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TMI Blog2019 (12) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... lants thereafter by adding Glauber's salt, dextrin and other chemicals prepared the said paste, which was used in printing of cloth within the factory premises. Alleging that the preparation of 'printing paste' fall within the scope of Note 6 to Chapter 32 hence resulted into 'manufacture' within the definition of 'manufacture' prescribed under Section 2(f) of Central Excise Act, 1944 and classifiable under sub-heading 3204.29 of Central Excise Tariff Act, 1985. Accordingly, periodical demand notices were issued from August, 1990 to February, 1993 demanding duty totaling to Rs. 63,42,042.36 with proposal for penalty. On adjudication, the demands were confirmed by the adjudicating authority with penalty. Aggrieved by the said order, the appellant filed an appeal before the learned Commissioner (Appeals), who in turn, remanded the matter to the adjudicating authority for de novo consideration. The de novo adjudication was completed in the year 2006. The appellant filed appeal against the said order before the learned Commissioner (Appeals), who again remanded the matter to the adjudicating authority for verification of certain facts. On adjudication, again the duty was confirmed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her submitted that during the course of adjudication process, the appellant had produced copies of invoices to substantiate their claim that the dyes and chemicals prepared by the appellant were standardized or formulated dyes, therefore, the printing paste prepared out of such formulated dyes does not result into manufacture. Also, they have produced certificates from various suppliers to prove that the printing paste is not marketable commodity and the same has very short shelf life. Besides, they have also produced certificate from SASMIRA and BRTA to substantiate that the process undertaken by the appellant in the preparation of printing paste does not result into manufacture. 6. It is his contention that even though the first remand order was passed by the learned Commissioner (Appeals) in the year 1995 with direction to consult the Dy. Chief Chemist/Chief Chemist to ascertain whether the printing paste was prepared from unformulated, unstandardized and unprepared dyes or otherwise, the adjudicating authority did not take any action to draw sample and send the printing paste to Dy. Chief Chemist for testing. The remand case was finally adjudicated in 2006 i.e. after 11 years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated standardized or unformulated unstandardized dyes to apply Circular No. 2/93 dated 21.4.1993. There has been dispute relating to levy of duty on preparation/ manufacture of printing paste by the Mills owners, and used in the factory premises captively during the relevant period. To resolve the confusion prevailing on the issue, clarification was issued by the Board under section 37B of Central Excise Act, 1944 bearing No. 2/93. The said circular reads as follows: - "Circular No. 2/93, dated 21-4-1993 [From F. No. 95/7/92-CX.3] Government of India Central Board of Excise & Customs New Delhi Subject : Central Excise - Classification of Printing paste - Forwarding of Order No. 2/93 (See. 37B), dated the 21st April, 1993 - Regarding. Order No. 2/93 (Section 37B). After the issue of Order No. 5/92 (Section 37B) dated 28-5-92 regarding classification of "printing paste", representations have been received contending interalia that all the products used by printing industry for purpose of printing textiles are being classified under Sub-heading No. 3204.29 of the Schedule to the Central Excise Tariff Act, 1985 (henceforth referred to as Tariff). 2. The matter was re-exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Tariff Act, 1985. After issuance of this Circular, in the first order dated 20.10.1995, the learned Commissioner (Appeals) remanded the matter to the adjudicating authority to ascertain the process employed by the appellant and also to find out whether or not the printing paste was prepared from unprepared, unformulated or unstandardized form of dyes. It is directed that the purchase invoice and the dyes procured from the manufacturer of such dyes be examined and in case of necessity, Dy. Chief Chemist/Chief Chemist be consulted to ascertain whether the printing paste prepared or manufactured from unformulated, unstandardized or unprepared dyes or otherwise. Further, it was also directed to examine whether these products are marketable or otherwise. From the records, we find that the de novo proceeding was completed in the year 2006 i.e. after eleven years. None of the directions have been carried out in letter and spirit by the adjudicating authority. The adjudicating authority confirmed the demand again for lack of evidence placed by the appellant to substantiate their claim that the printing paste was prepared by them in their factory premises from formulated, standardized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices, burden of proof was on the Revenue. Mr. Rana is not right in contending that the burden of proof was on the petitioners. The burden always lies on the person who asserts that the particular goods are excisable. It lies at first on the party who would be unsuccessful if no evidence at all was given on either side. There is essential distinction between burden of proof and onus of proof. The burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. Onus means the duty of adducing evidence. Assuming that onus, has shifted on the petitioner, then, the evidence produced by the petitioners has substantially established the link between the material supplied and used by the petitioners. 17. The concept of marketability to which the respondent No. 2 had given go-bye cannot be said to be legal in view of the law laid down by the Apex Court in the case of Bhor Industries Ltd. (supra) and reiterated in the case of Ambalal Sarabhai Enterprises (supra); wherein the Apex Court ruled that marketability is an essential ingredient in order to make the goods dutiable under the Schedule to the Tariff Act. Thus, taking overall view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdship and eschewing equity in taxation. Thus, we may emphatically reiterate that if in the event of ambiguity in a taxation liability statute, the benefit should go to the subject/assessee. But, in a situation where the tax exemption has to be interpreted, the benefit of doubt should go in favour of the revenue, the aforesaid conclusions are expounded only as a prelude to better understand jurisprudential basis for our conclusion. We may now consider the decisions which support our view." 12. In the present case, the show-cause notice was issued to the appellant way back in 1990 alleging that the appellant had manufactured and captively consumed printing paste in their factory premises falling under Chapter sub-heading 3204.29 but failed to discharge duty on the same. Therefore, in view of the ratio of the Hon'ble Supreme Court and also the observation of the Hon'ble Bombay High Court in Phoenix Mills Ltd.' case, the burden lies on the Revenue to prove that printing paste manufactured in their factory premises and consumed captively was out of unformulated, unstandardized or unprepared form of dyes. On the contrary, from the records, we find that the appellant had produc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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