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TMI Blog2020 (2) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... above 25%. The CBEC vide Circular No. 6/92 dt. 21.10.92 clarified to maintain shift wise register for ascertaining the percentage of fly ash in final product. Vide Circular No. 477/43/99 CX.4 dt. 10.08.99, the Board clarified that the percentage by weight of fly ash has to be calculated taking into account the weight of fly ash used with reference to the weight of the finished product in dry condition. It is an accepted position of revenue that weight of fly ash used should be with reference to the weight of the finished product in dry condition and thus the percentage of fly ash has to be determined with respect to weight of finished goods without moisture content. In case of ETERNIT EVEREST LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [ 1999 (8) TMI 888 - CEGAT, NEW DELHI] , the percentage use of raw material was Asbestos fibre 5% to 9%; Pulp 1.5% to 2%, Cement 50% to 55%, Fly ash 35 to 36%; H.G. waste 1.5% to 2%. The tribunal held that the weight of goods with respect to which the percentage has to be arrived at should be determined as if no water is contained in these goods - In the present case the raw material for use in production i.e fly ash, cement, pulp and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation of notification, therefore the personal penalty also need to be reduced - quantum of penalty reduced. Appeal allowed in part. - Excise Appeal No. 94-98 of 2009, Excise Appeal No. 103 of 2009 - A/10578-10583/2020 - Dated:- 27-2-2020 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri. Anand Nainawati, Advocate for the Appellant Shri. H.K. Jain, Authorised Representative for the Respondent ORDER The present appeals are filed by M/s Gujarat Composite Ltd. (M/s GCL), Shri A.K. Chaturvedi (Vice-president, Works), Shri N.K. Bangur, Managing director, Shri Purshottam Soni (Senior G.M- Finance), Shri H.N.Maheshwari, Executive Director and Shri Basant Kumar Bangur against Order No. 19/COMMISSIONER/RKS/AHD-II/2008 dt. 24.10.2008 passed by Commissioner of Central Excise, Ahmedabad. The facts of the case are that M/s GCL are engaged in manufacture of Asbestos Cement Products viz. Sheets and Pipes falling under chapter 68 of the Central Excise Tariff Act, 1985. They are using Fly Ash, Asbestos Fibre and Cement as an Input. M/s GCL were availing benefit of concessional rate of duty in terms of exemption notification No. 5/99 CE dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants submits that they were maintaining Wet Mixture Report showing consumption of raw material shift wise in a day and the same was prepared under the signature of Shift In charge. They were also maintaining Log Sheet which is prepared by the Shift In-charge giving details of production of Sheets/pipes made in his shift. The Wet Mixture report collected by the quality assurance department also notes down the shift wise production on the back side of the Wet mixture report. In addition they also maintain RG-1 Register showing daily production, Note book showing entire production and stocks matured and un-matured, Physical lab register which gives complete break up of finished and unfinished goods, General Shift and Sheet furnishing report prepared by quality control department In charge. It also contains details of materials released for dispatch and production from which details are entered in finished goods record. He submits that vide impugned order a duty demand of ₹ 21,34,09,778/- has been made on sheets and demand of ₹ 3,31,76,764/- on pipes on the ground that the goods contain less than 25% fly ash. The allegation is based upon the consumption of fly as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Fly Ash had been less than 25%. The finding of the adjudicating authority that weight of finished goods in dry condition is relevant for determining the percentage of use of fly ash is correct but the conclusion that the use of fly ash is less than 25% is wrong. The weight of the finished goods with respect of which the percentage of fly ash has to be arrived at should be determined without any moisture content in finished goods. Vide Circular No. 6/92 dt. 21.10.92, the CBEC Board clarified to maintain shift wise register for ascertaining the percentage of fly ash in final product. However vide Circular No. 477/43/99 CX4 dt. 10.08.99 it was clarified that the percentage by weight of fly ash has to be calculated taking into account of fly ash used with reference to weight of the finished product in dry condition. That circular No. 5/64 dt. 30.6.64 issued in context of notification No. 33/64 granting concessional rate of duty on paper containing not less than 40% of bagasse, jute stalks or cereal straw in form of pulp was issued by CBEC and it was noted that the dry weight of raw materials has to be considered. Thus even if percentage of fly ash has to be determined with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it shows that in the raw material mix, cement constitutes 55%. 