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TMI Blog2024 (10) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... lities in his factory (including plant and equipment) for manufacture of filament yarns of chapter 54, from payment of whole of Central Excise Duty. Further, benefit of Notification is available to goods of Chapter 54 and 60 of Central Excise Tariff if credit of duty on inputs or capital goods has not been taken under the provisions of the Cenvat Credit Rules, 2002/2004. In the present matter Appellant claimed the all the manufacturing areas are to be treated as separate entity and we find support in claim of the Appellant. M/s. SPPL obtained Central Excise Registration dated 14.05.2004 for manufacture of POY falling under Chapter sub-heading No. 5402 42 and texturized yarn under chapter heading No. 540232. It is noticed that appellant vide their letter dated 21.02.2014 filed the application for amendment in their Central Excise Registration certificate they had submitted the new factory ground plan, in addition they had also filed online Application in Form A-1 on 21.02.2004. The Knitted Fabric falls under Chapter 60 and as per above entry it does not have any other condition except that the assessee should not avail the Cenvat credit on the input. In the case of knitted fabric, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Ld. Adjudicating authority in extending the benefit of price-cum duty is legally not correct. 1.1 Briefly stated, the facts of the case are that the assesse-appellant is inter alia, engaged in the manufacture of Polyester Partially Oriented Yarn (POY), Texturised Yarn, Draw Texturised Yarn, Grey Fabrics and Knitted Fabrics. The investigation conducted in subject matter revealed that during the period from 06.03.3014 to 22.03.2015, the assesse had manufactured and cleared the Texturised Yarn and Knitted Fabrics without payment of the Central Excise Duty leviable thereon. Further it was seen that appellant has been manufacturing texturised yarn leading to the production of grey and knitted fabrics on different floors of the same registered premises under one roof. During the course of investigation it was found that the appellant had on 21.02.2014 intimated the Jurisdictional officers to revise the declared ground plan of the factory building. Appellant claimed the exemption under Notification No. 30/2004-CE dated 09.07.2004 on clearances of texturised yarn and knitted fabrics. As per revenue the said notification is conditional and the exemption from payment of duty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed exemption but even before the issuance of SCN, the entire activity was duly informed to the department. Accordingly even the extended period could not have been invoked by issuing this SCN in 2019. 2.2 He further submits that the Panchnama dated 18.03.2015 and the statement of the Director of the Appellant dated 07.01.2016 as drawn during the investigation, clearly records that there are 3 separate buildings in the premises, which are undertaking separate manufacturing activities entirely. However in direct contradiction of this panchnama and statement of investigation the SCN wrongly recorded that the 3 units are located at one place only. Even the specific letter dtd. 26.11.2019 as written by the department, on a specific query of the Assistant Commissioner, clearly noted that all 3 units are separately located and unit 2 3, which are manufacturing and clearing Texturized yarn and knitted fabrics, do not have any facility to make POY at all nor have they claimed any credit of the duty paid on such POY used by them. 2.3 He also submits that this issue is also squarely covered by the Judgment and decision of tribunal in the case of Bhilosa Industries Pvt. Ltd. Vs. CCE, Surat rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2014 to 22.03.2015 by issuing the impugned show cause notice on 23.03.2019, when the appellant unit 1 was filing regular ER-1 returns about clearance of its entire POY under duty paid invoices to Unit 2 3. Equally the application made by the appellant dtd. 21.02.2004, both physically and online, in seeking to amend the registration certificate were duly filed by the Appellant prior to claiming exemption already. Further, this is not case of any suppression or clandestine removal, since the appellant was under the bona fide belief of being eligible to this exemption, having fulfilled all the conditions of Notification No. 30/2004-CE after duly intimating the department about its activities entirely. 2.8 Without prejudice, he also submits that assuming though not admitting that the appellant is to be denied this exemption, even then admittedly the amount of Rs. 8,08,91,469/- which is paid by Unit 1 of the 3 units, even if is considered as one factory as per the revenue, would be available as Cenvat credit. The SCN itself is issued to treat all units as one and denies exemption saying all units in one compound and different buildings is one factory, which means that duty paid upon P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Textiles and Textile Articles Effective rate of duty to specified goods of Chapters 50 to 63 In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 7/2003-Central Excise dated the 1st March 2003, published in the Gazette of India vide number G.S.R. 137(E), dated 1st March 2003, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specified in column (3) of the Table below and falling within the Chapter, heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table, from whole of the duty of excise leviable thereon under the said Central Excise Act : Provided that nothing contained in this notification shall apply to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subjected to any process by a manufacturer who does not have the facilities in his factory (including plant and equipment) for manufacture of filament yarns of chapter 54, from payment of whole of Central Excise Duty. Further , benefit of Notification is available to goods of Chapter 54 and 60 of Central Excise Tariff if credit of duty on inputs or capital goods has not been taken under the provisions of the Cenvat Credit Rules, 2002/2004. 