9911796707
TMI Blog2024 (10) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL ) And HON BLE Mr. P. ANJANI KUMAR , MEMBER ( TECHNICAL ) Sh. Mukul Singla , Advocate for the Appellant Sh. Narinder Singh and Sh. Yashpal Singh , Authorized Representatives for the Respondent ORDER PER : S. S. GARG These four appeals are directed against two impugned orders passed by the Commissioner (Appeals), Panchkula, first dated 14.07.2020 in respect of M/s Shri Ram Agro Chemicals Pvt Ltd and its director Sh. Amit Jain; and second dated 15.07.2020 in respect of M/s Sandley Industries and its director Sh. Rakesh Kumar Sharma, vide which the appeals of the appellants were rejected and decision of lower authority was upheld. Since the issue involved in all these appeals is identical, therefore, all four appeals are taken up together for discussion and decision. For the sake of convenience, we may take the facts of the Appeal No. E/60370/2020 in the case of M/s Ram Agro Chemicals Pvt Ltd. 2.1 Briefly stated facts of the present case are that the appellant is engaged in the manufacture of Zinc Ingots and Zinc Sulphate fertilizer falling under Chapter Heading No. 7901 and 2833 of the Central Excise Tariff Act, 1985. The officials of DGGI on the basis of intelligence initiated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was non-excisable, therefore, there was no legal requirement to issue invoice for captive consumption and as such no duty was required to be paid. The payment of duty through Cenvat account on clearance of Zinc Ash as such or captive consumption was contrary to law in force. An invoice can be issued only when right to ownership is transferred between two legal persons but in the present case transaction was not between two legal persons nor any right to ownership was transferred. The invoice for captive consumption was not a valid transaction and appellant could not have issued it. Therefore, when the goods were not removed from the premises of the manufacturer, no Central Excise Duty was required to be paid. The duty on Zinc Ash was paid from Cenvat account so as to encash their Cenvat by passing on the incidence to their final buyer and also justify/avoid the reversal of Cenvat Credit. 2.4 Further, as per Circular dated 25.04.2016, Zinc Ash and Skimming are non-excisable goods and need to be treated as exempted goods for the purpose of reversal of credit of input or input services in terms of Rule 6 of the Cenvat Credit Rules, 2004. The appellant did not avail option under Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submits that this issue is no more res integra as the same has been settled by this Tribunal in the case of Mahesh Chemicals Allied Industries (cited supra). 5. On the other hand, the learned Authorized Representative for the department reiterates the findings of the impugned order. 6. We have considered the submissions made by both the parties and perused the material on record. We find that this Tribunal in the case of Mahesh Chemicals Allied Industries (cited supra) has considered the same issue in details and after considering the same, this Tribunal has allowed the appeal of the appellant-assessee. It is pertinent to reproduce the relevant findings of the Tribunal in the case of Mahesh Chemicals Allied Industries (cited supra), which are reproduced herein below: 6. After considering the submissions made by both the parties and perusal of the material on record, we find that the entire proceedings in this case was initiated on the investigation conducted by the DGGI and the same was based on the judgment of Hon ble Supreme Court in the case of Union of India Vs. DSCL Sugar Ltd (supra) and subsequent Board Circular No. 1027/15/2016-CX dated 25.04.2016, wherein it has been clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th effect from 1.03.2015 by inserting Explanation 1 and 2 in sub-rule (1) of Rule 6, which provides that exempted goods or final product shall include non-excisable goods cleared for consideration from the factory. 3. Accordingly, Circular No. 1027/15/2016-CX dated 25.04.2016 was issued highlighting that Bagasse, Dross and Skimmings of non-ferrous metals or any such by-product or waste, which are non-excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of Rule 6 of the CENVAT Credit Rules, 2004. This circular was issued in the background of judgement of the Hon ble Supreme Court in the case of Union of India Vs. M/s. DSCL Sugar Ltd [2015 (322) E.L.T. 769 (S.C.)] holding that Bagasse is only an agricultural waste and residue and it is not a result of any process which can be termed as manufacture'. Similar conclusion was also drawn by the Hon'ble High Court of Bombay in the case of M/s Hindalco Industries Ltd. Vs. Union of India [(2015 (315) E.L.T.10 (Bom.)] in relation to dross and skimming of aluminium, zinc or other non-ferrous metals. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking the extended period of limitation, the Hon ble Supreme Court has laid down the law from time to time. In this regard, it is pertinent to mention that : a) The Hon'ble Supreme Court has in the case of Padmini Products v/s Collector of C. EX. cited as 1989 (43) E.L.T. 195 (S.C.) held that unless there is evidence that the manufacturer knew that goods were liable to duty or he was required to take out a licence, intention to evade payment of excise duty cannot be alleged. For invoking extended period of five years limitation duty should not had been paid, short levied or short paid or erroneously refunded because of either any fraud, collusion or willful mis-statement or suppression of facts or contravention of any provision of the Act or Rules made thereunder. These ingredients postulate a positive act, therefore, failure to pay duty or take out a licence is not necessary due to fraud or collusion or willful mis- statement or suppression of facts or contravention of any provisions of the Act. b) The Hon'ble Supreme Court has in the case of Collector of Central Excise v/s Chemphar Drugs Liniments cited as 1989 (40) E.L.T. 276 (S.C.) held that extended period of five year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty has bonafide belief that goods in question are not dutiable. No suppression of facts or contravention with intent to evade payment of duty can be upheld in such case. As the appellant has not suppressed any material fact from the department with intent to evade payment of tax and was subject to internal audit from time to time as cited above; therefore, invoking extended period of limitation is not warranted. Further, in the present case, the period involved is from March 2015 to June 2017 whereas the show cause notice was issued on 20.05.2019, which is entirely time barred. 11. In view of our discussion above and by following the ratio of the judgment of Hon ble Apex Court in the case of Union of India Vs. Indian Sucrose Limited (supra) and further relying upon the subsequent Board Circular No. 1084/05/2022-CX dated 07.07.2022, we are of the considered opinion that the impugned order is not sustainable in law and is liable to be set aside and we do so by allowing both the appeals of the appellant with consequential relief, if any, as per law. 7. By following the ratio of the decision of the Tribunal in the case of Mahesh Chemicals Allied Industries (cited supra), we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
