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TMI Blog2010 (12) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they were legally required to submit - The emergence of wastes and scraps is inevitable during the manufacture of wagons whether cleared on payment of duty or cleared availing exemption - Decided against the Revenue - E/EDM/120 & 301/2005 , E/EDM/542/2006 - A-640-642/KOL/2010 - Dated:- 10-12-2010 - S/Shri S.S. Kang, M. Veeraiyan, JJ. REPRESENTED BY : Shri N.K. Chaudhary, Advocate, for the Appellant. Shri B.B. Agarwal, Jt. CDR, for the Respondent. [Order per : M. Veeraiyan, Member (T)]. Appeal No. 120/05 is against the order of the Commissioner No. 53/Ch. 72/COMMR/KOL-II/Adj./2004 CCE /KOL-II/53/2004 dated-26-10-2004 which confirmed the demand of Rs. 58,52,056/- based on show cause notice dated 26-11-1999 relating to the period March 95 to April, 1999. 1.2 Appeal No. 301/05 is against the order of the commissioner 06/ Ch. 86/COMMR/CE/KOL-II/ Adj./2005/ CCE/KOL-II/06/2005 dated 28-2-2005 which confirmed the demand of Rs. 77,66,605.00 relating to the period 1-5-99 to July, 2004 (except March, 2002, July, 2000) based on seven show cause notices dated 3-11-99, 30-8-00, 3-8-01, 19-3-02, 19-12-02, 23-3-04 and 29-11-04. 1.3 Appeal No. 542/06 is against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 5.00 Lakhs under Rule 173Q of Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944. (c) The appellant challenged the order of the Commissioner before the Tribunal and the Tribunal passed Final Order No. A-471/12/2008 dated 16-4-08 [2008 (231) E.L.T. 265 (T)] confirming the demand on merits but holding that the extended period of limitation cannot be invoked and setting aside the penalty. This order of the Tribunal was challenged both by the party and the Department before the Hon ble High Court of Kolkata. Party s appeal came to be decided by the Hon ble High Court vide orders dated 4-3-09 [2009 (241) E.L.T. A121 (Cal.)] and 14/5/2009 by which the order of the Tribunal dated 16-4-2008 was set aside. While passing this order, Hon ble High Court took note of the submission by the advocate appearing for the party that in identical matter, in appeal No. C. Ex. No. 39 of 2008 (Commissioner of Central Excise, Kolkata-II v. M/s. Burn Standard Co. Ltd.), Hon ble High court by its order dated 10th November, 2008 has already set aside the earlier order dated 6-12-07 [2008 (223) E.L.T. 595 (T)] passed by the Tribunal. Thereafter, when the Revenue s appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion of not fulfilling the obligations under 6(2), 6(3) of Cenvat Credit Rules does not arise. Therefore, he submits that they have fulfilled the conditions of Notification of 67/95. 4.3 The appellants have clearly revealed the fact relating to manufacture of dutiable wagons and wagon parts and exempted wagons and wagon parts. They have clearly indicated emergence of wastes and scraps and also sought for classification of said products and also sought for benefit of Notification of 67/95. The Department has not raised any further queries. The emergence of wastes and scraps and recycling of such wastes and scraps for manufacture of parts of wagons are in the knowledge of the Department. Under these circumstances the question of invoking extended period of limitation for demand of duty does not arise. 4.4 No relevant facts have been suppressed from the Department. The question of imposition of penalty does not arise. He also submits that the appellants are a Public Sector Undertaking and there could be no intention to evade any payment of duty. At any rate, the Department has not relied upon any evidence alleging suppression of relevant facts warranting imposition of penalty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecedent has been created by the Hon ble Supreme Court. 5.2 The decision of the Tribunal dated 6-12-2007 basically dealt with the availability of the benefit of Notification 89/95, dated 18-5-95 as claimed by the appellant and in the present appeal undisputedly the dispute relates to availability of Notification 67/95, dated 16-3-95. Therefore the decision of the Tribunal dated 6-12-2007 cannot be applied to the issues in the present appeals. 5.3 The order of the Hon ble High Court in Department s appeal against the CESTAT order dated 16-4-08 has been passed after taking note of the fact that the said order of the Tribunal in party s appeal has been set aside vide order dated 4-3-2009 and therefore the dismissal of the appeal of the Department as infructuous does not bar the Department from raising issues of limitation before the Tribunal. 5.4 The appellants have manufactured final products viz. wagon and wagon parts as well as wastes and scrap which emerged during the course of manufacture of such wagon and wagon parts. The wastes and scrap are also excisable goods and the appellants have admittedly filed classification list and sought for exemption under Notification 67/95. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific clarificative amendments. In the present case on facts and law, there is no warrant to conclude that the said amendment will have a retrospective applications. Even if it is held to be retrospective, the obligation has not been discharged by the appellants. 