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TMI Blog2022 (8) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression of facts or contravention of any of the provisions of Act or the rules made thereunder with intent to evade payment of duty, the demand as per proviso to this section can be made within five years. From the N/N. 32/1999-CE it is quite clear that the said exemption notification is conditional exemption notification and also provides for the manner in which it is to be given effect to. The appellants have made the claim to the said notification, to argue that the in terms of this notification they will be entitled to refund of the duty paid by them and hence the issue is completely revenue neutral and hence extended period of limitation cannot be invoked for making the demand from them. The appellants have not been able to show any ground by which they could claim that they entertained a bonafide belief that goods manufactured and cleared by them were not subject to excise duty or attracted nil rate of duty or were exempt from payment of duty. It is settled law that the bonafide belief is not the blind belief and need to be established before that plea can be taken. Without any evidence to show how the appellants claim bonafide belief in the matter to the effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Rules 2002. However, I refrain from imposing any penalty on Smt Suzanne Langstieh. 2.1 Appellant 1 was manufacturing the Soya Products with the brand name Gulab , but did not obtain registration from the Central Excise Authorities and did not pay the Central Excise Duty payable on such goods. On investigation it was found that the brand name Gulab was registered in the name of M/s. Vinita Soya Products, a partnership firm in which Shri S. B. Sharma as well as Shri P. K. Sharma were partners. 2.2 Revenue was of the view that Appellant 1, will not be eligible for the benefit of SSI Exemption under the Notifications 8/2002 dated 01/03/2002 as well as 8/2003 dated 1/3/2003, in as much as the assessee had manufactured and cleared Soya Products bearing the brand name of another person. After conclusion of investigation, Show Cause Notice dated 07/04/2008 was issued to the Appellant 1 as well as the two directors (Appellant 2 and Appellant 3) proposing the demand of Central Excise Duty for the disputed period, without the benefit of SSI Notification. 2.3 The show cause notice was adjudicated as per the impugned order referred in para 1, above. 2.4 Aggrieved appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Jurisdictional Authorities before allowing the benefit. As such, we are unable to entertain these arguments at this stage. 10. The appellant has also pleaded that the penalties imposed on the assessee as well as the directors is exorbitant. The penalty imposable under the Provision of Section 11AC is equal to the total duty demanded under the provisions of Section 11A. There is no discretion involve in the levy of such penalty. We have upheld the finding of the Lower Authority justifying suppression, hence, the penalty under Section 11 AC cannot be waived. 11. In the facts and circumstances of the case, we are of the view that the penalties imposed on the two directors, merits reduction. Penalties imposed on Shri S. B. Sharma as well as Shri P. K. Sharma both directors are reduced from Rs. 2 lakh to Rs. 50,000/- (Fifty Thousand only) each. 12. In view of the above discussions, the impugned order is upheld, but for the above reduction in the penalties on the directors. The appeals are disposed off as above. 2.5 Aggrieved by the order of tribunal appellant 1 filed the Central Excise Appeal No 4/2019 before the Hon ble High Court of Meghalaya. Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysical verification is necessary to ascertain whether the manufacturing unit of the appellant falls within the area designated in the applicable notification for the appellant to be entitled to exemption by way of reimbursement. 9. The second aspect of the matter on which there is no discussion in the order of the Appellate Tribunal pertains to the disqualification of the appellant to be entitled to exemption on the ground that the appellant manufactured the product under the brand name of another. According to the appellant, it started manufacturing the soya chunks under the Gulab brand name with effect from December 1, 2006. The Appellate Tribunal has referred to the oral evidence of a regular customer of the appellant which appears to be a rather sweeping statement to the effect that the appellant has always been engaged in manufacturing soya chunks under the Gulab brand. The Appellate Tribunal placed great credence on such statement though there were no documents in support of the assertion nor any bill or voucher or the like relied upon by the department that would reveal that the appellant had manufactured soya chunks under the Gulab brand prior to December 1, 2006. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, particularly since the demand pertains to the period of 2003-04, 2004-05 and 2005-06. 