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TMI Blog1997 (5) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the officers found that the assessees neither filed a classification list nor claimed any exemption for the manufacturer of plaster of paris moulds manufactured and utilised in the factory of production for manufacture of ceramic products, including the process of manufacture of ceramic products and plaster of paris moulds. It was also alleged that exemption under Notification No. 217/86-C.E., dated 2-9-1986 is available to excisable goods if manufactured and used within the factory of production, in the manufacture of finished goods; except the following namely, machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substances in or in relation to the manufacture of the final products. It was alleged that in the instant case, the plaster of paris moulds are used for shaping the sanitaryware. The plaster of paris moulds are filled with slip for obtaining the required shape of the ceramic products. The moulds remain unchanged. It was alleged that in other words, the plaster of paris mould is only an apparatus or equipment for setting the sanitaryware to the required shape and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the moulds carry out the specific function of giving a final shape and size to the various manufactured products and hence they are in the nature of apparatus, tools or appliances and included in the ambit of Notification No. 217/86. The Collector referred to the Notification No. 221/86, dated 2-4-1986 as amended by Notification No. 267/86, dated 24-4-1986 which exempts certain specified inputs and wherein at Sl. No. 5 of the table of the Notification plaster of paris moulds had been specified as inputs eligible for exemption, if these are used within the production in the manufacture of ceramic products. He has held that the said input namely, plaster of paris moulds were omitted from the table of specified inputs annexed to Notification No. 221/86. Therefore, in that view of the matter, plaster of paris moulds manufactured and used in the final products in the factory of production are exempted from the whole of the duty of excise leviable thereon during the period from 24-4-1986 to 28-2-1987. However, for the period 1-3-1986 to 23-4-1986 and from 1-3-1987 to 31-3-1988, they are liable to pay duty when utilised in the factory of production in view of the fact that they were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c products. In the process of manufacture employed by the manufacturers, plaster of paris moulds are not the final product. They are not cleared outside the factory. If they are cleared outside the factory, only then the question whether they are to be treated as final products for the purpose of Notification No. 217/86 arise. The Tribunal observed that the appellants contention that plaster of paris moulds are not goods for the purpose of excise levy would then need be considered. The Tribunal observed that such was not the case. Even presuming that plaster of paris moulds are goods falling under Chapter 68 of the Schedule, the Tribunal observed, that it does not see any reason, why the benefit of Notification No. 217/86 cannot be extended to plaster of paris used in the manufacture of plaster of paris moulds, which are used in relation to the manufacture of ceramic products. Therefore, the Tribunal took the view that the first proviso to the notification would come into operation only if plaster of paris moulds are sought to be cleared from the factory as final product and, then again, only if they are exempted from duty in terms of any notification in force. In para 13, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured by them namely, sanitaryware. In such circumstances, we are of the view that all the facts were within the ambit and knowledge of the department as can be seen from the manufacturing process which is in Annexure 3 at page 5 of the paper book and the ground plans which are annexed to the paper book. It therefore, cannot be stated that there was a deliberate suppression of any material facts from the department and that there has been clandestine removal of the goods to attract proviso to Section 11 of the Central Excises and Salt Act, 1944. It is also seen that the appellants have taken a stand that they held a bona fide belief that intermediate goods namely, plaster of paris moulds were not goods, hence they had not disclosed about the same in the classification list, although the details of the plaster of paris moulds and the process of manufacture had been disclosed to the department. There is a force in this submission. The Hon ble Supreme Court in number of judgments have held that the burden of proof is on the department to show that there has been a deliberate suppression of material facts to evade duty and it is for the department to show that there had been cland ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the table of specified inputs annexed to Notification No. 221/86 vide Notification No. 89/87-C.E., dated 1-3-1987 and on that ground has confirmed the demands. The appellants have claimed the Modvat credit which has also been rejected by the Collector on the ground that they are inputs used in the manufacture of final products. As the Tribunal has taken a view that they have to be treated as input for the manufacture of sanitaryware, it follows that the benefit of Modvat credit cannot be denied in terms of the judgment rendered by the Tribunal in the case of Hindustan Sanitaryware Industries Ltd. 12. The learned DR relied on the judgment rendered in the case of W.S. Industries (India) Ltd. (supra), wherein it has been held that plaster of paris moulds used in the manufacture of ceramic insulators have been held to be tools or appliances for bringing about a change in clay and not an inputs and the benefit of Modvat credit has been denied. As can be seen the item plaster of paris moulds has been used in the manufacture of ceramic, which are different from the sanitaryware. As the Tribunal in the case of Hindustan Sanitaryware Industries Ltd. has held the item in question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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