Custom, Excise & Service Tax Tribunal
Sh. Naveen Mullick, Advocate- For The vs Sh. V. Gupta, Ar -For The on 7 April, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH-160 017
COURT NO.1
Appeal No. E/59178 & 59430 /2013-(DB)
[Arising out of the Order-in-Original No.CHD/ CEX/ 001/ COM/ 10/ 17/2013 dated 26.04.2013 passed by the CCE (Appeals), Chandigarh-I)
Date of Hearing: 07.12.2016
Date of Decision:
For Approval & signature:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. Devender Singh, Member (Technical)
M/s Kenzo International Assessee
Vs.
CCE, Chandigarh-I Revenue
And
CCE, Chandigarh-I Revenue
Vs.
M/s Kenzo International Assessee
________________________________________________________________________________
Appearance
Sh. Naveen Mullick, Advocate- for the appellant
Sh. V. Gupta, AR -for the respondent
CORAM: Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. Devenber Singh, Member (Technical) FINAL ORDER NO.: 60578-60579 / 2017 Per Ashok Jindal:
Both sides are in appeal.
2. The facts of the case are that in the year 2005, the assessee started manufacturing Lead Acid Batteries, Battery Plates, Grids, Grey Oxide of specification required for making of Battery Plates. The Grey Oxide, undisputedly, falls under Chapter Heading No. 38.24 that the asseessee were availing benefit of Notification No. 50/2003-CE dated 10.06.2003. The assessee was manufacturing Battery Plates from Grey Oxide in the year 2005. The purpose of using the Battery Plates is that when the said plates are dipped in Sulphuric Acid contained in the container of the Batteries, it creates a charge to enable to the battery to work. During the period from 2005-2008, the Grey Oxide was being manufactured and there was no purchase any Red Lead Oxide by them. Such Grey Oxide was being manufactured in the ball mill installed by the assessee after importation.
3. In the year 2008, the assessee fabricated and installed another plant through Barton Process with an intention to manufacture Red Lead oxide. The asseessee was maintaining the separate records for a manufacturing of Grey Oxide or intended production of so called Red Lead Oxide. The assessee was also having tested the so called Red lead oxide and maintaining the Test Reports. On 20.07.2011 and 28.07.2011, the DGCEI searched the factory premises of the assessee and after studying the process resumed certain records under Panchnama dated 20.07.2011 and through investigation, it was alleged that the assessee was not entitled to availment of exemption Notification NO. 50/2003- CE dated 10.03.2003 on the production and clearance of Grey Oxide and red Oxide as the said items are covered under Chapter Heading 28 are mentioned in Annexure-I to the Notification No. 50/2003 ibid and the Red Lead and Grey Oxide manufactured by the assessee are classifiable under Chapter Heading 28.24, therefore, the assessee is liable to pay duty. In these set of facts, the show cause notice was issued on 04.05.2011 by invoking extended period of limitation. The matter was adjudicated and the Ld. Commissioner held that the grey oxide manufactured by the assessee falls under Chapter heading 38.24, therefore, on manufacture of Grey Oxide, the assessee is entitled for benefit of Notification No. 50/2003. The Red Lead Oxide falls under chapter heading 28.24, therefore, the assessee is not entitled to avail benefit of exemption Notification No. 50/2003 on manufacturing of Red Lead Oxide but the benefit of extended period of limitation was granted and confirmed the demand falling within the period of limitation along with interest and equivalent amount of penalty was also imposed. Aggrieved from the said order, the assessee is in appeal against the order of confirming the demand alongwith interest and imposing penalty. The Revenue is in appeal against the order of dropping the demand on account of extended period of limitation. Therefore, both sides are in appeal before us.