2.6 Appellants 2 3 also filed the Central Excise Appeal No 3/2019 and 5/2019 before the Hon ble High Court of Meghalaya. Hon ble High Court vide its order dated 08.02.2022held as follows: These matters are connected with Central Excise Appeal No.4 of 2019 and pertain to the penalty imposed on the directors of the company owning the manufacturing unit for perceived evasion of excise duty. By an order passed earlier today, the manufacturer s appeal has been allowed by setting aside the order impugned passed by the Appellate Tribunal on January 23, 2019 and remanding the matter for a fresh consideration on certain key issues that have been elaborately indicated in the order passed by this Court. As a consequence, the orders of penalty imposed on the present appellants stand set aside and these matters are also remanded for a fresh consideration by the Appellate Tribunal upon answering the issues indicated in the order pertaining to Central Excise Appeal No.4 of 2019. Central Excise Ap.No.3 of 2019 and MC (Central Excise Ap) No.2 of 2019 along with Central Excise Ap.No.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of wilful suppression of material facts intending to evade payment of Central Excise duty. In the present case, the manufacturing activity of the appellant was in the knowledge of the department on written intimation the department seeking clarification on dutiability of Soya Bari, by its letter dated 23rd August,2006. (Copy of the letter dated 23.08.2006 is enclosed as Ext. - J). The Range Superintendent in its reply issued a certificate dated 13.09.2006 that Soya Nugget (Soya Chunk) falling under Central Excise Tariff Heading 23.04 and the product attracts Nil rate of duty and Central Excise Registration is not required. (Copy of the Department Certificate dated 13.09.2006 is marked as Ext.- K). In the present circumstances, the normal period of limitation to raise demand is one year from the due date of filing ER-I Return and invoking extended period of limitation is not sustainable in the present situation under Sec. 11A of the Central Excise Act, 1944. The impugned Order confirmed demand invoking extended period of limitation is not sustainable in law. In the case of Continental Foundation [ 2007 (216) ELT 177 (S.C)], wherein the Hon'ble Apex Court has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be any possibility of suppression of fact with mala fide intention intending to evade payment of duty by the appellant. It is a settled law that in case of revenue neutral situation, there cannot be any possibility of evasion of payment of duty by the appellant and the extended period of limitation cannot be invoked. The appellant relies on the ratio of the Apex Court as held in the case of Nirlon Ltd. Vs. Commissioner of Central Excise, Mumbai, reported in 2015 (320) ELT 22 (S.C), wherein the Hon'ble Apex Court has held at para 9 and 10 as - .. From the above interpretation of the provisions of Sec. 11A of Central Excise Act, 1944 by the Hon'ble Apex court, there is no mala fide intention in the present case intending to evade payment of duty and the demand from March, 2003 to 31st March, 2007 is beyond limitation and the demand is liable to be set aside in the ends of justice. For that that the goods Soya Bari was not specified under the 6 Digit Central Excise Tariff Act,1985 as there is no specific entry in Tariff in the First Schedule attracting duty for the product in question and not liable for payment of Central Excise Duty under the Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uage used in the relevant Tariff Entry and not in the description in the Notification. It is further submitted that an exemption notification is not an indicator to correct classification; it may be looked into, but cannot be made the basis for determining classification. While a statutory notification may be looked up to ascertain scope of an entry in the Tariff, it could not be used to determine or settle disputed classification of goods. The Appellants relies on the settled case as held in the case of - SIEMENS Ltd. [1998 (100) ELT 239 (Tri)]; Gujarat State Fertilizers Ltd., 1996 (83) ELT. 624 (Tri); Kishan Chemicals 1996 (86) ELT. 543 (Tri), Padmavathy Panel Boards Ltd. 2001 (132) ELT. 36 (Tri); Nirlon Synthetic Fibres Chemicals [2001 (135) ELT. 1254 (Tri)] Under the present circumstances, confirmed demand on the basis of exemption Notification pertaining to its previous period is not sustainable in law. Hence, the demand confirmed in the impugned Order-in-Original dated 16.03.2009 is not tenable in law and is liable to be set aside in the ends of justice. For that the impugned Show Cause is issued by the department on wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court and High Courts in a plethora of decisions that for the purposes of identifying a commodity, what is known as and understood in the business and commercial circle is much more relevant and not what is described in several dictionaries and encyclopaedia. Referred cases : Wood Paper Ltd., 1991 (53) ELT. 189 (Guj-DB); Gujarat Woollen Felt Mills, 1977 (1) ELT 24 (SC); Dunlop India Ltd. AIR 1977 SC 597 (SC); ( Dowell's Electro Works, 1990 (45) ELT 96 (Tri); Advani Oerlikon Ltd. Vs. UOI 1981 (8) ELT.432 (Bom.). For that the department has