Custom, Excise & Service Tax Tribunal
M/S. Mohindra Tubes Pvt. Ltd vs Commissioner Of Central Excise & ... on 9 August, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.E/368/2009
(Arising out of Order-in-Original No.08/COMMR/ADJ/CE/SLG/2009 dated 25.03.2009 passed by the Commissioner of Central Excise & Service Tax, Siliguri)
FOR APPROVAL AND SIGNATURE
Honble Shri H.K.Thakur, Member (Technical)
Honble Shri P.K.Choudhary, Member (Judicial)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s. Mohindra Tubes Pvt. Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise & Service Tax, Siliguri
Respondent (s)
Appearance:
Shri B.N.Chattopadhyay, Consultant for the Appellant (s) Shri A.Roy, Suptd.(AR) for the Respondent (s) CORAM:
Honble Shri H.K.Thakur, Member (Technical) Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing:-08.08.2016 Date of Pronouncement :- 08.08.20016 ORDER NO.FO/A/75771/16 Per Shri H.K.Thakur
1. This appeal has been filed by the appellant against Order-in-Original No. 08/COMMR/ADJ/CE/SLG/2009 dated 25.03.2009 issued on 13.03.2009, passed by the Commissioner of Central Excise & Service Tax, Siliguri as Adjudicating Authority.
2. Sri B.N.Chattopadhyay, Consultant appearing on behalf of the appellant argued that appellant is manufacturing Asbestos Cement pressure pipes (A C pressure pipes) containing fly ash as well as without fly ash. That when fly ash is used in the manufacturing of A C pipes then such pipes are termed as Pozzolona Pipes. That appellant is using more than 25% fly ash in the manufacturing of Pozzolona pipes which are exempted as per Sl. No.158 of the Exemption Notification No.06/2002-CE dated 01.03.2002. That appellant has fulfilled all the conditions prescribed under Condition No.36 of Exemption Notification No.06/2002-C.E. That appellant submitted specific letters alongwith monthly returns indicating the percentage of fly ash to be more than 25% and quantities of Pozzolona pipes manufactured and cleared. That on 23.08.2007 departmental officers drew sample from the Pozzolona pipes and got the same tested from IIT, Roorkee. That as per test report received from IIT, Roorkee, Uttaranchal, the percentage of fly ash by weight was less than 25% and accordingly appellant was issued show cause notice for disallowing the benefit of Notification No.06/2002-CE and also to include the value of these clearances for the purpose of Notification No.8/07-CE. Ld. Consultant argued that extended period before the date of drawal of sample on 23.08.2007 cannot be made applicable as appellant has given all the necessary information to the department.
3. Ld. Consultant relied upon larger bench judgment in the case of Pattani Chemicals vs.- Collector of Central Excise[1991(56) E.L.T.253(Tribunal) under which it has been held that sample test obtained by the department will have only prospective application. That this order passed by the larger bench was upheld by the Apex Court as per Collector of Central Excise, Rajkot vs.- Pattani Chemicals [1998(98) E.L.T.582(S.C.)]. He also relied upon the case law of BEE-AM Chemicals Ltd. vs.- Commissioner of Central Excise, Raigad [2004(167)E.L.T. 534(Tri.-Mumbai)].
4. Sri A.Roy, Suptd.(AR) appearing on behalf of the Revenue argued that appellant has not disputed the test report which gave percentage of fly ash in the Pozzolona pipes as 23.6% by weight and will be applicable to the entire period as appellants product is standard. Ld. AR strongly defended the order passed by the Adjudicating Authority.
5. Heard both sides and perused the case records.
6. The issue involved in these proceedings is whether the benefit of Sl.No.158 of the table annexed to Notification No.6/2002-CE dated 01.03.2002 can be extended to the Pozzolona pipes manufactured by the appellant. As per this exemption notification if percentage of fly ash by weight is more than 25% then the benefit of exemption notification is admissible to the appellant subject to the condition prescribed at Sl.No.36 of the conditions to exemption notification no.6/2002-CE. The sample was drawn on 23.08.2007 by the department and was got tested at IIT, Roorkee, Uttaranchal. Appellant has not contested the test report. However, it is the case of the appellant that any test report will have prospective application. Appellant has relied upon the case law of Pattani Chemicals vs.- Collector of Central Excise (Supra). In this case the product involved was Ordinary Portland Cement where a sample was drawn and sent to Chemical Examiner, Kandla. In this case the larger bench held that results of a test will have only prospective application. This order passed by the larger bench has also been upheld by the Apex Court. In the case of Hindustan Fibres Ltd. vs.- Commissioner of C.Ex., Jaipur [2009(245) E.L.T.337(Tri.-Del.)] also it was held that test report pertaining to a particular lot can be applied only in respect of material from which sample has been drawn and cannot be made applicable in respect of goods prior to such test. Ld. Consultant appearing on behalf of the appellant argued that test report can be made applicable only with effect from 23.08.2007. There is no statement from the appellant recorded by the department to the effect that process of manufacturing and mixing of ingredients has remained the same throughout the period of demand. In view of the above observations and settled proposition of law test report dated 13.10.2008 for the sample drawn on 23.08.2007 cannot be made applicable to the clearances before 23.08.2007. However, it is observed that declaration made by the appellant for the period from 23.08.2007 has not been found to be correct in as much as percentage of fly ash was less than 25%. Accordingly, demand raised for the period from 23.08.2007 is required to be confirmed, along with interest, and penalty under Section 11AC of the Central Excise Act is imposable. Since the duty demand from 23.08.2007 is not separately quantified in the proceedings and was also not made available to the bench by either sides, therefore, Adjudicating Authority is directed to quantify such amount of duty on A C pipes, claimed as Pozzolona pipes, for the period from 23.08.2007 till the end of demand period involved in these proceedings. For this purpose appellant should be given an opportunity to explain their case on quantification of demand and thereafter calculation of amount of penalty under Section 11AC will stand imposed upon the appellant on the re-determined duty demand. Appellant should also be given an option of paying reduced penalty under Section 11AC of the Central Excise Act. Interest on the above confirmed demand is also required to be paid by the appellant.
7. In view of the above, appeal filed by the appellant is allowed to the extent indicated herein above.
(Operative Portion of the order was pronounced in the open court.) S/d. S/d.
(P.K.Choudhary) (H.K.Thakur) MEMBER MEMBER (JUDICIAL) MEMBER(TECHNICAL) SS 1 Appeal No.E/368/09