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TMI Blog2025 (1) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... e the benefit of said Notification would not be available to them, and they are required to pay central excise duty on the finished goods - the demand has been confirmed against the Appellant without allowing the benefit of the duty already paid by them by treating PPMFY as excisable goods. The quantum demand confirmed needs to be worked out after making adjustment for the duty already paid.
Conclusion - The demand for excise duty on the final product, Narrow Woven Fabric, due to the appellant's availing of CENVAT credit on inputs upheld. The penalty imposed under Section 11AC(1)(a) was set aside.
Matter is remanded for re-quantification of the demand of duty, giving credit of the duty already paid - appeal allowed by way of remand. X X X X Extracts X X X X X X X X Extracts X X X X ..... 1AA of the Central Excise Act, 1944; (iii) Penalty should not be imposed upon them under Section 11AC of the Central Excise Act, 1944 for reasons detailed here-in-above 2.4 This Show Cause Notice was adjudicated as per Order-In-Original referred in Para 01 above. 2.5 Aggrieved Appellant has filed the Appeal before the Commissioner (Appeals) which has been dismissed by the impugned order referred in para 1 above. 2.6 Revenue also filed appeal before the Commissioner (Appeals) and by allowing the said appeal a penalty as indicated in para 1.2 above has been imposed upon the Appellant. 2.7 Aggrieved Appellant has filed the present appeal. 3.1 We have heard Shri Amit Awasthi, Advocate appearing for the Appellant and Shri Manish Raj Authorized Representative, appearing for the revenue. 3.2 Arguing for the Appellant learned counsel submits that:- * earlier a Show Cause Notice was issued to the Appellant demanding duty on the intermediate product PPFMY which arises during the course of manufacture of the finished products. * The said Show Cause Notice was adjudicated by the Commissioner vide the Order-In-Original No.16/Commissioner/2011 dated 29.07.2011 confirming the demand a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers conferred by sub-section (1) of section SA 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.07/2003-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 the goods in respect of which credit of duty on inputs or capital goods has been taken under the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d present show cause notice dated 08.03.2018 by demanding central excise duty on the sale value of finished product ie Narrow Woven Fabric after adjusting the duty paid on intermediate products i.e PPMFY. 5.4 I find that in the present case it was the appellant's claim that they have a composite unit having continuous manufacturing process and intermediate product ie PPMFY generated at this stage is inert-winded in a continuous process, the yarn threads are still open with oil contact and are not even open at the stage of being coned or paper coned or paper tuned and still the said product are bound in loose form in bobbins which has to undergo subsequent operations and the product is in semi-finished form, therefore, cannot be marketed in any manner, thus, no duty is payable on the same. I find no substance in the argument of the appellant that they have taken CENVAT credit on inputs which are used in the manufacturing of intermediate product MMPFY on which they have paid duty and they have not taken credit of duty paid on said MMPPY which is input for final products inasmuch as it is on record & accepted by the appellant too, that in a continuous process intermediate produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of duty or where the exemption from the whole of the duty of excise leviable is granted on any of the six categories enumerated, the manufacturer is required to make a declaration and give an undertaking, as specified in the From annexed while claiming exemption for the first time under this Notification and thereafter before the 15th day of April of each financial year. As found by the forums below, including CEGAT, factually, the declaration and the undertaking were not submitted by the appellants. This is not an empty formality. It is the foundation for availing the benefits under the Notification. It cannot be said that they are mere procedural requirements, with no consequences attached for non- observance. The consequences are denial of benefits under the Notification. For availing benefits under an exemption Notification, the conditions have to be strictly complied with. Therefore, CEGAT endorsed the view that the exemption from operation of Rule 174, was not available to the appellants. On the facts found, the view is on terra firma. We find no merit in this appeal, which is, accordingly, dismissed" 5.5.1 I also observe that in the case of CCE, Chandigarh Vs. Saboo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has held as under: "5. We have heard the rival submissions. We have also perused the case-law cited by the learned representative of the company as also the learned DR. We also note that in terms of Clause 4 of Notification No. 9/99-CE Procedure under Chapter X was to be followed. The admitted position was that Chapter X Procedure was not followed in the instant case. We have seen the ruling of the Apex Court in the case of CCE, Ahmedabad v. Cadila Laboratories (P) Ltd. cited above. We note that even though the benefit of exemption under Notification No. 9/99-CE in terms of Clause 4 accrues to the assessee the law enjoins that procedure stipulated in Chapter X had to be followed. Since the procedure was not followed by the appellant the benefit of Notification No. 9/99 was not available to the assessee. Having regard to the ruling of the Apex Court in the case of Cadila Laboratories (P) Ltd. cited above we hold that benefit under Notification No. 9/99 has rightly been denied." 5.5.3 It is further observed that the Hon,ble Supreme Court in the case of State of Jharkhand & Others Vs Amey Cements & Anr. [2004 (178) ELT 055 (SC)] held that it is a cardinal rule of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the order of the Tribunal in Appellant's own case as per Order dated 25.01.2018 wherein following has been held:- 6. Having considered the rival contentions and perusal of records, we find that the appellants unit is a composite unit and doing continuous manufacturing process wherein spinning of semi-finished PPMFY is being done followed by subsequent process like stretching, winding, warping and braiding is done on a needle loom. We also find that PPMFY in the stage it is generated is not marketable, being integrated and inter-winded in a continuous process, the yarn threads are still open with oil contact and are not even open at the stage of being coned or paper coned or paper tubed and still the said product are bound in loose form in heavy iron bobbins which still has to undergo subsequent operations and the product is in semi-finished form. We find that, the said PPMFY cannot be marketed in any manner, therefore, fails the test of marketability. Our view is supported by the decision of Hon'ble Supreme Court of India in the case of Bata India Ltd. vs CCE, [2010 (252) ELT 492 (SC) and also of this Hon'ble Tribunal in the case of Rishi Baker vs. CCE, Kanpur [2015 (328) E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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