classified the product 'Soya Bari' under Chapter Sub-heading 2108.99 arbitrarily and without any evidence on records and raising demand on wrong classification is bad in law and liable to be set aside. In this context, it is submitted that the excise authorities must have materials and evidence before them, on the basis whereof they can determine the classification of a particular product. It would not just and fair to decide the classification of the goods on presumption basis. The excise authorities are under a duty to take all material evidence into consideration before reaching the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible for SSI exemption for the Financial Year 2002-03 and 2003-04 as the aggregate value of clearance was less than 300 lakhs and clearing unbranded product. The ld. Commissioner, Central Excise, Shillong, failed to consider this aspect in her impugned Order-in-Original and uphold the allegations in her Order in Original. The impugned Order-in Original is not maintainable in the eye of law and liable to be set aside on this ground. For that the duty demanded in the show cause notice is not payable by the Appellants for the period from March, 2003 to 28th February 2006 as the product was not covered under the Central Scoise Tariff which was subsequently included in the amended Tariff w.e.f 28th February,2006. Further, the Appellants has already discharged their duty liability for the period from 1st March, 2006 to February, 2007 by deposit of Rs. 21,96,608/- towards basic excise duty; Rs. 43,931/ towards Ed. Cess and paid interest for the said period Rs. 1,44,408/- by TR-6 No. 01/06-07 dated 26/02/2007 and TR-6 Challan No. 02/06-07 dated 30/03/2007 by depositing Rs. 95,574/- towards Basic Excise and Rs.1805/- towards Ed. Cess. Copy of the TR-6 Challan No. 01 /06-07 dated 26/02/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in evading duty. The allegation of the department intentionally evading duty is not sustainable in the eye of law. The contention of the ld. Commissioner, Central Excise, Shillong, is not sustainable in the eye of law and liable to be set aside. For that no penalty u/s. 11AC of the Central Excise Act,1944 is warranted in the instant case as there is no contravention of provisions of the Central Excise Act and Rules and no mala fide intention to evade duty in the instant case. 3.3 Arguing for the revenue learned authorized representative re-iterated the findings recorded in the impugned order and submitted as follows: The appellant 1 had manufactured and cleared the goods bearing the brand name Gulab which was not owned by them. The investigation conducted by the department has established that the brand name was owned by M/s. Vinita Soya Products which is a partnership firm. The Appellant 1 is a Private Limited company and is distinct from the partnership firm, in which their directors are partners. even if the brand name is used by the appellant with the NOC from the owner of the brand name, it cannot be considered as use of brand name belonging to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit of one crore needs to be ascertained. (iii) Whether for the reason that the benefit of exemption under Notification No 32/1999-CE (as amended from time to time) will be admissible to the appellant 1, appellant can be said to have intention to evade payment of duty, to invoke extended period of limitation as per proviso to Section 11A (1) of the Central Excise Act, 1944. 4.3 For confirming the demands made against the appellant 1 and for imposition of penalties on all three appellant, Commissioner has in the impugned order recorded following findings: 3.1.1 The said factory in turn has contested that they were not liable to pay any Central Excise duty as their products Soya Bari was not covered under Schedule to the Central Excise Tariff Act, 1985 till 28.02.06. They also disputed the allegation of using the brand name since March, 2003 i.e. inception of their factory and also that they are eligible for SSI benefit for the years 2002-03 and 2003-04 as the total turnover was less than 300 lakhs etc. The issues involved in this case are discussed in the following paragraphs: - 3.2 For demand of duty, the department has classified the impugned product under Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those sub heading and any related Chapter Note and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. For the purposes of this rule, the relative Section Notes also apply, unless the context otherwise requires. It is therefore very clear from this Rule of interpretation that the Chapter Note is the most vital ingredient for classifying some product under a particular sub-heading and when the Chapter Note 9 is very specific in the instant case, hence the classification as made by the Department is appropriately done and there can be no ambiguity regarding its classification. 