, 1944 is followed." 3. M/s. Kwality Ice Creams (Pvt.) Limited (The respondents), obtained L-6 Licence under Chapter X of the rules for the manufacture of regenerated liquid milk from pasteurised butter and availed of the exemption under Notification No. 247/77-C.E., dated 23-7-1977. The pasteurised butter so received was, however, used for the manufacture of ice creams. 4. The process of manufacture as given by the respondents is that skimmed milk powder is regenerated in the liquid form by dissolving the same in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the continuous process of manufacture of `Ice-cream . The Notification No. 247/77-C.E., dated 23-7-1977 has not extended the benefit of exemption for such use of the `Pasteurised Butter . (4) In this connection Notification No. 38/78-C.E., dated 1-3-1978 can be cited. Although this Notification has been issued allowing exemption in respect of Skimmed Milk Powder which falls under a different tariff item but the purposes of the benefit are identical as that under the Notification No. 247/77-C.E., dated 23-7-1977. The Hon ble High Court of Gujarat in the case of M/s. Vadilal Dairy Frozen Food Industries, Ahmedabad v. Union of India and Ors. [1983 (12) E.L.T. 672] held that `Skimmed Milk Powder which is not utilised in the regeneration of liquid milk will not be eligible for exemption under Notification No. 38/78-C.E., dated 1-3-1978 if such `Skimmed Milk Powder is used in the Manufacture of Ice-cream irrespective of the fact whether at the intermediate stage such `Skimmed Milk Powder is made into Milk or not. This order is relied upon in the matter of decision in the instant case. (5) Keeping in view that what is stated above it is clear that the said Company brought the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (3) Collector, Central Excise v. Madras Radiators and Pressing Ltd. - 1994 (69) E.L.T. 409 = 1988 (15) E.C.C. T-15 - removal of goods free of duty under Chapter X, - buyer - manufacturer not accounting for goods in prescribed manner - duty liability on buyer - manufacturer, not on seller, Section 11A has no application to seller in such case. (4) Bajaj Auto Ltd. v. Collector, Central Excise - 1987 (31) E.L.T. 970 (Tribunal) - clearances under exemption - scope of Rule 196 - buyer also answerable for duty where exemption wrongly availed of by manufacturer - relevant date immaterial under Rule 196 of the Rules. (5) Bajaj Tempo Ltd. v. Collector, Central Excise - 1984 (17) E.L.T. 205 (Tribunal) - no limitation under Rule 196 of the Rules for breach of the Rules - interpretation of Chapter X procedure. (6) Collector, Central Excise v. Amber Paints - 1985 (22) E.L.T. 297 (Tribunal) - demand not circumscribed by any limitation when made under Rule 196. 14. Sh. Lachman Dev, the learned Consultant submitted that the demand was hit by the limitation. 15. He pleaded that in the show cause notice extended period of limitation has been invoked while there was no allegation regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93. The Tribunal held in that case that the respondents were not eligible for exemption under Notification No. 38/78-C.E., for the skimmed milk powder which is ultimately used in the products such as Horlicks, and the exemption thereunder was applicable only where the skimmed milk was regenerated into liquid milk, as such. 22. As regards the point of limitation we find that the respondents had not declared correctly the process of manufacture of ice-creams. They started with the pasteurised butter and ended with its dissolution in water. They did not declare that this dissolution in water was for the purpose of manufacturing ice-creams. 23. The period involved in the case is from March 1980 to May, 1984 and the show cause notice was issued on 25-5-1984. In the show cause notice, the provisions of Section 11A of the Central Excises and Salt Act, 1944 (hereinafter referred to as the `Act ) were invoked. Their L-6 licence was for the manufacture of regenerated liquid milk from pasteurised butter while they used the pasteurised butter for manufacture of ice-creams. As per CT-2 certificate the licencee was authorised to obtain pasteurised butter for the manufacture of liquid regener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed and the impugned order is set aside. 31. [Contra per : S.L. Peeran, Member (J)]. - I agree with the findings given by my ld. brother, in so far as merit of the case is concerned. As regards the question of extending the larger period is concerned, I beg to disagree with my ld. brother s finding on account of the following reasons. 32. The Asstt. Collector has confirmed the duty under Rule 196 read with Section 11A of the Central Excises Salt Act, 1944. The assessee denied the plea of mis-statement or suppression on the ground that the pasteurised butter has been and still used by them for the regeneration of liquid milk which is a continuous process, in the manufacture of Ice Cream. It is their plea that this process is in existence since 1978 and the department is fully aware of their process of manufacture. That the benefit had been granted after proper verification and hence Rule 196 is not attracted. The ld. Asstt. Collector had not addressed himself on this plea. The ld. Collector has examined this issue and has held as follows : * * * * * * * 33. The Ld. Consultant referred to L-6 and C.T.-2 certificate and argued that the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jja Ram) Member (T) 36. [Order per : K.S. Venkataramani, Member (T)]. - Addressing arguments on the point of difference learned Senior Departmental Representative Smt. J.M.S. Sundaram contended that the demand in this case under Rule 196 is valid since the respondents had taken the exemption without in fact being entitled thereto. The learned Senior Departmental Representative urged that the facts of the present case differ from those of Arti Paints Chemicals Industries, Bombay and that of Rajasthan Navsagar Chemical Works, Dhule (Supra) because here the L-6 licence had been granted by the Department to the respondents on the basis of their own declaration claiming the exemption and it was not a case where the Department had erroneously granted it to an ineligible assessee. The learned Consultant Shri Lachman Dev for the respondents argued that they cannot be charged with suppression of facts as they had disclosed all the relevant particulars regarding the manufacturing process and the finished products in their application for L-6 licence. They had also maintained the R.G.-16 accounts prescribed for the purpose which had been checked from time to time by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