4. The ld. Counsel for the appellant submits that the assessee started manufacturing of Grey Oxide in the year, 2005, through Ball Mill and the Grey Oxide falls under chapter heading 38.24. He further submits that in the year, 2008, the assessee fabricated and installed another plant to manufacture of Red Lead Oxide through Barton Process and started manufacturing the intended production so called Red Lead Oxide, after doing the process of manufacturing of Red Lead Oxide, the assessee conducted test in respect of the product manufactured but the test reports did not confirm the product is Red Oxide. In fact, the desired product i.e. Red Lead Oxide could not be obtained. The test reports were maintained by the assessee and were supplied to DGCEI during the course of investigation. The persons who are carrying out the above test reports was never investigated nor summoned. He further submits that it is an admitted position about the assessee while filing the declarations under Notification No. 50/2003-CE in response to a letter bearing number CE-20-DECL/KENZO/R-III B208/1880 dated 29.02.2008 wherein the assessee was directed to furnish and file the process chart, investment in plant and machinery, manufacturing process etc, the assessee declared the process of manufacture of batteries and also production of Red Lead Power by Bartron Process and Grey Oxide by Ball Mill process which were being used in manufacture of Battery Plates. It is an admitted position that the assessee have declared and provided all the details, as sought from them by the Range Superintendent. Thereafter, the assessee was availing benefit of notification no. 50/2003. He further submits that Red Lead Oxide was intended to be manufactured by the assessee w.e.f, 2008 through Barton Process, however, the same could not be manufactured due to snags in the Barton Plant. The test reports prepared by them confirms the same. This happened due to erratic functioning of the plant. Resultantly, the goods coming out through such plant could not be made use of, as Red Lead Oxide. The use of Red Lead Oxide is normally required to provide charging of the battery within a very short time or to say, immediate charging. This resulted in closure of the Barton Plant till the same was duly rectified.
5. He further submits that during the course of investigation on 20.07.2011, the panchnama was drawn and representative samples, each of Grey Oxide and Red Oxide were drawn. The test memo was prepared on the same date which shows that Serial No 9 of the Test Memo relating to The Samples to be Tested for was left blank. Therefore, he submitted that no report of such samples drawn was ever provided.
6. He further submits that on 28.07.2011, the officers again visited the factory of the assessee and samples were drawn in respect of the goods, which were Grey Oxide and RED Oxide. As usual, the test Memo was prepared and the Column at Serial No. 9 relating to The Sample to be tested for was left blank. The report dated 06.09.2011 of CRCL, in respect of Red Oxide reads as under.
The Samples is in the form of Red coloured powder, having Lead Oxide content 75.04% by weight. Sealed Remnants returned.
7. He further submits that the samples were drawn by the visiting officers and packed in an envelope on which cello tape was placed over the cover. During cross examination of Sh. Jitender Singh, IO has disposed that use of lac seal was not there and further, the samples were not placed in an Air-Tight Tin Packing. The report of CRCL in respect of samples allegedly drawn on 28.07.2011 was supplied to the assessee with the show cause notice dated 04.05.2012. In spite of the fact of there being instructions in CBEC Excise manual for immediate supply of the Report of the samples to the person aggrieved, the same was, however, not followed and the Report dated 06.09.2011 was only supplied with the impugned show cause notice i.e. after a period of eight months. 8. He further submits that it is on record that the cross examination of Sh. R.P Singh Chemical Examiner, CRCL admitted that the shelf life of the samples of Grey Oxide and Red Oxide was only two months.
9. He further submits that Sh. R.P. Singh, Chemical Examiner, CRCL has admitted in his deposition that he was not the person who conducted any tests of the samples sent to them and he only signed the report as presented to him by his staff.
10. During the course of cross examination of Sh. Jatinder Singh, IO, deposed that he has no knowledge about Grey Oxide and Red Oxide and he prepared the Panchnama on the directions of his seniors.
11. He further submits that the goods of Heading No. 28.24 pertain to the category of Technical or Scientific Sense. The description appearing in Heading No. 28.24 like Lead Oxide, Red Lead Oxide, Lead Monoxide are not the expressions to which any Trade Parlance Test has to be applied. Depending upon the process carried out, formulations including overall factors of maintaining temperatures during manufacturing process, atmospheric conditions for carrying out the manufacturing process and like such technical aspects are required to be analysed and further determined for finding percentage of goods for Heading No. 28.24. therefore, he submits that the trade parlance test is not applicable to the facts of this case in the light of the decision of Honble Apex Court in the case of Mukesh Kumar Aggarwal & Co. reported in 1998 (14) ECR 353 (SC), therefore, he submits that the goods as having been produced and further in dispute fall under exclusion i.e. goods for Technical or Scientific Sense. Therefore, the Ld. Commissioner grossly erred in relying and referring that in Trade and Industries, the Oxide of lead, when red in colour, is known as Red Oxide or Red Lead. He further submits that as per the finding in para 3.21, it is held by the Ld. Adjudicating Authority the samples were not tested with correct protocol and also hold the department failed to discharge the burden that the impugned goods are classifiable under chapter 28.24.