3.2.1 On this issue of classification of the impugned product, Soya Bari I also find that the Hon ble Tribunal Delhi in the case of Sonic Biochem Extraction (P) Ltd. vs Commissioner of Central Excise as reported in 2004(167)ELT 430 has also held inter alia in regard textured soya protein namely mealmaker, soya chunks and protein rich soya granules claimed as processed products, that mere fact that the product after being boiled is garnished with spices and salt etc. will not take away its character of preparation in nature of instant food ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er this sub- heading 21061000. The plea of the said factory that the said sub-heading included goods of the nature of instant food and/or the goods like Namkeen , Bhujia etc. therefore, does not sustain. The contention of the factory for not paying the duty on the pretext that it was not classifiable in the Central Excise Tariff prior to 01.03.2006 is misplaced and not based on real fact of law for the time being in force. I find that the impugned product was classifiable under the sub-heading 2108.99 till 28.02.05 and under the sub-heading 21061000 w.e.f. 01.03.05. 3.3 Regarding the use of Brand Name, the said assessee has contended that they have used the brand name Gulab Brand w.e.f 01.12.2006 as is evident from the 'No objection certificate issued by M/s Vinita Soya Product, who is the owner of the brand name and that prior to this period, they have cleared their goods without any brand name to sell their product through whole sale dealers, whereas the allegation is that they have used the brand name since the commencement of their commercial production and clearance of the goods from March 2003. On the issue of brand name, I find that various personnel involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f marketing and the goods reached to ultimate customers like Shri Narendra Kumar, who had confirmed to have exported only the Gutab Brand of the products purchased from the said factory for his export business since 2003 (four years preceding 2007 as stated by him in his statement dated 30.11.2007). Shri Narendra Kumar also has confirmed that only the branded Soya Bari bearing the brand name Gulab Brand' were exported and they had purchased the goods for export from the said factory. It is, therefore, clear that the said factory had used the brand name Gulab Brand for marketing their products manufactured in their factory though very consciously they have not maintained any record of use of the brand name during the earlier period. But I find that the statement of one Managing Partner of the said factory holds immense importance, moreover, the same statement being corroborated by other statements, it attains the status of evidence. 3.4 The said assessee has claimed that they are entitled for the benefit of SSI Exemption for the years 2002-03 and 2003-04 since they did not cross the threshold limit of three hundred lakhs and that since they cleared only the unbranded produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from them in terms of Proviso to Section 11A(1) of Central Excise Act, 1944. The amount so deposited by the said factory is also liable to be appropriated into the exchequer. 3.6 Regarding the interest, I find that the interest in such cases of evasion of duty by way of manufacture and clearance of goods without payment of duty and without observing any legal formalities is mandatory and specific in nature. The said manufacturer has also admitted the fact of their liability to pay the interest and they have already paid certain amount towards payment of interest, which is liable to be appropriated towards the exchequer. But their stand of not paying the duty on the rest of the period involved in the instant case, as discussed (supra), carries an additional liability of paying the interest at the appropriate rate for the remaining period, for which they still have not paid any duty. Therefore, interest for the rest period also is leviable in terms of Section 11AB of the Act ibid and recoverable from them. 3.7 Regarding invoking extended period of limitation under proviso to sub section (1) of Section 11A of Central Excise Act, 1944 and regarding imposition of penalty, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted the same Modus Operandi and evaded Central Excise duty which is dealt with in a separate proceedings before a separate adjudicating authority. 3.7.2 Based on the facts and circumstances of the case, I find that the said assessee has been resorting to willful misstatement and suppression of facts by way of misclassification and wrong interpretation of law etc. with the sole intention of evading the Central Excise duty. Therefore, I find that they are liable to penalty in terms of Section 11AC of the Act ibid. The said assessee in the instant case has failed miserably to adhere or respect the faith deposed on him/them in the statute and therefore, they have rendered themselves liable to penalty under Section 11AC of the Act ibid. 3.8 With regard to the proposal of imposition of personal penalty on S/Shri Pawan Kumar Sharma and Shiw Bhagwan Sharma and Smti Suzanne Langstieh, I find that they have been alleged to have dealt with the excisable goods with the intention to evade the duty and they have suppressed the material facts from the knowledge of the department. From the records of the case it is apparent that both S/Shri Pawan Kumar Sharma and Shiw Bhagwan Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect and have directed the tribunal to arrive at the finding of fact, after taking into consideration the submission of the appellant that they started using the brand name, Gulab in respect of their goods only from 01.12.2006. Hon ble High Court has stated that the finding rendered by the CESTAT in its order is not based on any documentary evidence such as invoice etc., but is based completely on statements made by the Directors of the company and some purchasers etc. Commissioner has in his order at para 3.3, 3.3.1 and 3.4 discussed this issue in considerable detail. 