4.3 We find that the Appellant claimed the exemption of above Notification on the ground that they were manufacturing POY in Building No.1 of the Factory, Textured yarn in Building No. 2 3 of the Factory and Knitted fabrics in Building 3 of the Factory. Appellant paid the Excise Duty amounting to Rs. 8,08,91,469/- on POY manufactured in Building No. 1 and cleared to Building No. 2 3 for manufacture of Textured Yarn and Fabric. In the present matter Appellant claimed the all the manufacturing areas are to be treated as separate entity and we find support in claim of the Appellant. M/s. SPPL obtained Central Excise Registration dated 14.05.2004 for manufacture of POY falling under Chapter sub-heading No. 5402 42 and texturized yarn under chapter he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of filament yarns of Chapter 54 All the above three expressions used in Notification No. 30/2004-C.E. have been interpreted differently by the Revenue and the appellants. According to Revenue, the yarns should be purchased by the manufacturer from outside. Further, revenue is also of the view that the word manufacturer used in Notification No. 30/2004-C.E. should be interpreted manufacturer as a legal entity and that the words in his factory should include all the factories of the manufacturer as a legal entity. Appellants on the other hand argued that words procured from outside used in the notification means that the yarn should have been obtained (whether purchased or not) from outside and the word manufacture should be the same factory/assessee to whom demand is issued. That accordingly the expression in his factory should be treated as the same factory . 9.3 It is observed from the wording of Notification No. 30/2004-C.E., as amended, that the same is an exemption notification issued under Section 5A(1) of the Central Excise Act, 1944. As per this Section Central Government may exempt excisable goods of specified description with respect to certain manufacturing activities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise law a manufacturer is the person who carries out the act of manufacture . 9.5 In the present proceedings the act of manufacture is being undertaken by the appellants factory to whom demand show cause notices are issued and each factory will make the person carrying out the activity of manufacture as the manufacturer . There is nothing in the definition of Section 2(f) to indicate that a legal entity only has to be considered as a manufacturer . Rather each assessee has to be treated as a manufacturer and not the entire group of companies as claimed by the Revenue. In the present proceedings also even the demands have been issued by the Revenue to the individual assessee carrying out the exempted processes and not to the head offices of the group companies as a legal entity. Therefore, we are of the considered view that the word manufacturer used in Sr. No. 6 of the Notification No. 30/2004-C.E. has to be interpreted as a unit where the act of manufacture is being undertaken which is the individual factory and not all the factories of a group of companies. 9.6 From the above analysis when the definitions of manufacture , manufacturer and factory ; as given in Section 2(f) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processing of fabrics with the aid of power and who has no proprietary interest in any factory engaged in the spinning of yarn of wool or weaving of woolen fabrics. 9.8 From the above expression No proprietary interest in any factory engaged in .. , used in Sr. No. 89 of Notification No. 6/2000-C.E., it is clear that legislature has the vision and skill to express as to what could be the intention of the words his factory . If the intention of legislature to interpret the words in his factory was also to include any other factory of the appellants, then legislature in the notifications has used the words like in any factory/factories of the assessee or no proprietary interest in any other factory or one or more factories etc. A view that the words in his factory means the same factory also gets fortified by Para 4.8.1 of DOF No. 334/3/2004-TRU, dated 8-7-2004 issued by JS(TRU), Ministry of Finance, which uses the word unit which can be only the manufacturing unit or a factory and not the all inclusive legal entity of a group of companies as claimed by the Revenue. 9.9 In the light of the above observations the words in his factory used in Sr. No. 6 of Notification No. 30/2004-C.E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chapter, heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table from whole of the duty of excise leviable thereon under the said Central Excise Act: Provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on [inputs] has been taken under the provisions of the Cenvat credit Rules,[2004] S. No. Chapter or Heading No. or Sub-Heading No. Description of Goods 15. 60 All goods 4.9 The Knitted Fabric falls under Chapter 60 and as per above entry it does not have any other condition except that the assessee should not avail the Cenvat credit on the input. In the case of knitted fabric, even though the unit No.1 availed the Cenvat credit but the excise duty on the POY was paid and such duty paid goods was subsequently used by unit No.2 3 but no Cenvat credit was availed on the POY. Therefore the situation becomes as for the manufacture of knitted fabric no Cenvat credit was availed on it s input which was cleared by unit No.1 on payment of duty. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries and paid duty of POY which was used in Texturized unit and Knitting division. It was further mentioned in the said letter that w.e.f. 23.03.2015, the Appellant had decided to merge Texturising Division and Knitting Division with POY division and that they would clear texturized yarn and grey fabrics on payment of duty. Appellant also claimed Cenvat credit in respect of stock of POY lying in stock as on 23.03.3015 covered by 17 duty paid invoices. . Therefore, claiming the exemption notification which was in the knowledge of the Revenue, the suppression of fact or mala fide on the part of the appellant cannot be attributed. Further the issue involved is clearly an interpretational issue of exemption notification. Therefore, in the peculiar facts as noted above there is no suppression of fact or mala fide intention on part of the appellant, therefore, the invocation of extended period is illegal and incorrect. Accordingly, the demand for the longer period is not sustainable on the ground of time bar also. The demand is set aside on merit as well as on limitation. 5. As per our above discussion and finding, the impugned order is set aside. In the result, the appeals filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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