12. He further submits that as the test reports of CRCL were not supplied immediately to the assessee, therefore, the assessee is deprived the right of re-testing of the samples and in that circumstances, the test report of CRCL cannot be relied upon. Moreover, the test report is deficit as it is not mentioned the samples to be tested for?. The findings are also lacking the specific gravity and lacking other possible ingredients is sufficient to establish about the subject goods being not goods as Red Lead Oxide of Heading No. 28.24. There is no technical opinion or opinion of any expert placed on record and the adjudicating authority is not an expert as per the Evidence Act. The findings of the adjudicating authority to classifying the goods under Heading 28.24 should have been supported with opinion of some experts and technical literature which is lacking in this case, the classification of the goods in question cannot be said to be classified under Chapter Heading 28.24. In that circumstances, the assessee is entitled for benefit of exemption notification no. 50/2003, therefore, the demand of duty confirmed against the appellant along with interest are to be set aside. Consequently, the penalty is also not imposable.
13. He further submits that the Revenue is also filed the appeal against the impugned order for dropping the demand for extended period of limitation. It is his submissions that all the details regarding manufacturing process, as sought, were placed before the Range Superintendent as early as in the year 2008. As classification of the product is disputed, therefore, the extended period of limitation is not invokable. He further submits that the firm was working under the watchful eyes of the proper officer having immediate jurisdiction which the department cannot pretend ignorance, therefore, the Ld. Commissioner has rightly held that the extended period of limitation is not invokable. In that circumstances, the Revenues appeal is to be dismissed.
14. On the other hand, the Ld. AR opposed the contention of the Ld. Counsel and submits that during the course of investigation, various statements of the responsible officers of the assessee were recorded who admitted that they were manufacturing Lead Oxide and the manufacture of Red Oxide was suppressed from the department. In that circumstances, the extended period of limitation is rightly invoked. He further submits that the test reports clearly shows that the samples is in form of Red Colour Power and having Red Acid which is clear that the product is Red Oxide, therefore, the test report is clear and in the Trade Parlance, the Red Colour Powder is known as Red Oxide. In that circumstances, the assessee is required to pay duty on Red Oxide manufactured by them which is classifiable under Chapter Heading No. 28.24. In that circumstances, the impugned order qua, dropping demand for extended period of limitation is to be set aside.
15. Heard both the sides and considered the submissions.
16. On careful consideration submissions made by both the sides, we find that the following issues are as under:
(i) Whether in the facts and circumstances of the case, the extended period of limitation is invokable or not?
(ii) Whether on the basis of the test reports it can be held that the goods in question are Red Lead Oxide or not?
(iii) Whether the goods can be classified as Red Lead Oxide as per trade parlance or not?
Issue No I:
The contention of the assessee is that vide letter dated 09.04.2008, the appellant replied to the letter No. CE-20-DECL/KENZO/R-III B208/1880 dated 29.02.2008, and explained the whole process of manufacturing as per Annexure-2. The Annexure-2 is extracted here below for consideration.
BATTERY MANUFACTURING PROCESS We have seen that the battery manufacturing process, the assesee has shown that there are having Red Lead Powder furnace with Barton Process which shows that the activity of manufacturing of Red Lead Powder through Barton Process was in the knowledge to the department on 09.04.2008 and after examining the manufacturing process filed by the assessee, the department allowed the benefit of exemption Notification No. 50/2003 which shows that the Revenue is also of the opinion that the Red Lead Powder derived from Barton Process is not classifiable under chapter heading 28.24 and allowed the exemption Notification No. 50/2003. In this circumstances, the Ld. Commissioner (A) has rightly observed as under:-
3.25 However, Noticees-1 had been filing their declaration under notification number 50/2003 in each year. The Noticees received a letter bearing number CE 20/Decl/Kenzo/R-III B/2008/1880 dated 29.02.2008 from jurisdictional revenue authorities, directing them to furnish and file the process chart, investment in plant and machinery, sale bills, manufacturing process etc. The Noticees-1 filed the required information with the jurisdictional revenue authorities on 09.04.2008. The Noticees had expressly declared that in the process of manufacture of batteries they manufacture red lead powder by Barton process and grey oxide by ball mill process and used the said products in the manufacture of battery plates for further manufacture of batteries. The Noticees also filed a flow chart of the