4.6 Undisputedly in para 3 and 4 of the Show Cause Notice dated 07.04.2008 following has been stated: 3. Whereas it appears that since Inception of their commercial production w.e.f march 2003, the said factory has been carrying out their production and clearance under the brand name Gulab Brand and from the documents so resumed, the production, clearance and value of clearance for the year 2002-03 (March 03), 2003-04, 2004-05, 2005-06 and 2006-07 (upto January 2007) [Detailed calculation in Annexure A] are as herein below: YEAR PRODUCTION (IN QTLS) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the clearance of the said goods is registered in the name of partnership firm wherein the two Directors of the said unit are partners. The Brand Name is registered in the name of partnership firm, M/s Vinita Soya Products since 10.10.1994. In fact this fact itself is enough to hold that the appellant 1 was clearing the goods under the brand name of Gulab Brand . However revenue has further adduced evidences by making the market enquiries and recording the evidences in the form of statement of the Directors of the Appellant 1 and purchaser of the goods. It is not just the statement but all the circumstantial evidences which have been taken into account by the adjudicating authority for concluding that the Appellant 1 had cleared the goods contrary to the provisions of the SSI Exemption Notification. Appellant has not produced any evidence either before the adjudicating authority or before us to establish to the contrary. In the case of D Bhoormull [1983 (13) ELT 1546 (SC)], Hon ble Supreme Court has observed as follows: 26 . Large scale smuggling of gold or other goods into India may pose a threat to the economic and fiscal interests and policies of the State. Such illi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal proceedings, where there is no statutory provision to the contrary. But in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, or universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and as Prof. Brett felicitously puts it- all exactness is a fake . El Dorado of absolute Proof being unattainable, the law, accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus legal proof is not necessarily perfect proof often it is nothing more than a prudent man s estimate as to the probabilities of the case. 31 . The other cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered to use the words of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it can be said by way of generalisation that the effect of the material facts being exclusively or especially within the knowledge of the accused, is that it may, proportionately with the gravity or the relative triviality of the issues at stake, in some special type of case, lighten the burden of proof resting on the prosecution. For instance, once it is shown that the accused was travelling without a ticket; a prima facie case against him is proved. If he once had such a ticket and lost it, it will be for him to prove this fact within his special knowledge. Similarly, if a person is proved to be in recent possession of stolen goods, the prosecution will be deemed to have established the charge that he was either the thief or had received those stolen goods knowing them to be stolen. If his possession was innocent and lacked the requisite incriminating knowledge, then it will be for him to explain or establish those facts within his peculiar knowledge, failing which the prosecution will be entitled to take advantage of the presumption of fact arising against him, in discharging its burden of proof. 44 . These fundamental principles, shorn of technicalities, as we have dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is of no significance. From the turnover as recorded in the para 4.6 above as per para 9 of the Show Cause Notice and as per Annexure A to the Show Cause Notice, Appellants value of clearance during each year was much higher than Rs 1 crore. 