Custom, Excise & Service Tax Tribunal
M/S Ajmer Food Products Pvt. Ltd vs Cce, Jaipur on 30 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. II DATE OF HEARING : 30/07/2015. DATE OF DECISION : 30/07/2015. Excise Appeal No. 4108 of 2010 [Arising out of the Order-in-Appeal No. 366 (CB) CE/JPR-II/2010 dated 11/10/2010 passed by The Commissioner of Central Excise (Appeals), Jaipur.] For Approval and signature : Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 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 would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Ajmer Food Products Pvt. Ltd. Appellant Versus CCE, Jaipur Respondent
Appearance Ms. Aparna Hirendagi, Advocate for the appellant.
Shri M.S. Negi, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No. 52429/2015 Dated : 30/07/2015 Per. B. Ravichandran :-
The appellant in the present case is engaged in the manufacture of Parle brand Cream Biscuits on job work basis. For use in the manufacture of Cream biscuits, they make cream within their factory by mixing ingredients like sugar, Vanaspati, milk powder, flavour etc. They have their own specifications for addition and mixing of ingredients for specific proportionate for different flavours like Choco, Orange etc. The dispute arose regarding the tax liability of such cream made by them and used captively in the manufacture of Cream Biscuits. Since Biscuits of MRP below Rs. 100/- per kg. were exempted the question of exemption under Notification No. 67/1995-CE for the Cream captively consumed has arisen. The proceedings initiated against the appellant resulted in order-in-original dated 24/12/2009 in which the original Authority confirmed the demand on Cream captively consumed and imposed equal penalty. On appeal the original order was upheld by the learned Commissioner (Appeals). Aggrieved by the said impugned order, the appellant is before us.
2. The main plea of the appellant is that the intermediate product Cream manufactured and used captively by them in the manufacture of Cream Biscuits cannot be subjected to Central Excise levy as they have very limited shelf-life of 24 hours after which they lose their softness and are required to be re-processed. Further, it was pleaded that their product is not capable of marketed as such Cream. The Department has failed to adduce any evidence regarding the marketability of the Cream. They also contested the excise levy on the ground that the impugned product is nothing but Mishthan or Mithai having such characteristics and are fully exempt under Notification No. 3/2006-CE dated 01/3/2006 at Sl. No. (29).
3. Heard both the sides and examined appeal records carefully. During the argument the learned Counsel for the appellant strongly contended that no evidence whatsoever has been discussed by the original Authority regarding marketability of the Cream manufactured by them. The general principal that the goods even if not marketed but otherwise marketable is also not categorically established. She has stated further that appellants on their part have produced statements and other evidences from the persons who are dealing such bakery products to establish that the Cream with specific formulation and flavour made by them is not known in the market and it is not generally brought and sold. On the other side, the Department did not counter this evidence and also did not produce any evidence to the effect of marketability of this product. The learned AR reiterating the findings of the lower authorities stated it is not necessary for the impugned goods to be marketed as such. The capability of the said goods to be brought and sold in the market will be sufficient for Central Excise purpose. He accepted that other than this general principle no additional evidence regarding the capability of the said goods to be bought and sold in the market or being known in the market as such has been discussed or established by the evidence by the lower authorities. We find in respect of the impugned goods it is necessary for the Department to establish the marketability (not necessarily actual sale of the very same goods made by the appellant). In this regard, the findings of the original authority is reproduced as below :-
I do not agree with the said contention of the assessee as there are several manufactured goods which are suitable for a particular user but that does not mean that it is not marketable and therefore cannot be subjected to Central Excise Duty. I find that the producer sugar based paste/cream manufactured by the assessee is marketable and therefore subject to the levy of Excise duty. In A.P. State Electricity Board vs. CCE, Hyderabad., 1994 (2) SCC 428 it was observed by the Honble Supreme Court that the goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purpose of Section 3. It is not necessary that the goods in question should be generally available in the market. Even if the goods are available from only one source or from a specified market, it makes no difference so long as they are available for purchasers. I therefore find that the cream manufactured by the assessee though it was not marketed by them but was capable of being sold in the market and is known in market. So I do not agree with the assessees contention that the Central Excise Duty was not leviable on the sugar based paste/cream captively consumed by them for the reason that it is not marketable/marketed by them.
4. As seen from the above except for the reliance on the Honble Supreme Courts observation regarding test of marketability no additional factors or evidence have been adduced with reference to the impugned goods. No test has been carried out regarding the shelf-life, the capability of storage, the availability of market for such goods and evidence to the effect that such similar products are known in the market for trading. The reasoning of the learned Commissioner (Appeals) that the job charges for manufacture of cream of mass production and ultimately for biscuits has been separately fixed by the principal manufacturer (M/s Parle) itself proves that sugar cream is different goods and separately available at the price fixed is mis-leading. The fact that the job charges are fixed separately for cream/biscuits by itself does not establish the marketability of the product which are wholly consumed in the manufacture of cream biscuits as per the specifications provided by the principal manufacturer.
5. Considering the above discussion, we are of the view that to charge excise levy on the cream captively consumed it is necessary to support the contention of the marketability of the product with evidence which may include the details of shelf-life, general availability of market for such product, market inquiry etc. As there is no detailed discussion in the proceedings of the lower authorities, we remand the matter back to the original authority for detail examination of these issues and to pass fresh orders. The appellant shall be given liberty to defend their case. The appeal is disposed of by way of remand.
(Operative part of the order pronounced in the open court.) (Ashok Jindal) Member (Judicial) (B. Ravichandran) Member (Technical) PK ??
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