process of manufacture. Photo copies of said documents showing the receipt by the jurisdictional inspector of Central Excise have been filed by the Noticees along with the reply to the show cause notice. The Noticees-1, thus, had declared their process of manufacture and also the products manufactured by them. It was for the Central Excise authorities to examine the information filed by the Noticees and take appropriate action. The Noticees had declared and put on the table of the jurisdictional Central Excise Authorities all the activities they were undertaking in their manufacturing unit. In such a scenario, it would be unfair and illegal to charge the Noticees for deliberately suppressing the facts from the knowledge of the revenue authorities with intent to evade the payment of Central Excise duty. The factor which empower the revenue authorities to invoke extended period of limitation to recover duty not levied or short levied and not paid or short paid were not present in the proceedings at hand. Once the Noticees declared what they were required to declare they cannot be charged with the offence of suppression of facts, fraud, mis-representation or collusion and least for such omissions and commissions with intent to evade the payment of Central Excise duty. In such circumstances only normal period of limitation is applicable. Under Section 11 A of the Act the normal period of limitation is one year which is to be computed from the relevant date. In these proceedings the duty of Central Excise was payable on clearances of red oxide and the duty has not been paid and periodical return relating to production and clearance has not been filed. Accordingly, the relevant date for computing the period of one year shall be the last date on which periodical return was required to be filed under the Act and rules made thereunder. The periodical return is required to be filed by the tenth day of the calendar month following the month in which clearances of the excisable good had taken place. The show cause notice in these proceedings was issued on fourth of May, 2012. Accordingly, the last month for which Central Excise duty for clearances of red oxide could have been demanded was April, 2011. Any demand before the month of April 2011 is barred by limitation of time.
We agreed with the observations made by the Ld. Commissioner (A) and hold that extended period of limitation is not invokable in the facts and circumstances of the case, therefore, the issue no. 1 is answered in favour of the assessee holding that the demands for the extended period of limitation is sustainable. Accordingly, the impugned order qua dropping the demand for extended period of limitation is upheld. Consequently, the appeal filed by the Revenue is dismissed.
Issue NO. II & III It is an admitted fact that the assessee started manufacturing of Red Lead Powder through Barton Process in the year, 2008 and declaration to the effect was also filed. We have seen that the assessee did not get the desired results for Red Lead Oxide through Barton Process in their plant, the same has been evident from the test reports maintained by the assessee during the relevant period which were shown to the investigating team during the course of investigation and the same has not been denied by the Revenue. The person who conducted the test was not questioned.
We also take note of that during the course of drawing the panchnama, the samples were drawn and sent for Chemical Examination, CRCL and the test memo was prepared which is extracted here below:
In the test memo, we find that the samples were drawn for what purpose is not mentioned. The column at Serial No. 9 relating to the sample to be tested for was left blank, therefore, the samples are to be tested for what purpose is not known.
Further, we find that as per the test report the following is test result.
C No. 35/CRCL/2011-12/ct 2941 C.Ex (Int.)/ Dt 06.09.2011 Report: The sample is in the form of used coloured powder, having Lead Oxide content. 75.04% by weight sealed remnant returned. The test result says that the samples in the form of Red Colour Powder having Lead Oxide content 75.04% by weight. We find that during the cross examination it is stated by the examiner that the relevant literature has been consulted while testing. As from ISI specification, there is a procedure for testing which has been prescribed which was not followed as per test report placed before us.
17. As no details how the tests were conducted placed on record therefore, the test results are doubted and the same cannot be admissible. The Ld. Commissioner has also observed the same.
22. The Report of CRCL is also silent with regard to the method by which the samples were tested. It is incumbent upon the Expert concerned with testing of samples to place on record the method by which the samples were tested. It is open to judicial scrutiny. Further Sh. RP Singh, who signed the Report admitted during cross examination of him being not the person concerned with testing and he only appended his signature on the document placed before him. Such deposition goes a long way to establish about the alleged Test Report having only been a paper formality to falsely implicate M/s Kenzo international.
