Final Order No. A/101/2011-WZB/C-II/EB, arising from in Appeal No. E/469/2007. Case: Bombay Dyeing & Mfg. Co. Ltd. Vs Commissioner of C. Ex., Raigad. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Final Order No. A/101/2011-WZB/C-II/EB, arising from in Appeal No. E/469/2007 |
| Counsel | For Appellant: Shri M.H. Patil, Advocate And For Respondent: Shri Manish Mohan, Sdr. |
| Judges | Shri Ashok Jindal, Member (J) and P.R. Chandrasekharan, Member (T) |
| Issue | Central Excise Act, 1944 - Section 11a |
| Citation | 2011 (268) ELT 401 (Tri - Mumbai) |
| Judgement Date | January 27, 2011 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
Ashok Jindal, Member (J), (West Zonal Bench, Mumbai)
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By The Above Appeal, The Appellants Have Challenged Order-In-Original No. 34 Ms(23)Commr/Rgd/06-07 Dated 17-1-2007, By Which Ld. Commissioner Has Confirmed Duty On Dmt-Residue For The Period March, 1986 To Feb., 2005 (Except For August, 1991 To December, 1991), Holding It To Be Marketable. The Demand Is Confirmed By Invoking Comparable Sales Price Of Ipcl-Baroda Of Rs. 150/- Per Mt And Also Invoking Extended Period, Holding That Emergence Of Dmt-Residue And Its Quantum Was Not Shown In Rg-1 And Rt-12 Returns. Ld. Commissioner Also Imposed Penalties Under Section 11ac For The Period August, 1996 To Feb. 2005 And Under Rule 173q Of Cer, 1994, Over And Above Ordering Interest Under Section 11ab.
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The Facts, Succinctly, Could Be Summarized As Under:
(A) The Appellants, During The Material Period, Were Engaged In Manufacture Of Dimethyl Terephthalate (Dmt) Falling Under Chapter 29 Of The Schedule To Ceta, 1985. During The Course Of Manufacture Of Dmt, There Arises Waste Known As Dmt Residue.
(B) As Early As On 22-4-1985, The Appellants Informed The Dept. Of Such Emergence Of Dmt-Residue And Enquired Whether They Were Required To Take License, As, Such Residue Was Not An Excisable Product And Was Also Not Sold, But Was Destroyed By Using As Fuel In Boiler, Along With Other Inputs. On The Basis Of Advice Of The Dept., The Appellants Submitted Application For L-4 Licence On 27-4-1985 And L-4 Licence Was Issued To Them. The Sample Of Dmp Residue Was Also Drawn For The Test Purpose By The Dept. On 25-7-1985. The Supdt., By Letter Dated 25-4-1985, Also Had Clarified That Residue Obtained And Meant For Sale Would Be Covered Under Tariff Item 68 And Have To Follow The Procedure. The Appellants Did Not Pay Duty On Dmt - Residue, As The Same Was Not Cleared Outside The Factory, But Was Used Captively As Fuel In Furnace.
(C) However, Ld. Collector Of Central Excise, Bombay-Iii, By Notice To Show Cause Dated 2-4-1991, Demanded Duty, On Dmt. Residue For The Period 1-3-1986 To 31-3-1990. The Notice Did Not Allege Extraneous Grounds Like Suppression Of Facts, Willful Mis-Statement, Etc.
(D) By Defence Reply Dated 30-8-1991, The Appellants Resisted Said Notice On The Ground That Not Only Residue Was Not A Commercial Product For Demanding Duty, But Also Demand Would Be Barred By Limitation, In View Of Their Approaching The Dept. Voluntarily; Obtaining L-4 Licence; Drawal Of Sample By Dept., Etc.
(E) By Order-In-Original Dated 25-11-1991, The Proceedings In The Scn Dated 2-4-1991 Were Dropped, Holding That Dmt-Residue Was Not Marketable.
