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TMI Blog2005 (10) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... - S.N. Variava, Dr. A.R. Lakshmanan and S.H. Kapadia, JJ. [Judgment per : S.H. Kapadia, J.]. - The short question of law involved in this matter is - whether irrespective of the assessees having not followed or substantially followed Chapter X procedure under the Central Excise Rules, 1944, they would still be entitled to the benefit of Notification No. 121/94-C.E., dated 11-8-1994 as held in the case of Thermax Private Ltd. v. Collector of Customs reported in 1992 (61) E.L.T. 352, which is to the effect that, the benefit of concession should be given when intended use of material can be established by other evidence. 2.This case is a sequel to the case of the assessees in Civil Appeal Nos. 5747-5749 of 2000 decided by this Court on 30-9-2005 and, therefore, we are not required to restate the facts. Suffice it to state that the assessee-firms were manufacturer of branded chewing tobacco (final product) from "'additive mixture" (kimam). The said "kimam" was manufactured by the units of the assessees in Delhi and the said kimam was stock transferred to the assessees' units in UP and HP. We have held in our judgment in Civil Appeal Nos. 5747-5749 of 2000 that this kimam wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified in Column (4) of the Table hereto annexed (hereinafter referred to as "inputs") manufactured in a factory and used within the factory of production in or in relation to the manufacture of corresponding final products of the description specified in Column (2) of the said Table and falling under heading numbers or sub-heading numbers of the Schedule to the said Tariff Act, specified in the corresponding entry in Column (3) of the said Table, from the whole of the duty of excise and additional duty of excise leviable thereon, which is specified in the respective Schedules to the said Tariff Act and the said Special Importance Act : Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zone or to a 100% Export-Oriented Undertaking or to a unit in Electronic Hardware Technology Park or Software Technology Parks), which are exempt from the whole of the duty of excise leviable thereon or are chargeable to 'Nil' rate of duty : Provided further that where such use of inputs is in a factory of a manufacturer, different from his factory wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration within thirty days of commencing the production of such excisable goods. If in the declaration so filed(2) under sub-rule (1), any alteration becomes necessary in respect of any goods because of - (a) the assessee commencing production, manufacture or warehousing of goods not mentioned in that declaration, or (b) the assessee intending to remove from his factory any non-excisable goods not mentioned in that declaration, or (c) a change in the rate of rates of duty in respect of the goods mentioned in that declaration or, by reason of any amendment to the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), a change in the Chapter, heading No. or sub-heading No., the assessee shall likewise file a fresh declaration or an amendment of the declaration already filed within thirty days of any alteration mentioned above, in the same manner as is provided in sub-rule (1). (3)The proper officer, duly empowered by the Central Government under Section 14 of the Act, may, where he considers it necessary during the course of any enquiry in connection with the declaration filed under sub-rule (1) by an assessee, - (a) require any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds payment of duty; (iii) in respect of clearances of any excisable goods as samples in such small quantities as the Commissioner may approve in respect of any commodity and clearly marked as such on the invoice, the assessee may pay the duty on all such samples cleared during a month by a single debit to his account-current on the last working day of the month; (iv) the Commissioner may, in circumstances of an exceptional nature, by an order in writing, require an assessee or class of assessees manufacturing or warehousing goods to which provisions of Chapter VII-A have been made applicable, to determine the duty and debit the account-current in such manner as may be specified by him in such order : Provided further that where any assessee manufactures or warehouses excisable goods falling under two or more Chapters of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), he may opt to maintain a single account-current for payment of duty due on all such goods after intimating the proper officer : Provided also that where an assessee maintains separately accounts-current for each excisable goods he may, in the event of un insufficient balance in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods, such correction may be made by the assessee provided this is done neatly and over his dated signature in all copies of the invoice; and (vii) where the assessee, after he has debited the duty due on the goods in the account-current referred to in sub-rule (1), finds it necessary to cancel any invoice, he shall send an intimation thereof in writing to the proper officer not later than the working day next following the day on which such invoice is cancelled, and may thereupon take credit of the duty in that account : (2A)Every assessee shall file with the proper officer the triplicate copies of the invoices or like documents issued, - (a) during first ten days of a month, on or before the twelfth day of the same month; (b) during the next ten days of the month, on or before the twenty-second day of the same month; and (c) during the remaining days of that month, on or before the fifth day of the following month, along with a covering list showing the serial number of such invoices as well as opening balance, credit, debit and closing balance in his account-current and in his account maintained in Form RG 23A Part II and Form RG 23C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the nature, variety and extent of production or manufacture or frequency of