Customs, Excise and Gold Tribunal - Mumbai
Pepsico India Holdings Ltd. vs Cce on 10 November, 2000
Equivalent citations: 2001(95)ECR371(TRI.-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. The facts of the case and the issue involved in these proceedings as tabulated by Shri V. Sridharan, Advocate appearing along with Shri T. Viswanathan, Advocate, are as follows:
LIST OF DATE AND EVENTS _____________________________________________________________________________________ Date Event ______________________________________________________________________________________ 25.7.1989 Central Board of Excise and Customs (CBEC) issued circular No. 14/10/88-CX1 dated 25.7.1989 clarifying that the sugar in water is not the same as sugar syrup mentioned in the tariff and such sugar in water is not capable of being marketed. The CBEC relied upon the decision of the Hon'ble Supreme Court in the case of Bhor Industries Limited v. CCE reported at 1989 (40) ELT 280 (SC) : 1989 (21) ECR 273 (SC) : ECR C 1349 SC and concluded that the sugar solution coming into existence during the course of manufacture of aerated water and ayurvedic medicines was not marketable, as it has got very short shelf life and gets fermented if delayed and, therefore, such sugar solution prepared in the intermediate stage in the preparation of aerated water was not dutiable.
________________________________________________________________________________________ 7.11.1994 The CBEC issued circular dated 7.11.1994 wherein the afore-
said circular dated 25.7.1989 was withdrawn and it was de-
cided by the Board that sugar syrup has been mentioned as excisable goods under sub heading 1702.30 of the Tariff Act and since the same has shelf life it is marketable.
________________________________________________________________________________________ 30.6.1995 to The appellants were issued nine show cause notices by the Superintendent of Central Excise proposing to demand duty on the sugar solution prepared within the factory of the app-
ellants and used in the manufacture of MANGOLA fruit Pulp based drink on the ground that the sugar syrup is classi-
fiable under sub heading No. 1702.30 of Central Excise Tariff Act, 1985, attracting duty @ 10% ad valorem and that the said sugar solution is having its own shelf life and marketability.
There was no evidence placed on record by the department to allege that the sugar solution prepared by the appellants was having shelf life and marketability.
_______________________________________________________________________________________ 3.7.1996 Revised circular issued by the CBEC based on the opinion of the Chief Chemist. The Chief Chemist gave opinion that in the case of sugar syrup of concentration of 65% by weight or more, the solution will retard the growth of microorganisms and, therefore, such solution must have shelf life. Chief Chemist also referred to Indian Standards Specifications.
_______________________________________________________________________________________ 12.5.1997 The appellants were heard by Mr. Deepak Arora, Assistant Commissioner.
_______________________________________________________________________________________ 22.10.1997 The appellants were offered personal hearing on 7.11.1997 or 10.11.1997 by the successor Assistant Commissioner, when earlier Assistant Collector was transferred.
_______________________________________________________________________________________ 6.11.1997 The appellants filed a letter requesting adjournment of the hearing fixed on 7.11.1997 or 10.11.1997 since their counsel was tied up with prior commitments in New Delhi. The appel-
lants therefore requested for hearing after 17.11.1997.
________________________________________________________________________________________ 20.11.1997 The Assistant Commissioner of Central Excise passed order-
in-original dated 20.11.1997, without hearing the appellants. The Assistant Commissioner confirmed demand of duty of Rs.
54,97,427 and imposed a penalty of Rs. 15,00,000/-. This order was issued on 20.4.1998.
_________________________________________________________________________________________ 17.7.1998 The appellants filed appeal and stay application before the Commissioner of Central Excise (Appeals), Mumbai-II.
