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TMI Blog2005 (5) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Commissioner demanded Rs. 22,16,106/- form M/s. Maheshwari under Section 11A(1), imposed and equal amount of penalty under Rule 173Q(1), read with Section 11AC, demanded interest under Section 11AB, demanded duty of Rs. 2,16,895/- from M/s. Durrent Chemicals (DCI) under the same section, imposed an equal amount of penalty, confiscated seized goods valued at Rs. 14,697/-, demanded interest under the aforesaid Section and imposed a penalty of Rs. 1 lakh on Rajesh K. Baheti under Rule 209A. 3. The facts briefly are the officers of Central Excise visited the factory premises of M/s. DCI on 5-9-97 and carried out searches. The unit was engaged in mixing micro emulsion, emulsifier etc. and produce what are known as Micro Plus, Micro X, Micro Cone etc. the raw material (Micro emulsions, emulsifier etc.) are procured from outside. The finished products are sent to M/s. Baheti a Sister Concern of M/s. DCI. The officers drew samples of the products namely Micro Plus, Micro X, Micro- Cone, EMD Cone and SWP and sent them for chemical examination. 4. The person in charge of the factory informed the officers that the products in question are used in the finishing of fabrics and are com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote Book No. A/71 wherein the manufacture of SWP is shown on page 12 onwards. He held that the appellant did not produce any evidence in support of his contention that he traded in these products. 7. In so far as eligibility to concessional rate of duty under Notifications No. 1/93-C.E. meant for SSI units the Commissioner observed that M/s. Maheshwari is not entitled to the benefit of the said notification in 93-94 as the unit was not registered with the authorities for producing the goods on which duty is now demanded. He held unless the products manufactured by an assessee are mentioned in SSI Registration Certificate, the assessee is not entitled to claim benefit of Notification No. 1/93. He however held that for the period 94-95 and 95-96 the appellants is entitled to the benefit as he has satisfied all the condition of Notification No. 1/93. 8. In regard to clearances effected by M/s. DCI the Commissioner observed that the unit is not entitled to SSI Notification No. 16/97 dated 1-4-1997 as it failed to file a declaration required to be filed by it, declaring its intention to avail of the concessional rate of duty. He held that if this mandatory requirement is not fulfill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty liability on M/s. Maheshwari did not accord SSI exemption for the year 93-94 on the ground that all the chemicals on which duty is demanded are not mentioned in the SSI Registration Certificate. Similarly he denied the benefit of exemption Notification No. 16/97 to M/s. DCI for the year 97-98 on the ground that they did not opt to pay normal duty in the beginning of the year. Further it was submitted that penalties under Section 11AC and interest under Section 11AB should not have been imposed/demanded for the period prior to 26-9-96. 14. We have carefully considered the submissions and perused the case law filed by both sides. 15. The first issue to be considered is whether or not a process of manufacture is involved. The Commissioner relies on two facts to come to the conclusion that the appellant is not merely diluting a product by adding water or mixing the product with water. The Chemical Examiner s report which says that the sample of Micro X consist of aqueous emulsion containing orgeno-silicon compound and emulsifier. So is the case of Micro plus and Micro-cone. Secondly he relies on the contents of Note Book No. 2 seized from the office premises of M/s. DCI which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory is registered with the Director of Industries/Development Commissioner (SSI) as a small scale industry it is not necessary for such SSI unit to get each and every product manufactured by it endorsed in its registration certificate in order to get the SSI exemption. In view of this position, we hold that SSI exemption cannot be denied to the appellants (M/s. Maheshwari) for the year 1993-94. 18. We observe that the Commissioner determined the duty liability on M/s. Maheshwari applicable to SSI units for the years 1994-95 onwards in accordance with the slab-wise duty. He has thus reduced the duty liability from Rs. 48,29,075/- to Rs. 22,14,106/-. The appellants contention that duty has not been determined in accordance with slab-wise rate is not borne out by facts. 19. We also observe that while calculating the duty the ex-factory price of the goods is taken into consideration and therefore does not call for any further deduction in so far as duty demanded on M/s. Maheshwari and M/s. DCI. 20. In regard to the demand on M/s. DCI we observe that the Commissioner denied benefit of Notification No. 16/97 on the ground that the unit has not exercised the option to avail the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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