(F) In The Meantime, Eleven Notices To Show Cause Were Issued For The Period April, 1990 To March, 1995, Demanding Duty On Dmt-Residue And The Same Were Adjudicated By The Ld. Commissioner, Mumbai-Iii Vide Order-In-Original Dated 31-10-1995. Ld. Commissioner Confirmed The Demand Covered Under The Said Scns. However, He Held That Penalties Were Not Imposable, As There Was No Deliberate Intention On The Part Of The Assessee To Contravene The Provisions And/Or Not To Pay Duty.
(G) Both The Said Orders-In-Original Were Challenged Before Tribunal, Former One By The Dept. And Latter One By The Assessee. Latter Order-In-Original Dated 31-10-1995 Was Set Aside By The Hon''ble Tribunal, By Its Order No. 2391/96/Wrb Dated 1-7-1996 And Remanded The Matter To Commissioner For Fresh Adjudication, Holding That Dept. Should Make Available Evidence And The Basis Of Valuation And Marketability, As Notice Did Not Specify That Ipcl-Baroda Had Cleared Identical Goods On Payment Of Duty. Former Order-In-Original Dated 25-11-1991 Was Also Set Aside By Tribunal, Vide Its Final Order No. 75/2001-C Dated 18-5-2001, Following Its Earlier Judgment Dated 1-7-1996 (Supra) And Matter Was Remanded, In The Light Of The Above.
(H) In Remand, Ld. Commissioner, By Order-In- Original Dated 31-1-2006, Confirmed Demand For The Period March, 1986 To Feb., 2005, Holding Disputed Product As Marketable Based On Manufacture Of Same Dmt-Residue By Ipcl-Baroda. Ld. Commissioner Imposed Penalty Equal To Duty, Along With Interest.
This Order Was Challenged By The Appellants Before Hon''ble Tribunal, Being Appeal No. E/757/06.
(I) The Hon''ble Tribunal, By Its Order No. A/1032/Wzb/06/C-I/Eb Dated 5-5-2006, Again Set Aside The Order-In-Original And Remanded The Proceedings To Ld. Commissioner, With A Specific Direction That The Dept. Should Bring Evidence On Marketability From An Independent Market Enquiry And Decide Afresh, Considering The Law As Settled By Apex Court.
(J) In Remand, Ld. Commissioner, By Impugned Order-In-Original No. 34/Ms(23)Commr/Rgd/06-07 Dated 17-1-2007, Once Again Confirmed The Demand And Imposed Penalties Based On The Findings:
(I) That Ipcl-Baroda Have Accounted For Dmt-Residue In Their Rg-1 For The Period March, 1991 To May, 1998 And Have Cleared It On Payment Of Duty, Declaring The Value Of Rs. 150/- And Rs. 125/- Per Mt;
(Ii) That The Process Of Manufacture Of Ipcl And The Appellants Is Similar And The Same Would Substantiate The Stand That The Disputed Product Is Marketable;
(Iii) That Although Appellants Had Filed Classification List For Dmt - Residue, Mentioning No Commercial Value, They Were Not Accounting The Production In Rg 1 And Were Also Not Showing The Same In Rt-12 Returns And, Hence, Extended Period Is Invocable;
(Iv) That Comparable Sales Price Of Ipcl-Baroda Would Apply For Valuation.
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The Appellants Are In Appeal, Challenging The Impugned Order Of Ld. Commissioner And Claiming That Disputed Product (Dmt-Residue) Was Not Marketable; That Dept. Did Not Conduct Any Independent Market Enquiry To Substantiate Marketability, As Per The Direction Of Hon''ble Tribunal; That Evidence Of Ipcl-Baroda Was Already There Even Before The Hon''ble Tribunal; That In The Absence Of Any Suppression, Mis-Declaration Etc. Whatsoever, Major Portion Of The Demand Is Barred By Limitation; That Penal Provisions Also Would Not Get Attracted, Etc.
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The Ld. Advocate, Appearing For The Appellants, Made The Following Submissions:
(A) That Although There Are Catena Of Judgments To Substantiate That The...
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