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TMI Blog2024 (7) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act. ii. I confirm the demand of Rs. 42,65,905/- against the Noticee under Section 11A of the Act in respect of Show Cause Notice C.No. V(48)15/CE/Adj/34/2012/2216-18 dated 27.03.2012 after allowing the benefit of Cenvat credit of Rs. 34,80,138/-. The amount confirmed is recoverable along with interest under Section 11AB/11AA of the Act. I also impose penalty of Rs. 42,65,905/- on the Noticee under Section 11 AC of the Act. iii. I confirm the demand of Rs.4,43,253/- against the Noticee under Section 11A of the Act in respect of Show Cause Notice C.No. V(48)15/CE/Ad)/116/2012/6412-14 dated 22.10.2012 after allowing the benefit of Cenvat credit of Rs. 16,81,005/-. The amount confirmed is recoverable along with interest under Section 11AB/11AA of the Act. I also impose penalty of Rs. 4,43,253/- on the Noticee under Section 11 AC of the Act. iv. I confirm the demand of Rs. 25,92,067/- against the Noticee under Section 11A of the Act in respect of Show Cause Notice C.No. V(48)15/CE/Ad)/15/2013/1441-43 dated 07.03.2013 after allowing the benefit of Cenvat credit of Rs.46,89,854/-. The amount confirmed is recoverable along with interest under Section 11AB/11AA of the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso requested for cross examination of the persons relied upon by the Revenue in the show cause notices. 2.2. Further, during the personal hearing on 27.11.2013, the Ld. Counsel for the appellant again prayed for cross examination of the persons whose statements were relied upon in the show cause notices and also requested to provide them the copy of the report of the chemical examiner but the same was not given and the matter was adjudicated by the Commissioner vide Order-in-Original dated 30.01.2014 of which the above mentioned four duty demands totaling Rs. 2,63,30,440/- were confirmed along with interest, and penalty of equal amount under Section 11AC was also imposed on them. Aggrieved by the said order, the appellant has filed the present appeal. 3. Heard both the parties and perused the relevant material on record. 4. Ld. Counsel appearing on behalf of the appellant submits that impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the binding judicial precedents on identical issue. He further submits that the main dispute in the instant case is as to whether mixture of Melamine & Formaldehyde and Phen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (SC). -2013(291) ELT 91 also referred. * That the adj. authority has even ignored the test and report obtained by the appellant of the same product from Indian Plywood Industries Research and Training Institute. * That otherwise also the mixture of Melamine and Formaldehyde which is in liquid form, by no stretch of imagination can be treated to be either Plastic or article of plastic‟. * That the mixture of Melamine and Formaldehyde is not complete product rather the same remains as incomplete / semi-finished product specially that the same does not contain any additives / retarder such as Hydrochloric Acid (HCL), DEG, Caprolactam, Sulphonic Acid / other hardeners, * The product attains the finality only after adding these additives. * That the mixture of Melamine & Formaldehyde is undertaken as per the requirement for use in mfre of laminates. No chemical preservatives/ retarder is added. * That the additives/ retarders are not required being the mixture is used immediately in the manufacture of laminate sheets. * That the mixture is unstable and that they have not been using/ adding any additives/stabilizer so as to make it as complete product specially that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mean that all goods falling under these headings are covered therein. * The objection would have been justified only if the description in the Negative list contains all goods falling under Heading 39.09 to 39.15 * That the duty of Excise is payable only on removal of goods from the factory and the same cannot be demanded at the intermediate stage. * There is no provision in CE Act/ Rules to consider the goods used in the same factory for further manufacture to be removal from the factory. * The provisions of Rule 4 of the CE Rules as well as 8 are being referred which provides that the duty of Excise is payable at the time of removal only whereas in this case there is no removal rather removal is of laminates which is duly covered under the exemption as provided under Notfn. 50/2003-CE. * That when the mixture of Melamine and Formaldehyde does not fall under the negative list then there is no question of either denying the benefit of Notin. 50/2003-CE or demanding any duty on the same. 5. As regards the limitation, Ld. Counsel for the appellant made the following submissions: That the major part of the demand (upto December 2010) is hit by the bar of limitation sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o manufacture laminates fall substantially under Chapter 3909 which is specified in the Annexure of Negative List at S.No. 20 of the Notification No. 50/2003-CE and hence the same is not entitled to the exemption and accordingly demanded the duty of the same by invoking the extended period of limitation. 6.2 He further submits that the decisions of the Tribunal relied upon by the appellant have not adequately discussed the issue of classification and has wrongly relied upon the office memorandum dated 01.06.2012 issued by the Ministry of Chemical and Fertilizers, Department of Chemical, Government of India which has wrongly described the main product to fall under ITC HS COD 3506 rather than ITC HS COD 3909. He further submits that this issue may be referred to Larger Bench for its final decision. He further submits that all the decisions relied upon by the appellant has relied upon the office memorandum issued by the under- secretary of the Government of India, Ministry of Chemicals and Fertilizers which is in respect of Adhesive/glue based on Phenol formaldehyde (PF) urea formaldehyde (UF), Melamine formaldehyde (MF) and it is in respect of the products in question i.e. Melamin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice and confirmed the demand by invoking the extended period of limitation. 