9911796707
TMI Blog2002 (2) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... and M/s. Pragati Metals (P) Ltd., submitted that the Appellants manufacture stainless steel utensils which are exempted from payment of duty under Notification No. 4/97-C.E., dated 1-3-1997; that the duty paid S.S. Flats purchased from market are cut into small pieces which are hot rolled which are chargeable to nil rate of duty; that after annealing/ pickling, these hot rolled pieces are subjected to cold-rolling; that then these are cut into circles in untrimmed condition which are trimmed subsequently, trimmed circles are sold on payment of duty and are also used for captive consumption in the manufacture of utensils; that there is nil duty in respect of trimmed circles used for captive consumption as per sub-heading 7220.50 of the Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GAT)]. He also mentioned that there was no suppression of any facts and extended period is not attracted as they held bona fide belief that process of cold rolling does not amount to manufacture. 3. Shri R. Santhanam, learned Advocate, appearing on behalf of M/s. P.R. Industries, submitted, in addition to the arguments advanced by Shri J.S. Agarwal, learned Advocate, that the demand of excise duty made from the Apellants is for the period from 1-3-1997 to 31-3-1998 whereas the show cause notice was issued on 11-7-2000 and accordingly the entire demand is hit by time limit as the proviso to Section 11A(1) of the Central Excise Act is not applicable; that the Appellants entertained a bona fide belief that the process of cold rolling does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture; that in Sagar Industries case, it was held that Patti and Pattas of steel are liable to duty. He, further, submitted that the bona fide belief claimed by them is not backed by any basis; that they were availing of Modvat credit and paying duty; that captive use was not disclosed by them to the Department and as such use of patti-pattas captively was not in the knowledge of the Department. In reply Shri J.S. Agarwal, learned Advocate, mentioned that for the Appellants the final product was circles which were cleared by them on payment of duty and accordingly they had taken the Modvat Credit of the duty paid on S.S. flats purchased from the market; that Department was aware of the fact of the payment of duty as the same was accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to manufacture of a new excisable commodity. No such evidence, in our view, has also been adduced in the present matters so as to give rise to duty liability. As observed earlier, the Appellants are first getting the hot rolled products out of SS flats purchased from the market and this has not been rebutted by the Department. In Sagar Industries case, (supra), the Tribunal only observed that removal of cold rolled pattas/patties for manufacture of circle shall amount to removal of goods for the purpose of payment of duty of excise. However, the Tribunal further observed that the question whether the process of cold rolling of the hot rolled products amounts to manufacture has not been considered by both the lower authorities. The Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty payable. In view of the various decisions of Supreme Court and the Appellate Tribunal, it cannot be claimed that there was suppression of any fact by the Appellants and larger period of limitation is not invokable. In the facts and circumstances of the case we are of the view that no penalty is imposable on the Appellants and set aside the same. Thus we allow all the three appeals and remand the matter to the Adjudicating Authority to determine as to whether the process of cold rolling of hot rolled products amount to manufacture and if such process is held to amounting to manufacture and if any duty is payable, the duty already paid is to be adjusted against such duty payable. All the three appeals are disposed of in these terms. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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