_________________________________________________________________________________________ 17.12.1998 The appellants appeared before the Commissioner of Central Excise (Appeals) and filed their written statement. The appel- lants also filed an affidavit of Shri Suhas P. Limaye of their plant, describing the method of preparation of sugar solution and confirmed that no preservatives were added to the sugar solution and that the concentration of sugar solution was not more than 65% by the weight of sucrose. Shri Suhas P. Limaye on behalf of the appellants stated and affirmed in his affidavit that the sugar solution would get fermented if it was not used within a few hours and, therefore, become waste if this is not so used.
________________________________________________________________________________________ 18.12.1998 Order by Commissioner (Appeals) rejecting stay application and directing the appellants to pre-deposit duty and penalty as imposed by order dated 20.11.1997.
_________________________________________________________________________________________ The appellants filed writ petition No. 118/98 before Mumbai High Court against the order of Commissioner (Appeals) dated 18.12.1998.
_________________________________________________________________________________________ 3.3.1999 Hon'ble Mumbai High Court passed an order remanding the case back to Commissioner (Appeals) to decide it afresh.
_________________________________________________________________________________________ 3.2.2000 The appellants were granted fresh personal hearing by the Commissioner of Central Excise (Appeals). The appellants filed a detailed synopsis of submission and requested that stay may be granted.
__________________________________________________________________________________________ 11.2.2000 The Commissioner (Appeals) passed an order rejecting the stay application filed by the appellants and directed the appel- lants to pre-deposit the entire duty and penalty within two weeks.
___________________________________________________________________________________________ 21.2.2000 The Appellants filed writ petition No. 447/2000 before the Mumbai High Court against the order of Commissioner (Appeals) dated 11.2.2000.
___________________________________________________________________________________________ 29.2.2000 The Mumbai High Court dismissed the aforesaid writ petition granting two weeks time to the appellants to pre-deposit the duty and penalty amount and directing the Commissioner (Appeals) to decide the appeal within six months.
___________________________________________________________________________________________ 3.3.2000 Filed Special Leave Petition (Civil) No. 4239/2000 before Supreme Court against the order of Mumbai High Court dated 29.2.2000.
___________________________________________________________________________________________ 22.3.2000 In the meanwhile, Commissioner (Appeals) passed Order-in-
Appeal dismissing the appeal for non-compliance of the pro-
visions of Section 35F.
__________________________________________________________________________________________ 23.3.2000 The appellants received the Order-in-Appeal dated 22.3.2000. _________________________________________________________________________________________ 27.3.2000 Hon'ble Supreme Court rejected the petition by directing the appellants to deposit duty and penalty amounts before 30.3.2000 ________________________________________________________________________________________ 29.3.2000 Appellants paid full duty and penalty amount as imposed vide Order-in-Original dated 20.11.1997.
________________________________________________________________________________________
2. Today the application seeking waiver of pre-deposit of duty and penalty was posted for hearing. In view of the fact that the payment has already been made, the application becomes infructuous and is dismissed.
3. Shri Sridharan requests for disposal on merits by the Tribunal. We feel that the order of the Commissioner impugned before us limits itself to dismissal of their appeal for the assessees' failure to comply with the provisions of Section 35F of the Central Excise Act, 1944 and does not deal with the merits of the case. It would be appropriate for us to remand the matter to the Commissioner. Shri Sridharan submits that in his interim order the Commissioner has discussed the merit. The discussion on merits leading to an interim order cannot be equated to the extent of discussion required at the time of final disposal. We find that the Hon'ble High Court of Bombay had directed the Commissioner to decide the appeal within six months. This order was complied with by him by dismissal of the appeal as mentioned above. Subsequently the Hon'ble Supreme Court has specifically extended the period for making the deposit beyond the date on which the Commissioner (Appeals) passed the impugned order.
4. In these circumstances we allow the appeal, set aside the impugned order and direct the proceedings back to the jurisdictional Commissioner (Appeals). He shall go into the merits of the case after hearing the assessee and then give his reasoned order on all aspects. It is expected that the Commissioner will complete the proceedings within three months of the receipt of this order.
(Dictated in Court).