4.11 Now coming to the issue of limitation for making the demand. Appellants have contended that they did not had any intention to evade the payment of duty. The crux of their submission is that what so ever duty they would have paid would be admissible to them in form of cash refund as per the notification No 32/1999-CE which is applicable them to them and the entire exercise is thus revenue neutral. They also submitted that they were under bonafide belief that the goods manufactured and cleared by them were correctly classifiable under the chapter heading 23.04, and attracted nil rate of duty. They have submitted a date sheet reproduced below which highlighted the major events calumniating in the issuance of Show Cause Notice to them. Date Description of events March, 2003 Appellants set up manufacturing of Soya Bari Soya Nuggets at Village - Tamulkuchi, 13 Mile, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.12 Counsel for the appellant has relied upon the following decisions in his support: i. Continental Foundation [2007 (216) ELT 177 (SC)] ii. VVF Ltd [2020 (372) ELT 495 (SC)] iii. Nirlon Ltd. [2015 (320) ELT 22 (SC)] 4.13 As per the Section 11 A (1) of Central Excise Act, 1944, the normal period for making the demand in respect of the duties short levied or short paid/ Not levied or not paid is one year. However in case where the short levy/ short payment or non levy/ nonpayment is on account of fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of Act or the rules made thereunder with intent to evade payment of duty, the demand as per proviso to this section can be made within five years. In the case of Continental Foundation referred above Hon ble Apex Court has observed as follows: 9 . We are not really concerned with the other issues as according to us on the challenge to the extended period of limitation ground alone the appellants are bound to succeed. Section 11A of the Act postulates suppression and, therefore, involves in essence mens rea. 10 . The expression suppression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11A. Mis- statement of fact must be wilful. 4.13 In case of Nirlon Ltd., Hon ble Apex Court has held as follows: 9 . We have ourselves indicated that the two types of goods were different in nature. The question is about the intention, namely, whether it was done with bona fide belief or there was some mala fide intentions in doing so. It is here we agree with the contention of the learned Senior Counsel for the appellant, in the circumstances which are explained by him and recorded above. It is stated at the cost of repetition that when the entire exercise was revenue neutral, the appellant could not have achieved any purpose to evade the duty. 10 . Therefore, it was not permissible for the respondent to invoke the proviso to Section 11A(1) of the Act and apply the extended period of limitation. In view thereof, we confirm the demand insofar as it pertains to show cause notice dated 25-2- 2000. However, as far as show cause notice dated 3-3-2001 is concerned, the demand from February, 1996 till February, 2000 would be beyond limitation and that part of the demand is hereby set aside. Once we have found that there was no mala fide intention on the part of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under 21061000 and attracting the duty @ 8%. They relied on the certificate dated 13.09.2006, issued by the range superintendent stating as follows: TO WHOM IT MAY CONCERN This is to certify that M/s Vansha Fragrances Pvt Ltd, 13th Mile, Tamulkuchi, Byrnihat, Fist Ri-Bhol, Meghalaya, who manufactures Soya Nugget (Soya Chunk) falling under Central Excise Tariff Heading 23.04 as per their declaration , is not a Registered Central Excise factory as the product attracts NIL rate of Central Excise Duty as per the tariff and as such is not required to obtain Central Excise Registration. Commissioner has considered this certificate and has recorded his finding on the said certificate. It is interesting to note that Appellant 1 has approached the Range Superintendent vide his letter dated 23.08.2006, seeking clarification in respect of dutiability of their product, whereas it is their claim that their product become dutiable from 01.03.2006 when notification No 3/2006-CE dated 01.03.2006 was issued. It is their submission that they had voluntarily approached the department for payment of duty, from 01.03.2006. What was purpose for approaching range Superintendent on 23.08.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Oil Corporation, Digboi, and cleared from a unit located in the Growth Centre or Integrated Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estates or Industrial Area or Commercial Estate or Scheme Area, as the case may be, specified in Annexure appended to this notification, from so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of CENVAT credit under the CENVAT Credit Rules, 2001. Provided that the exemption contained in this notification shall not be applicable to the goods falling under Chapter 24. Provided that the exemption contained in this notification shall not be applicable to the goods manufactured and cleared from: (a) Numaligarh Refineries Limited (NRL) or; (b) Bongaigaon Refinery and Petrochemicals Limited (BRPL) or; (c) Indian Oil Corporation, Guwahati or; (d) Assam Oil Division, Indian Oil Corporation, Digboi, 1A. In cases where all the goods produced by a manufacturer are eligible for exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Excise and Customs. Such amount credited in the account current may be utilised by the manufacture for payment of duty, in the manner specified under rule 8 of the Central Excise Rules, 2002, in subsequent months, and such payment should be deemed to be payment in cash; Provided that where the exemption contained