Custom, Excise & Service Tax Tribunal
Ajmer Food Products Pvt Ltd vs Jaipur-I on 11 July, 2018
1 A.No. E/56735/13
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. 1
Appeal No. E/56735 of 2013
(Arising out of Order-in-Appeal No. 04(RDN)CE/JPR-II/2013 dated 18.01.2013 passed by the
Commissioner (Appeals) Customs & Central Excise, Jaipur-II)
DATE OF HEARING : 11.07.2018
DATE OF DECISION : 11.07.2018
M/s Ajmer Food Product Pvt. Ltd. ..... Appellants
(Rep. by Sh. Jatin Mahajan, Adv.)
VERSUS
CCE, Jaipur-II ..... Respondent
(Rep by Sh. R.K. Mishra, DR) CORAM : HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) FINAL ORDER No. 52547/2018 PER ANIL CHOUDHARY :
The present appeal is filed by the Appellants against the Order-in-Appeal No. 04(RDN)CE/JPR-II/2013 dated 18.01.2013 passed by the Commissioner (Appeals) Customs & Central Excise, Jaipur-II.
2. The brief facts of the case are that the appellants are manufacturer of biscuits. During the manufacture of biscuit, cream is prepared to be used in making of cream biscuits. It appeared to 2 A.No. E/56735/13 Revenue that the cream was classifiable under Tariff Item No. 2106.90. Appellants were not paying duty on the cream so produced and captively consumed in the factory for further manufacture of cream- biscuits. Since the cream was being used to manufacture biscuits which were exempted from duty (upto Rs. 100 per kg or equivalent thereof) the demand of duty on cream was made. The appellants were issued various show cause notices demanding Central Excise duty on intermediate product, namely on cream, captively consumed, in the manufacture of duty exempted biscuits. The various show cause notices were adjudicated through various Orders-in-Original where the demands were confirmed. Aggrieved by the said Orders-in-Original appellant preferred appeal before learned Commissioner (Appeals). Learned Commissioner (Appeals) through above stated common Orders-in-Appeal upheld the Orders-in-Original, observing that cream produced in the factory was capable of being marketed and that in respect of another assessee namely Annakuit Biscuits Co. show cause notice was issued based on market enquiries made from bakeries who were selling cream and further that since the biscuit packs carried information that the biscuit is best before eight months, cream also contained in the biscuits should be held to have shelf life of eight months.
3. Heard the learned counsel for the appellant who has submitted that the issue is no more res-integra in view of the various Final Orders passed and issued by this Tribunal including order issued by this Bench in respect of M/s Bhagwati Food Private Ltd. He has submitted a copy of Final Order Nos. 70409-70417/2016 dated 30.06.2016, passed by this Bench, in respect of appeal filed by M/s 3 A.No. E/56735/13 Bhagwati Food Pvt. Ltd. and others in Appeal Nos. E/51610-51618/2015 wherein rather a similar issue was raised in respect of sugar syrup captively produced and consumed in the manufacture of biscuits and also in the case of M/s Bhagwati Foods Pvt. Ltd. vs CCE, Jaipur, Final Order No. 70838-70840/2018, and submitted that this Tribunal had allowed appeals by setting aside the impugned Order-in-Appeal, in the said appeals. It is also contended that cream once processed for biscuits has a particular color and flavour for a particular biscuit, and not marketable normally.
4. Heard the learned AR who contends that the capability of marketing the cream is sufficient to levy duty.
5. Having considered the rival submissions from both sides and on perusal of record we find that this Tribunal in Bhagwati Food relied on the decision by Coordinate Bench in the case of Rishi Bakers Pvt. Ltd., Kanpur decided vide Final Order Nos. 50759-50764/2015 dated 03.03.2015, reported at 2015 (378) ELT 634 (Tri. Delhi) and held inte-alia, that, there was no evidence to prove that the sugar syrup in question, in the form in which it comes into existence in the appellants' factory, is marketable. In the instant case, the Adjudicating Authority has recorded the submission of the appellant as under:-
"Cream manufactured is not marketable: it is submitted that even otherwise the cream which is produced in the factory is solely for captive consumption. The cream has certain specification which is peculiar to Parle, the combination of various ingredients in the cream is unique and is a trade secret. It is not in our knowledge that such creams are commercially bought and sold in the market. At 4 A.No. E/56735/13 least to the extent we know such creams are not available in the market at all".
6. Thus, we find that the cream which is produced captively is having unique flavour, colour and taste and the cream biscuits manufactured by different manufacturers have different flavours and taste. The Department has not been able to bring any evidence of marketability of creams so manufactured by the appellant. The reliance placed on some cream sold in bakeries without reference to their ingredients like colour, flavour and taste cannot be relied on to fasten duty liability on the appellant. In fact the Hon'ble Supreme Court in Union of India vs. Sonic Electrochem Pvt. Ltd., reported at 2007 (145) ELT 274 (SC), has laid down the test that the product which is specially manufactured and captively consumed in the factory should be shown to be available in the market so as to fasten any duty on the same. By following the ratio of the law laid down by the Apex Court, we hold that the cream captively produced and consumed in the factory is not marketable as there is no evidence to that effect. We, therefore, set aside the impugned order and allow the appeal filed by the appellants, with consequential relief, if any.
(Dictated & pronounced in the open court) (ANIL CHOUDHARY) MEMBER (JUDICIAL) (C.L. MAHAR) MEMBER (TECHNICAL) Golay