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TMI Blog2017 (7) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ketable but actually sold commercially by the appellant. Since it is chargeable to nil rate of duty in the Tariff, it is in the category of exempted goods - demand with interest upheld. Extended period of limitation - penalty - Held that: - there has been no intimation to the Department before the investigations began - there was clear suppression of material facts by appellant for which extended period has been rightly upheld and penalty has been correctly imposed. Appeal dismissed - decided against appellant. - E/1360/2008 - A/61219/2017-SM[BR] - Dated:- 3-7-2017 - Mr. Devender Singh, Member (Technical) Smt. Karati Somani, Advocate for the Appellant Sh. R.K. Sharma, AR for the Respondent ORDER Per: Devender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of non-dutiable goods viz. Sulphur in Sulphur Recovery Unit (SRU). As per Rule 6 (1) of the CCR, the appellant was required to maintain separate account for the receipt, consumption and inventory of inputs meant for use in the manufacture of exempted goods and should have taken Cenvat Credit only on the quantity of inputs which were intended for use in the manufacture of dutiable goods, which the appellant had failed to produce. The availment and utilization of Cenvat Credit on the inputs used in the exempted final product viz. Sulphur resulted in demand/penalties and interest. A show cause notice was issued and matter was adjudicated resulting in confirmation of demand of ₹ 7,71,454/- along with interest and equivalent pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittal Pigment Pvt. Ltd. 2016 (332) ELT 841 (Tri. Del.). 2. Aban Loyd Chiles Offshore Ltd. Vs. CCE 2006 (200) ELT 370 (SC). 3. Blue Star Ltd. Vs. UOI 2015 (322) ELT 820 (SC). 4. Ld. AR reiterated the findings in the order of the Ld. Commissioner (Appeals) and invited particular attention to the fact that Sulphur is one of the manufactured products of the appellant. He pointed out that appellant have themselves claimed Sulphur as one of their final products amongst others such as HSD, LPG, Naptha etc. in the declarations filed under Rule 173Q of the erstwhile Central Excise Rules, 1944. His contention is that these are finished goods, which are intentionally manufactured for the commercial purpose in a planned way and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . SRU is integrated with DHDS, which has become integral part of the rest of the refinery complex. It has not been disputed that the appellant have themselves declared Sulphur as one of their final products among others such as HSD, LPG, Naptha etc. in their statutory declarations. Hence, Sulphur which is declared as final product in one part of the refinery cannot become a byproduct in another part of refinery as refinery is an integrated whole. If different segments of the refinery are treated as standalone parts, then SRU itself can constitute a distinct part, which is not the case of the appellants. Therefore, I find force in the finding of the Ld. Commissioner that these are finished goods, which are intentionally manufactured for comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling was purely in the context of capital goods and has to be read in that context only. In the case of Hindustan Zinc Ltd. (Supra), the appellant had not declared Jarosite as their final product and the treated effluent is not being sold in market commercially. Hence, that case is distinguishable on facts from the present case. 9. As to the contention that the demand is barred by limitation because the show cause notice dt. 26.03.2004 was issued on the same facts, I find that the show cause notice dt. 26.03.2004 was issued for denial of Cenvat Credit on capital goods and not for denial for input service credit. So the basic issue in 2 show cause notices is different. As to the contention of Ld. advocate that issue was in the knowled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his case, it has not been proved that Revenue was in knowledge before the date of offence or even before 2002, when statement of Sh. G.K. Seth was recorded. In the case of CCE Vs. Mittal Pigment Pvt. Ltd. (Supra) , the assessee had informed the Department by way of letter dt. 03.04.2001 about payment of duty on basis of price declared by their Principal M/s Shambhu Nath Traders Pvt. Ltd. In the present case, there has been no intimation to the Department before the investigations began, In Aban Loyd Chiles Offshore Ltd. Vs. CCE (supra), the Department had full knowledge as recorded by the Commissioner, which has not been shown in the present matter. In view of the foregoing, there was clear suppression of material facts by appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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