18. Further, we find that during the cross-examination, Sh. R.P. Singh, Chemical Examiner has said that there will be change in the properties of samples of Grey Oxide and Red Oxide due to atmospheric condition more or less for nearly two months. There may be a slight change in the oxidation of the salts due to atmospheric condition. Admittedly, in this case samples were drawn on 20.07.2011 and 28.07.2011 and test report is dated 06.09.2011. These test reports were not supplied to the asssessee within reasonable time to challenge the test reports. As the samples could be re-testing due to change in oxidation of the salts therefore, the appellant was deprived of the chance of re-testing of the samples. 19. On that ground also the test reports can be discarded as held by this Tribunal in the case of Ruchi Soya Industries Ltd. reported in 2015 (323) ELT 189 (Tri. Bang.) wherein this Tribunal observed as under:
7. On a very careful consideration of the issue, we find that the commissioner (Appeals) in his finding has not at all referred to the case law cited before him. Especially he has not taken into account the Ruchi Soya Industries Case which is cited (supra) and which has been upheld by the Karnataka High Court. In the finding it appears to us that he has adopted a very dogmatic approach saying categorically that the carotene value will not change over a period of time. He has stated, there is no scientific evidence available to support the rate of decay or maximum period during which carotene will exist in the oil within permissible percentage. In the cited decision the Tribunal has held that the carotene content varies with the efflux of time. This is not simply the view of the Tribunal, this was based on the scientific literature from reputed laboratories. In the said decision and the Commissioner (Appeals) in the present case has taken a very rigid stand that the carotene value would be the same at any point of time. This approach is not correct. Moreover, he has also not considered the point that when the test result is given after such a long delay the appellant loses the right to ask for retests. He could not have asked for retest, as the same would not be beneficial to him, because it has already been seen that storing the oil for a long time changes the carotene value. Only on the basis the earlier decision, which was cited, has been taken and same has been upheld by the High Court. By ignoring the said decisions we find that commissioner has committed gross judicial indiscipline. The tendency has to be avoided. In our view, the appellants case is squarely covered by the cited decision and the department also has committed a great irregularity in not communicating the test results within a reasonable period of time. In these circumstances, the impugned order has no merit, we set aside the same and allow the appeal with consequential relief.
20. We also take note of the fact that the Ld. Commissioner in the impugned order has examined and observed as under:
3.21 The Chemical formula for red lead or the red oxide is Pb?O?. The red lead is an oxide of lead metal. But it is not the only oxide of lead metal. There are many other products which are known as oxides of lead. The common lead oxides include; lead oxide (PbO), red lead (Pb?O?) and lead dioxide (PbO?). Less common lead oxides are lead sesquioxide (Pb?O?) and Pb??O?? (monoclinic, dark brown or black crystals). So, unless the chemical test report discloses the chemical formula of the oxide of lead it is not possible to know which oxide of lead is contained in particular sample. Even with respect to the grey oxide the test report mentions the sample is in the form of grey coloured powder, having lead oxide content 99.8% by weight. Sealed remnant returned. So, except for the difference in colour (which is a physical property of any substance and for which no chemical analysis is required) there is no difference in the chemical analysis of the two products. From the test reports it is not possible to know that which oxide of the lead metal is contained in the samples of red coloured powder or the grey coloured powder. The term lead oxide normally applied to PbO. It has been seen above that how the content of lead oxide was determined by CRCL in the samples of grey oxide. It is not clear how the samples of product which has been described as red lead were tested by CRCL. It however appears from the cross examination of the chemical examiners that the same protocol that was followed for the testing of samples of grey oxide was followed for testing the samples of red oxide. The chemical examiners, during the cross examination, at no point of time mentioned that they adopted a different protocol at the time of testing samples of red oxide. If the same protocol has been followed then instead of testing the samples for Pb?O? the CRCL had just determined the quantity of lead in the sample and from that the lead oxide in the sample without determining if the oxide was Pb?O?. If CRCL had determined the nature of oxide of lead in the sample the chemical test report would have specified the chemical formula of the oxide of lead present in the sample. Without the said formula it is impossible to say that whether the oxide of lead contained in the sample was PbO or Pb?O? only Pb?O? is red lead. The chemical analysis report is, therefore, not of any help in determining the correct classification of product manufactured by Noticee-1.
21. The said observations has been accepted by Revenue and has not been challenged. As per the said observations, the test reports cant relied upon.
22. We also take note of the fact that the Ld. Commissioner fell into an error to hold that in the trade and industry, oxide of lead, when red in colour has known as Lead Oxide or Red Lead. We hold that the item in question whether is Red Oxide or Red Lead is to be decided on the basis of chemical formulation and not as per trade parlance.
23. As the Ld. Commissioner while confirming the demand has relied on presumption that in the trade and industry if it is Red Colour Powder shall be called as Red Oxide. The said finding of the Commissioner is without any technical analysis. We also take note to fact that the Ld. Commissioner has decided the issue without taking any expert opinion. In that circumstances, the finding of the Ld. Commissioner with regard to the powder in question is Led Oxide or Red Lead is not correct. The classification of dispute cannot be determined as per trade parlance test.