9. Further, we find that the only issue involved in the present case is as to whether the mixture of Melamine Formaldehyde Resin and Cardanol Phenolic Formaldehyde used as Adhesive/Glue/Resin for the manufacture of final product, namely, laminates are classifiable under Chapter 35-06 as claimed by the appellant or under Chapter 39-09 as alleged by the Department. Further, we find that this issue has been examined and considered in various decisions relied upon by the appellant cited (Supra) wherein the identical issue was involved and the Tribunal has held that the mixture of aforesaid items used as Glue/Resin/Adhesive in the manufacture of laminates are classifiable under chapter heading 35-06. In this regard, it is pertinent to mention the decisions in the case of Virgo Industries Vs. Commissioner of Central Excise, Chandigarh reported in 2020 (371) E.L.T. 781 (Tri.-Chan.) wherein the identical issue was involved and the Tribunal after considering the submissions of both the parties has held as under: 6. On hearing both the sides, we find that of Controversy is that whether the resins capti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant are same with that of the various manufacturers from the website without any evidence. Similarly, referring to the manufacturer M/s. Akolite Synthetic Resins, Mangalore, the learned Commissioner have erred in observing that in view of this li cense granted to them by BIS who are manufacturers and sellers of various resins in the market. Accordingly, the resins manufactured by the appellant are also marketable. We also find that the learned Commissioner have erred in observing that as similar goods have been advertised on the web- site by various manufacturers, then market must exist there. As the goods have been advertised then they are capable of being bought and sold. We find that learned Commissioner have erred in holding that the appellant's goods are also capable of being bought and sold without any chemical composition comparison along with competitive shelf life study. Further, reliance placed by the learned Commissioner on the Ruling of GM Laminates Pot. Lid. v. CCE reported in 1996 (87) E.LT. 197, wherein this Tribunal had observed we also find that under the new Central Excise Tariff, the product can merit classification under sub-heading 3909, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not been examined and therefore the correctness of comparison cannot be upheld. Accordingly, we find that the impugned or- der is bad and fit to be set aside". 5. Following the above decision of the Coordinate Bench in the appellant's own case, we set aside the impugned order and allow the appeal. The miscellaneous applications connected to this appeal are also disposed of. 11. Further, in the case of Greenlam Industries Vs. CCE & S.T. Chandigarh I in appeal No. E/52016/2014 vide Final Order No. 62026/2017 dated 24.07.2017 considered the identical issue and relied upon the ratio in the case of Shirdi Industries Ltd. Vs. Commissioner of C.Ex. Meerut and by following the judgments of the Coordinate Bench held that the main goods are outside the purview of Chapter 39. Further, in the case of Balalji Action Buildwell Vs. Commissioner of C.Ex. Meerut-II reported in 2016 (332) E.L.T. 367 (Tri.-Del.), the Tribunal has observed as under: "14. On examining scope of CETH 3909 read with Chapter Note 6 and HSN explanation the product in dispute being not in Primary Form of such na- hure mentioned therein (requiring curing, etc.) is not to be classified under such heading. The exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order which mentioned the product as "MF Resin Reactor". The appellants have contended that there are various types of equipments and machineries available for use in their type of industry. The suppliers of machinery made visits and had detailed discussions. thereafter the decision was to supply equipments of description appearing in their invoices of March, April, August and September, 2009. The details of description in these invoices were also relied upon in the show cause notice and it is apparent that the description of equipments supplied by Alex Engineering Works were different in name and nomenclature from the purchase order. We find that the support cannot be drawn by the Revenue on the basis of description in the purchase order when the supply invoices indicate the nature of goods supplied. 18. We find that the appellant have been consistently taking the plea that they are engaged in the manufacture of Prepared Glue containing Ammonium Cloride/Formic Acid, etc., in the Kettle installed in Shed-B and the glue pre- pared is transferred to other Sheds-C, D and E where it is used for bonding of their final products. Preparation of glue in Shed-B is a one stage process. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er : "5. In the instant case the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd. (supra) cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary." 13. Further, we find that the impugned order is contrary to CBEC Circular No. 464/30/99-CX., dated 30-6-1999 and the said circular is reproduced herein below: "This is with reference to manufacture of particle boards (plain and prelaminated) made from sugar cane bagasse and other agricultural wastes. During the process of manufacture specially developed binders and mixed with the agricultural residues like dried sugar cane bagasse. These binder/resin/glues are specifically developed and made by the industry only for captive consumption and not for external sale. These binders have a very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in 1995 (76) E.L.T. 241 (S.C.) wherein the Hon'ble Apex Court in para 7 has held as under : "7. The duty of excise being on production and manufacture which means bringing out a new commodity, it is implicit that such goods must be useable, moveable, saleable and marketable. The duty is on manufacture or production but the production or manufacture is carried on for taking such goods to the market for sale. The obvious rationale for levying excise duty linking it with production or manufacture is that the goods so produced must be a distinct commodity known as such in common parlance or to the commercial community for purposes of buying and selling. Since the solution that was produced could not be used as such without any further processing or application of heat or pressure, it could not be considered as goods on which any excise duty could be levied." 16. Further, we find that the decision relied upon by the Ld. DR cited (Supra) are not directly applicable in the facts and circumstances of the present case and the decisions relied upon by the Ld. Counsel for the appellant cited (Supra) are squarely applicable in the facts and circumstances of the present case. 17. As re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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