25% (chemically bonded water present after hydration) thereof would be 13.75% dry weight of mix of the raw material. Therefore if total raw material is 100 kgs, the weight of chemically modified water would be 13.75kgs. If dry condition of asbestos sheet is assumed to include chemically treated water, the total weight of asbestos sheet in dry condition would be 113.75 Kgs. Therefore fly ash used is 28.5 Kgs in batch of 100 kgs would be 25% of 113.75 kgs. That whenever fly ash used in not less than 28.5% of the total weight of raw materials namely fly ash, cement, asbestos fibre and pulp used in batch, then in such cases fly ash would be more than 25% of weight of asbestos in dry condition, even if it is assumed that dry condition will include chemically combined water. In the present case the actual wet mixture report shows that the fly ash used is not less than the 28.5% for each shift for each day for entire five years except few shifts involving total quantity of 342 mtrs. He relies upon the statement dt. 13.01.2005 of Shri A.K. Chaturvedi based upon experiment conducted in December 1992 that even in normal conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey further made a correspondences vide letter dated 22.10.98, 15.09.99, 29.09.99 and the department s letter dated 26.05.2000 regarding percentage of Fly Ash, therefore, there is no suppression of fact, hence the demand for the extended period is not in sustainable. 4.3. As regard appeal of Shri Basant Kumar Bangur, he submits that during the pendency of appeal Shri Basant Kumar Bangur expired and therefore the appeal filed by him may be abated. 5. Shri Sameer Chitkara ld. AR appeared in the first hearing and during rehearing Shri H.K.Jain appeared for the revenue and reiterate the findings of impugned order. He submits that since as per actual wet mixture reports the content of fly ash was found to be less than 25%, the demands have been correctly made. For the same reason the penalty is also imposable. 6. Heard both the sides and perused the case records. The exemption notification in question i.e 5/99 CE dt. 28.02.99, 6/2000 CE dt. 01.03.2000 and other analogues notification during the material time provided exemption to the goods falling under chapter 68 of the CETA of Description Goods, in which not less than 25% by weight of fly-ash or phosphor-gypsum or both h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5%. The CBEC vide Circular No. 6/92 dt. 21.10.92 clarified to maintain shift wise register for ascertaining the percentage of fly ash in final product. Vide Circular No. 477/43/99 CX.4 dt. 10.08.99, the Board clarified that the percentage by weight of fly ash has to be calculated taking into account the weight of fly ash used with reference to the weight of the finished product in dry condition. The gist of the same is as under: I am directed to say that it has been brought to the notice of the Board that there is non-uniformity in the practice with regard to determine of percentage of fly ash in the asbestos cement products for the purpose of eligibility of exemption available under Notification No. 60/91 and succeeding notifications presently Notification No. 5/99 (S. No. 179). Some Commissionerates, reportedly have taken a view that percentage of fly ash should be determined taking into account weight of all the raw materials including water used in the manufacture whether continued or not in the final product, whereas some other have taken a view that water contents should not be considered for the purpose of calculating the proportion of fly ash. Some Commissionerates a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggase pulp. The decision of the Tribunal thus clearly shows that moisture has to be ignored while arriving at weight of finished goods. Thus we find that the fly ash content in sheet is more than 25% and the Appellant are eligible for the exemption on Asbestos Sheet. However in respect of some quantity of Asbestos Sheet it was admitted by the appellant that fly ash quantity is less than 25% on which duty liability comes to ₹ 2,80,000/- which is liable to be upheld. Accordingly duty demand of ₹ 21,31,29,778/-(₹ 21,34,09,778-2,80,000/) in respect of Asbestos Cement Sheet and corresponding, Interest and penalty are set aside. 9. As regard asbestos pipes, we find that the Appellant could not establish that the contents of fly ash in asbestos pipe are more than 25%. Unlike in sheet, the use of fly ash in pipe is much lower than 25% even after excluding the water content. The appellant also not pressed much upon the issue related to pipe. Their main contention in regard to demand on pipe is that they are entitled for cum duty price and modvat credit on the inputs used in the manufacture of Asbestos Pipe. We agree with the appellant on these points that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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