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TMI Blog2010 (1) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri B.L. Narsimhan, Advocate, for the Appellant. Shri Virender Chaudhary, DR, for the Respondent. [Order per : Rakesh Kumar, Member (T) (Oral)]. - The facts leading to this appeal are, in brief, as under : 1.1 The Appellants manufacture asbestos cement corrugated sheets chargeable to Central Excise Duty under heading 6804.10 and other asbestos cement products chargeable to duty under heading 6804.20 and 6840.90 of the Central Excise Tariff. As per the facts narrated in the show cause notice dated 22-1-98 issued to the appellants, during the period from Nov.' 92 to June' 94, they applied for remission of duty on unmarketable asbestos cement products totally weighing 37.444 MTs., which was allowed and, thereafter, those asbestos cement products were destroyed under the supervision of the jurisdictional Central Excise Officers. The small pieces of the asbestos cement products, destroyed under Central Excise Supervision and in respect of which remission of duty had been granted, were subsequently sent under job work challans to job workers for grinding the same into powder and the powder called Hard Ground Powder (HGP)/Hard Ground Waste was returned to the appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11AC but set aside the penalty under Section 173Q(1) on the ground that when penalty under Section 11AC is imposed, there was no necessity to impose separate penalty under Rule 173Q(1) of Central Excise Rules. In this order, the Commissioner (Appeals), on the Revenue's appeal against the Dy. Commissioner's order-in-original dated 23-9-98, also ordered the charging of interest under Section 11AB on the duty demand confirmed under Section 11A(1). It is against this order of the Commissioner (Appeals) that the present appeal has been filed by the appellant. 2. Heard both the sides. 2.1 Shri B.L. Narsimhan, Advocate, the learned Counsel for the appellants, made the following submissions : (1) HGP is nothing but finely ground pieces of the asbestos cement products, which being not marketable, had been destroyed. Prior to 1995, this grinding was being out sourced through job workers, but since 1995, this grinding is being done in house. The Department seeks to classify HGP under heading 68.05 as "mixtures with a basis of asbestos or with a basis of asbestos and magnesium carbonate". The HGP is not a mixture with a basis of asbestos or with a basis of asbestos and magnesium ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty in their classification declaration, which, after verification, had been approved by the Department. Besides this, the issue as to whether grinding of asbestos cement products broken pieces into powder would attract Central Excise duty, had been decided by the Addl. Commissioner vide order-in-original No. 39/68/69/SEC11-A/Addl. Collr. dated 21-3-98 by which the Additional Collector had dropped the proceedings. In view of these circumstances, there is no justification for alleging suppression of facts with intent to evade payment of duty and invoke extended period under proviso to Section 11A(1). 2.2 Shri Virender Chaudhary, the learned DR, defending the impugned order and reiterating the Commissioner (Appeals)'s findings, made the following submissions: (1) The product, in question, is a powder made by grinding the pieces of broken asbestos cement products. It is correctly classifiable under sub-heading 6805.90 as mixtures with a basis of asbestos. (2) The very fact that the product, in question, is sold by the appellants, shows that it is marketable and since it is marketable and the same is covered under sub-heading 6805.90, it would attract Central Excise Duty. (3) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g etc. or for use as filtering, insulating, packing etc. materials), crude asbestos fibres or those simply graded according to length; beaten or cleaned are excluded (heading 25.24). This heading also includes mixtures of asbestos with magnesium carbonate, cellulose fibres, sawdust, pumice stone, talc, plaster, siliceous fossil earths, slag, aluminium oxide, glass fibres, cork, etc., used as packing for heat-insulation purposes, or as filtering material, or as a basis for moulding asbestos articles". 4.1.1 From the above explanatory notes to HSN heading 68.12, corresponding to heading 68.05 of Central Excise Tariff, it will be seen that the mixtures referred to in this heading are the mixtures of asbestos with magnesium carbonate, talc, pumice stone, cellulose fibres etc. for use as - (a) packing for heat insulation purpose or (b) filtering purpose or (c) basis for moulding asbestos articles. The words - "articles of such mixtures or of asbestos" in this heading indicate that one of the uses of the mixtures covered by this heading is fabricating various articles from it. 4.2 In this case, the HGP is a powder obtained by grinding of broken pieces of asbestos cement products. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jan.'98, the same is time barred. 6. Besides the above two points, we also find that it is not under dispute that the grinding of the broken pieces of asbestos cement products into powder had been done through the job workers and it is a settled law that the duty liability, if any, would be on the job worker not on the principal manufacturer when the transactions between the principal manufacture and the job-worker are on principal to principal basis. [Hon'ble Supreme Court's judgments in cases of Ujjagar Prints Others v. UOI reported in 1988 (38) E.L.T. 535, Empire Industries Ltd. Others v. UOI reported in 1985 (20) E.L.T. 179 and CCE, Baroda v. M.M. Khambhatwala reported in 1996 (84) E.L.T. 161 (S.C.)]. In this case, it is not the allegation of the Revenue that the transactions between the Appellants and the job-worker were not on principal to principal basis, or the job-workers were just hired labour. It has been pleaded by the learned DR that the point as to who is liable to pay the duty, cannot be taken at this stage, as the same had not been raised at the original adjudication stage or before Commissioner (Appeals). We do not agree with this plea, as the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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