removals - (i) fix in relation to any assessee or class of assessees a period shorter than one month for filing the aforesaid return; (ii) permit that the aforesaid return may be filed by the assessee within a period not exceeding 21 days after the close of each month. (4)(a)Every assessee shall maintain such accounts, as the Commissioner may from time to time require or permit, subject to such conditions as may be specified by him of the production, manufacture, storage, delivery or disposal of the goods, including the materials received for or consumed in the manufacture of excisable goods or other goods, the goods and materials in stock with him and duty determined and paid by him. Unless specially exempted by the(b) Commissioner by order in writing, all books of accounts maintained under Clause (a) shall be sent by him, before these are brought into use, for authentication by the proper officer in such manner and at such time as the Commissioner may direct. In respect of any assessee, or(c) class of assessees, the Commissioner may direct that all books of accounts mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as a broker or commission agent, holds private store-room or warehouse or otherwise uses excisable goods or a person who issues invoice or invoices under Rule 57G or, as the case may be, Rule 57T shall get registered and shall not engage in the curing, production, manufacture, trade, dealing as broker or commission agent, storing in private store-room or warehouse or use excisable goods without having applied for such registration to the jurisdictional range officer or such officer in such forms as may be specified by the Board. (2)The Central Board of Excise and Customs, may, by notification in the Official Gazette, and subject to such conditions or limitations as may be specified in such notification, specify person or class of persons from amongst the persons specified in sub-rule (1) who need not obtain such registration. (3)If there are more than one premises requiring registration he shall obtain separate registration certificate for each of the premises. (4)Every registration certificate granted shall be in the specified form and shall be valid only for the premises specified in such certificate. (5)Where a registered person transfers his business to another person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear the cost of such establishment as the Commissioner may consider necessary for supervising operation in his premises for the purposes of this Chapter, the Commissioner may grant the application, and the applicant shall then enter into a bond in the proper Form with such surety or sufficient security, in such amount and under such conditions as the Commissioner approves. Where, for this purpose, it is necessary for the applicant to obtain an Excise registration certificate, he shall submit the requisite application along with the proof for payment of registration fee and shall then be granted a registration certificate in the proper Form. The concession shall, unless renewed by the Commissioner, cease on the expiry of the registration certificate : Provided that, in the event of death, insolvency or insufficiency of the surety, or where the amount of the bond is inadequate, the Commissioner may, in his discretion, demand a fresh bond; and may, if the security furnished for a bond is not adequate demand additional security. Duty leviable on excisable goodsRule 196. not duly accounted for. — (1) If any excisable goods obtained under Rule 192 are not duly account for as having b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be read on its own terms [See : Commissioner of Central Excise, Allahabad v. Ginni Filaments Ltd. reported in 2005 (181) E.L.T. 145]. Under Rule 192, the responsibility for the payment of duty on the goods cleared under concession or exemption was transferred from the manufacturing unit to the buying/receiving unit. The person wishing to obtain the remission of duty was required to apply through the proper officer in the Form AL-6 and the proper officer had to grant licence to such persons in the Form L-6. Under Rule 196, if any excisable goods obtained under Rule 192 are not duly accounted for, then the duty had to be paid by the applicant i.e. by the person who applies for an AL-6 licence. Therefore, in case of default or misuse, the liability was on the user. Therefore, as stated above, whenever there is failure on the part of the buyer/user to account for the goods received resulting in short-payment, the liability is foisted on the buyers/users. It is this type of situation which stood covered by Rule 192 and Rule 196. In cases of contravention of Rule 192, the Tribunal took the view from 1989 onwards that Rule 192 was not mandatory and that sufficient compliance by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /concession was required to obtain 'L-6' licence as also registration certificate in the prescribed form. This has not been noticed by this Court in the case of Thermax Private Ltd. (supra). The point which needs to be emphasised is that when an assessee seeks exemption under a notification, which prescribes compliance of Chapter X, there is a linkage between levy of duty on one hand and the accountability of the goods received/used in the factory where final product is manufactured. Therefore, one cannot ignore strict compliance of the aforestated rules while claiming exemption under such notification. This is particularly relevant in cases where input relief is claimed on the basis of the captive consumption. Lastly, Thermax Private Ltd. (supra) and J.K. Synthetics (supra) were cases of the supplier being an importer and that the aforestated two decisions did not deal with cases of the present nature in which the supplier is the manufacturer. 6.Before concluding, we may refer to the judgment of this Court in the case of Eagle Flask Industries Limited v. Commissioner of Central Excise, Pune reported in 2004 (171) E.L.T. 296, in which one of the contentions raised on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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