Customs, Excise and Gold Tribunal - Delhi
Hari Chand Shri Gopal, Gopal Zarda Udyog ... vs Cce on 7 July, 2003
Equivalent citations: 2003(90)ECC75, 2003ECR622(TRI.-DELHI), 2003(160)ELT1098(TRI-DEL)
JUDGMENT S.S. Kang, Member (J)
1. Appellants filed these appeals against the common adjudication order whereby the duty was confirmed in respect of 'Kimam' manufactured by them and penalties were imposed. The goods which were taken into possession were also confiscated and allowed to be redeemed on payment of redemption fine.
2. Brief facts of the case are that appellants are manufacturer of Kimam and were clearing the same without payment of duty to their other Units where it was used in the manufacture of Branded Chewing Tobacco. The Branded Chewing Tobacco was cleared on payment of duty. Show cause notices were issued to the appellants for demand of duty in respect of Kimam and for imposing penalties and for confiscation of the seized Kimam.
3. The adjudication authority confirmed the demands and imposed the penalties. The seized goods were also confiscated.
4. The appellants filed appeals before the Customs, Excise and Gold (Control) Appellate Tribunal and the Tribunal vide Final Order No. 846-851/99-D dated 1.10.99 upheld the impugned order regarding demand of duty in respect of Kimam after rejecting the contention of the appellants. However, the Tribunal remanded the mater to the adjudicating authority regarding the eligibility of appellants under Notification No. 121/94-C.E.(NT) dated 11.8.94.
5. On remand, the adjudicating authority passed the present impugned order on the ground that the appellants are not entitled for the benefit of Notification No. 121/94-CE(NT) dated 11.8.94 on the ground that they had not followed the procedure laid down under Chapter X of the Central Excise Rules and also not fulfilled the other conditions of the notification.
6. Heard both sides.
7. The contention of the appellants is that the Tribunal while remanding the matter to the adjudicating authority after relying upon the decision of the Hon'ble Supreme Court in respect of Thermax Private Ltd. Vs. Collector of Customs, reported in 1992 (61) ELT 352 (SC) and the decision of the Tribunal in the case of Gujarat Paints & Allied Products Co. Vs. Collector of central Excise, reported in 1993 (68) ELT 644 (Tribunal) held that the substantial compliance is shown regarding receipt of utilization of the input material then the rigours of Chapter X Procedure could be diluted in the interest of justice. The contention of the appellants is that Revenue had not filed any appeal against this finding of the Tribunal, hence these findings become final.
8. The appellants also submitted before the adjudicating authority that they had produced the documentary evidence to prove that the entire quantities of Kimam were transferred from one Unit to their other Unit and the entire quantities were received in the other Unit and the same were utilized in the manufacture of Branded Chewing Tobacco which were cleared on payment of duty. The appellants had produced the transfer Challans under which the 'Kimam' was transferred to the other Units. They also produced Form IV Register/Stock Register regarding receipt of the Kimam in the other factory where Branded Chewing Tobacco was manufactured. The contention of the appellant is also that in the show cause notice it is admitted by the Revenue that Kimam manufactured by the appellants removed to their other factory for consumption in the manufacture of Branded Chewing Tobacco. The appellants relied upon the decision of the Hon'ble Supreme Court in the case of Thermax Private Ltd. Vs. Collector of Customs (Supra). The learned Counsel also submitted that Hon'ble Supreme Court again in the case of Collector of Customs, Bombay Vs. J.K. Synthetics Limited, reported in 1996 (87) ELT 582 reiterated the view taken in the case of Thermax Private Ltd. Vs. Collector of Customs (Supra).
9. The contention of the Revenue is that appellants had not fulfilled the condition of the Notification No. 121/94-CE Dated 11.8.94. The notification provided that the benefit is available subject to following the procedure set out in Chapter X of the Central Excise Rules and this procedure was not followed by the appellant.
10. We find that the Tribunal while remanded the issue regarding eligibility of the appellants under Notification No. 121/94-CE dated 11.8.94 specifically held that if substantial compliance is shown regarding the receipt and utilization of the input material then the rigours of Chapter X Procedure could be diluted in the interest of justice. The Tribunal relied upon the decision of the Hon'ble Supreme Court in the case of Thermax Private Ltd. Vs. Collector of Customs (Supra) and the decision of the Tribunal in the case of Gujarat Paints & Allied Products Co. Vs. Collector of Central Excise, reported in 1993 (68) ELT 644 (Tribunal). The adjudicating authority had to examine the issue in the light of the above discussions. Before the adjudicating authority, the appellants produced all the documentary record maintained by them in respect of manufacture of Kimam in question in their one Unit and to the clearance to the other Unit for use in the manufacture of Branded Chewing Tobacco. It is not the case of the Revenue that this evidence is not true. The Revenue rejected the contention of the appellants only on the ground that they had not followed the procedure laid down under Chapter X of the Central Excise Rules. We find that as the appellants were clearing the goods under the impression that these are not excisable goods, therefore, the necessary permission or other procedures which were laid down in the notification was not followed by the appellants. In the present case, the appellants produced the evidence which is admitted by the Revenue in Show Cause notice to show that the Kimam manufactured by them was transferred to their other Unit which was used in the manufacture of their final product which cleared on payment of duty.
11. We find as in the case of Collector of Customs, Bombay Vs. J.K. synthetics Limited (Supra), Hon'ble Supreme Court held that the exemption of duty on the goods used for industrial purpose under Chapter X cannot be denied, if substantive condition of intended use of material had been established. The Hon'ble Supreme court followed the earlier decision the case of Thermax Private Limited Vs. Collector of Customs (Supra). In the case of Thermax Private Limited (Supra), the Hon'ble Supreme Court after relying upon the Circular issued by the Board held that benefit was not to be deniable if substantive condition of an intended use as per exemption notification was satisfied, through procedural condition of Chapter X was not complied with.
12. In the present appeals, the Revenue is not disputing the fact that Kimam in question is used in the manufacture of Branded Chewing Tobacco in the other Unit of the appellants. Therefore, the appellants are entitled for the benefit of Notification No. 121/94-CE dated 11.8.94. The impugned order is set aside and the appeals are allowed.