24. We find that there is nothing on record if the product of M/s Kenzo International was the same as of other manufacturers manufacturing Red Lead Oxide. There is also nothing on record if the samples of M/s Kenzo International product in dispute were shown to others in trade for getting their opinion. Both the impugned show cause notice and impugned order are silent on such account. There was just no basis for the learned Commissioner to classify the so called Red Lead Oxide under Heading 28.24.The Learned Commissioner himself had held that the product having 70 to 80% of Lead Oxide is covered by Grey Oxide and Black Oxide of Heading 38.24. Even if one looks to CRCL report, for argument sake, it also provides Lead Oxide content of about 75%. There is no reason therefore to classify product in dispute under Heading no. 28.24. Such finding of the Learned Commissioner about the Chemical Analysis Report is not worth reliable and further on the basis of such Report it is not possible to determine whether the product is PBO or Pb3O4, has reached the finality and no appeal against such finding has been filed by the Department. The Learned Commissioner have also observed that the product taken out from the Barton Process by M/s kenzo International may not be pure compound, may not have appropriate specific gravity and may not have required standards and particulars, means that not only the goods in dispute cannot be classified under Heading 28.24 but also there is no evidence of even the same being marketable. This takes out product in dispute from any Central Excise Levy. The Demand confirmed is erroneous and arbitrary.
25. We find that in somewhat similar case where the classification of the product was based on the process involved, this Tribunal held that commercial parlance test will not be invoked for determining classification of such product. In the case of M/s Jain name lable Company Vs. CCE, Delhi-I, wherein through final order No. 53310/2016 dated 12.08.2016, observed as under para 9 and para 10 of the said judgment are relevant.
9. Explanatory Notes to HSN on chapter Heading 5804 specifically says that lace does not have distinct weft and scrap, whereas the appellant has mentioned that they have been producing these by different settings of warp and weft threads design pattern by the weaving process, when explanatory notes specifically state that lace does not have distinct warp and weft; whereas subject goods are weaved by using the threads as warp and weft; the subject goods though may be described, commercially in the invoices by the appellant as lace and looking like lace, the same cannot be classified technically as lace under chapter heading 5804 of Central Excise Tariff. Consequently, the classification of subject goods under Tariff Heading 5804 is ruled out.
10. Considering the Explanatory Notes of Chapter Heading 5804, when the subject goods cannot be classified as lace under this chapter, other classification in alternative in the present proceedings in Chapter Heading 5807. Therefore, only choice for the classification now in the present proceedings is chapter heading 5807 as the Revenue has not pleaded any other classification i.e. in lieu of chapter heading 5804 other than 5807. We accordingly hold that the goods presently deserve classification under chapter heading 5807 of Central Excise Tariff. When it is so then impugned order is set aside and the matter is remanded back to the original adjudicating authority for fresh adjudication with a direction to decide the liability of duty of Central Excise, if any, against the appellant. The process must be completed within a period of four months from the date of receipt of this order by providing an opportunity of hearing and production of evidence to the appellant as per law.
26. We find that the Ld. AR relied on the various statements recorded during the course of investigation that the assessee was manufacturing Red Lead Oxide. In fact, conclusion of the statement is that the assessee intended to manufacture Red Lead Oxide through Barton process but they could not succeed in manufacturing the same due to defects in the plant.
27. In view of the above observations, we find that the trade parlance test is not applicable to the fact and circumstances of the case the test reports relied by the Revenue is inconclusive, as no procedure was followed and the assessee was deprived from re-testing the samples, therefore, the product in question cannot be classified under chapter heading 28.24 without any positive evidence.
28. Accordingly, we hold that the assessee is entitled for benefit of Notification No. 50/2003-CE. Consequently, the demands against the assessee are not sustainable. In result, the impugned order qua demand of duty and interest is set aside, penalty imposed on the assessee is also set aside.
Consequently, the appeal filed by the assessee is allowed. The appeal filed by the Revenue is dismissed.
(Order pronounced on )
Devender Singh Ashok Jindal
Member (Technical) Member (Judicial)
rt
20
E/59178 & 59430/2013
M/s Kenzo Internaitonal Vs. CCE, Chandigarh
CCE, Chandigarh, Vs. M/s Kenzo International