6.1 We have carefully considered the submissions from both sides and perused the records. Before discussing the merits of the case, we are constrained to make certain observations on the conduct of both sides which lead to proliferation of litigations. (a) The Commissioner has passed the impugned orders on (19-12-04, 28-2-05 and 13-6-06 which are on the same issues relating to different periods. It is not clear whether the appellants brought to the notice of the Commissioner his earlier decisions by the Commissioner on the same issue when orders dated 28-2-2005 and 13-6-2006 were passed. It is also not clear from these orders whether Commissioner was aware of earlier orders passed on the disputed issues. (b) When the Tribunal decided on 6-12-07, the appeal No. 571 of 2004, the present appeals namely E/120/2005, E/301/2005 and E/542/2006 were pending before the Tribunal. We have not been shown that either side assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Revenue that this notification is not applicable to the appellants in the present case, in view of the fact that the appellants manufactured some dutiable wagons. On the other hand, it is the claim of the appellants that portion of waste and scrap, which are used in respect of such wagons cleared on payment of duty, the appellants have proportionately paid the duty. Considering the submissions made from both sides, we are of the prima facie view that the appellants have a good case on merits in their favour . During the course of final hearing, we have heard no arguments from the Department s side to take a contrary view. As such, we confirm our prima facie view and setting aside the impugned order, we allow the appeal. 7.2 Hon ble High Court by their order dated 10-11-08 did not interfere with the order of the Tribunal dated 6-12-07 holding that there is no substantial question of law involved to admit the appeal. Since the Hon ble High Court has not admitted the appeal and has not considered any question of law and has not deliberated on legal issues, we do not find any binding precedent to be culled out of the said order to be followed in the present case. 7.3 F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TABLE Sl. No. Description of inputs Description of final products (1) (2) (3) 1. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986, other than the following, namely : All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following namely : (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (ii)goods classifiable under heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (ii) goods classifiable under heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (iii) goods classifiable under sub-heading Nos. 2710.11, 2710.12, 2710.13 or 2710.19 (except Natural gasoline liquid) of the Schedule to the said Act; (iv) high speed diesel oil classifiable under heading No. 27.10 of the Schedule to the said Act. (iii) woven fabrics classifiable under Chapter 52 of Chapter 54 or Chapter 55 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice dated 26-11-1999 relating to the period April 95 to April, 1999 shows that the total value of wastes and scrap captively consumed as Rs. 4,26,35,890/- and out of which wastes and scraps used in duty paid wagons as Rs. 36,66,626/- and value of wastes and scraps used for exempted wagons as Rs. 3,89,69,264/-. Clearly the show cause notice proposed demand of duty only in respect of wastes and scrap used for such exempted wagon and wagon parts. 9.2 Coming to the Notification No. 69/95, dated 16-3-95, it is to be noted that the goods manufactured by an assessee for use in their own factory, referred to as inputs were eligible for exemption subject to the condition that the said inputs are used in the manufacture of final products on which duty was paid. In the present case, the duty demand relates to wastes and scrap used in manufacture of wagon and wagon parts on which duty was not paid. Therefore the wastes and scrap (which are referred to as inputs) having been used for exempted products have not fulfilled the conditions for grant of exemption under the notification. 9.3 The amendment by Notification 31/01 dated 1-6-01 prescribing a condition that exemption was not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. Advocate submits that the appellants being a public sector undertaking cannot be alleged to have any intention to evade payment of duty. We are not in a position to accept such blanket submissions. However as already mentioned, in the facts and circumstances of this case, we do not find that there was any suppression of relevant facts and therefore extended period of limitation cannot be invoked. For the same reasons we also hold that the appellants are not liable to any penalty. 10. Ld. Advocate submitted that in appeal No. 301 of 05, in respect of show cause notice dated 23-3-04, the part of the demand is hit by time bar and the amount within the time limit is only Rs. 12,74,300.00 as against the total demand of 22,64,639.00. Ld. Jt. CDR agrees with the above. 11. In the light of the above, the appeals are disposed as follows : (a) Appeals of the party are rejected on merits. (b) The demand of duty involved in Appeal No. 120 of 2005 is set aside on the ground of limitation. Penalty is also set aside. (c) The demand of duty involved in the appeal No. 540 of 2006 alongwith interest is upheld. Penalty is set aside. (d) In Appeal No. 301 of 05, the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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