in this notification is not applicable to some of the goods produced by a manufacturer, the amount of such credit shall not exceed the amount of duty paid less the amount of the CENVAT Credit availed of, in respect of the duty paid on the inputs used in or in relation to the manufacture of goods cleared under this notification.; (b) the credit of duty paid during the month under consideration, other than by way of utilisation of CENVAT credit under the CENVAT Credit Rules, 2002, may be taken by the manufacturer in his account current, by the seventh day of the month following the month under consideration; (c) a manufacturer who intends to avail the option under clause (a), shall exercise his option in writing for availing such option before effecting the first clearance in any financial year and such option shall be effective from the date of exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, duty paid, by utilisation of the amount credited in the account current, shall be taken as payment of duty by way other than utilisation of CENVAT credit under the CENVAT Credit Rules, 2002. . 3. The exemption contained in this notification shall apply only to the following kind of units namely :- (a) New industrial units which have commenced their commercial production on or after the 24th day of December, 1997. (b) Industrial units existing before the 24th day of December, 1997 but which have undertaken substantial expansion by way of increase in installed capacity by not less than twenty five per cent on or after the 24th day of December, 1997. 4. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of publication of this notification in the Official Gazette or from the date of commencement of commercial production whichever is later. From the above referred notification it is quite clear that the said exemption notification is conditional exemption notification and also provides for the manner in which it is to be given effect to. The appellants have made the claim to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside. By the said order, the Tribunal held that since it is a case resulting in Revenue neutral situation, therefore, the extended period of limitation is not applicable and the entire demand is barred by limitation. Our attention is also drawn to the decision of the Larger Bench, a copy of which is annexed to the paper book. In the operative portion of the judgment, the Larger Bench of the Tribunal has answered the reference in the following manner :- (a) Revenue neutrality being a question of fact, the same is to be established in the facts of each case and not merely by showing the availability of an alternate scheme; (b) Where the Scheme opted for by the assessee is found to have been misused (in contradistinction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence : (c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee s manufactured goods; (d) We expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it reasonably. Similarly, in the case of Inter Scape [2006 (198) E.L.T. 275 (Tri.)] this Tribunal held that belief can be said to be bona fide only when it is formed after all reasonable consideration are taken into account. It is not the case of the appellant that they sought legal advice in the matter or were so advised by any one. On the contrary, we find that there are a number of judicial pronouncements which prohibited diversion of goods from one project to another and, therefore, the plea of bona fide belief does not sustain. Further in case of Bhushan Steel Strips Ltd [2014 (310) ELT 918 (T-Mumbai)] tribunal again stated as follows: 18.1 As regards the point that the appellant bonafidely believed that they were eligible for the benefit of the Cenvat credit, this contention is not tenable for the following reason. A belief can be said to be bona fide only when it is formed after all reasonable considerations are taken into account as held by this Tribunal in the case of Interscape v. Commissioner of Central Excise, Mumbai-I - 2006 (198) E.L.T. 275 (Tri.-Mum). In Winner Systems - 2005 (191) E.L.T. 1051 (Tri.-Mum), it was held that blind belief cannot be a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is not proper. Therefore, the argument of the appellant that in view of the bona fide belief, extended time could not have been invoked falls flat. Without any evidence to show how the appellants claim bonafide belief in the matter to the effect the goods manufactured by them do not attract any excise duty, the argument made in this regard cannot be accepted. Thus in absence of any such bonafide belief, the appellants reliance on the decision of the Hon ble Apex Court in case of Continental Foundation and Nirlon Ltd. is farfetched. 4.16 We have earlier observed that issue of classification was not even under challenge before the Hon ble High Court and it could not have been in view of the express provision under Section 35 G 35 L of the Central Excise Act, 1944 which provides as under: Section 35G. Appeal to High Court. - (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment), if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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