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TMI Blog2018 (8) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. 3. Acting on specific information that M/s LIPL was engaged in the evasion of Central excise duty by way of clandestine removal of excisable goods, the premises of M/s LIPL were searched on 13/14.08.2004 and further on 16.02.2005. A show cause notice (hereinafter referred to as 'SCN') dated 30.11.2007 was issued to M/S. LIPL and its two Directors and Manager. The SCN was adjudicated by the Commissioner (Customs and Excise), Noida vide order dated 07.11.2008. The Commissioner (Customs and Excise), Noida framed the following issues for determination:- (i) Whether the amount of Rs. 8,45,11,283.00 charged and collected by M/s LIPL as 'Central excise duty' from their buyers on the clearance of metallised polyster film and Laminated films (PLP in rolls) is demandable from them in terms of Section 11D of the Act along with due interest thereon under Section 11DD,ibid. (ii) Whether Cenvat Credit amounting to Rs. 15,68,167.00 involved in the metallised Polyester film cleared for export is demandable from M/s LIPL in terms of Rule 12/14 of the Cenvat Credit Rules 2002/2004 read with Section 11A(1), ibid, along with due interest thereon under Section 11AB ibid and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter referred to as 'the Act'). The Commissioner (Customs and Excise) had placed reliance on the judgment of Supreme Court in the case of Metlex India Private Limited vs CCE New Delhi : 2004 (165) ELT 129 (SC). However, the process of metallization has been included under the definition of manufacturing in terms of Section 2(f) of the Act vide inserting Chapter note to the Chapter 39 of Central Excise Tariff Act, 1985 w.e.f. 17.04.2006 but the period involved in the SCN was prior to 17.04.2006. 5. The Commissioner (Customs and Excise), Noida inter alia recorded a finding that there was no liability to pay any duty of excise on clearance of metallized Polyster Films and Laminated Polyster Films in the form of rolls or bundles and, therefore, M/s LIPL was not supposed to collect any amount from their customers as duty. However, M/s LIPL had collected excise duty from their customers on clearance of the aforesaid items produced by them unlawfully without any authority of law and, therefore, the same was required to be credited to the Central Government in terms of provisions of Section 11-D of the Act. 6. The Commissioner (Customs and Excise), Noida further held that M/s LIP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he record and order passed by the commissioner. The Commissioner (Customs and Excise), Noida on this issue had specifically held as under:- "16.5 It has been held above, that the process of metallization as well as lamination of flexible polyester films bieng under taken by M/s LIPL was not confirming the criteria provided under Section 2(f) of the Act. Thus, there was no liability to pay any duty of excise on the clearance of Metallised Polyester films and laminated polyester films in the form of rolls or bundles. In such situation, M/s LIPL was not supposed to collect any amount from their customers as duty. As per statute of taxation, the central excise duty an indirect tax, is levied on manufacture of the goods and the same is later on borne by the ultimate customers. However, no tax can be collected if it is not leviable as per law. In the present case, the goods in question (laminated polyester film/ metallised polyester film) are not to suffer any duty of excise. Thus, I find that the amount collected by M/s LIPL against above said clearances (Annexure A-1 and Annexure A-2 to the notice) has not been collected law fully and is required to be credited to the central governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to manufacture resulting in no duty liability on them and at the same time it is contended that M/s LIPL are liable to pay the amount collected some amount as central excise that was not law fully collected by them. During the material period, there was no levy on the above said products processed by M/s LIPL and accordingly the said allegation is correctly raised in the notice. In support of above said argument, M/s LIPL has placed reliance on the ratio of case of NU-Wave Shoes vs CCE ELT 311( Trib-N Delhi), in which it is held that "Reversing of Modvat credit proportionately on a prorata basis on inputs used in the manufacture of exempted variety of footwear and that the amount so reversed has been charged from the customers. Charge of contravention of the provisions of Section 11D is not sustainable. Appeal allowed. (Para 3)" and on the ratio of case of Shree Krishna Industries vs CCE 2005 (182) ELT 369 (Trib-Del) wherein it is held that " There is no manufacture of a new product. The provisions of Section 11D are applicable to only those persons who are liable to pay duty under the Central excise Act or the Rules made thereunder. So provisions of Section 11D are not applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ''Central excise duty' from their buyers on the clearances of metallised polyester film and Laminated films (PLP in rolls) is demandable from them in terms of Section 11D of the Act alongwith due interest thereon under Section 11DD, ibid."
10. The Commissioner as is evident from his order has also held that M/s LIPL had availed the Cenvat credit on raw material in violation of Rule 3/(3)/ 3(4) of the Cenvat Credit Rules 2002/2004 for the amount of Central excise duty they had collected from their customers. The Commissioner (Customs and Excise), Noida had confirmed the demand of Rs. 8,45,11,283.00/- which was charged and collected by M/s LIPL as Central excise duty from their buyers under Section 11D of the Act and interest thereon under Section 11DD of the Act.
11. The findings of the Tribunal are, thus, wholly incorrect, against the record and unsustainable.
12. We, therefore, deem it fit to set aside the impugned judgment and order passed by Tribunal dated 21.07.2015 and allow these appeals and remand the matter back to the Tribunal to decide afresh within a period of three months i.e. by 31st October from the date of production of certified copy of this order. X X X X Extracts X X X X X X X X Extracts X X X X
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