Custom, Excise & Service Tax Tribunal
Chalthan Vibhag Khand Udyog Sahkari vs C.C.E.& Cus., Surat I on 15 May, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, O-20, NMH Compound Ahmedabad Central Excise Appeal No.335 of 2007-DB Arising out of the Order-in-Original No.2/DEM/2007 dated 11.1.2007 passed by the Commissioner, Central Excise & Customs, Surat I Chalthan Vibhag Khand Udyog Sahkari Appellants Mandi Vs. C.C.E.& Cus., Surat I .. Respondent/Revenue
Appearance:
None for the Assessee Present Shri A. Mishra, A.R. for the Revenue Coram: Honble Dr. D.M. Misra, Member (Judicial) Honble Mr. Ashok K. Arya, Member (Technical) Date of hearing/decision:15.5.2017 Final Order No.a/10984/2017 Per: Dr. D.M. Misra None present for the appellants. Heard the ld. A.R. for the Revenue. This appeal is filed against the Order-in-Original No.2/DEM/2007 dated 11.1.2007 passed by the Commissioner, Central Excise & Customs, Surat I.
2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of V.P. sugar, Molasses, Denatured and Non-denatured Ethyl Alcohol,Acetone etc. falling under Chapter Sub Heading No.1701, 1703, 2204 and 2914 of the Central Excise Tariff Act, 1985, 1985. The appellants during the period December 1996 to June 1999 cleared the denatured ethyl alcohol manufactured out molasses without payment of duty. Since the appellants claimed the benefit of Notification No.67/95-CE dated 16.3.95 on molasses used captively, therefore, demand notice was issued to them on 2.1.9.2000 for recovery of the duty on molasses denying the benefit of Notification No.67/95-CE dated 16.3.95 on the ground that the same was used in the manufacture of exempted product. On adjudication, the demand was confirmed and penalty of equal amount was imposed. Hence, the present appeal.
3. Ld. A.R. for the Revenue submits that the appellant had wrongly availed the benefit of Notification No.67/95-CE on molasses being used in the manufacture of denatured ethyl alcohol cleared without payment of duty. Drawing our attention to the condition mentioned in the un-amended Notification No.67/95-Central Excise dated 16.3.95, the ld. A.R. submits that even though the appellant had paid 8% of the price of the exempted product namely, ethyl alcohol in accordance with Rule 57CC of the erstwhile Central Excise Rules, 1944, the benefit of the said Notification was not available for the period prior to its amendment inserted by way of Notification No.31/2001- C.E. dated 1.6.2001. Ld. A.R. further submits that even though the appellants have disclosed in the Classification List that molasses emerged as by-product during the course of manufacture of sugar and used in the manufacture of exempted denatured ethyl alcohol but failed to discharge the duty on molasses by wrongly availing the exemption Notification No.67/1995-C.E. dated 16.3.95, therefore, extended period has been rightly invoked in the show cause notice and confirmed by the adjudicating authority in the impugned order.
4. We have carefully considered the submissions of the ld. A. R. for the Revenue and the submissions made by the appellants in their grounds of appeal. In grounds of appeal they mainly laid emphasis on the fact that they had been continuously discharging 8% of the price of the exempted product namely, ethyl alcohol, in accordance with Rule 57CC of the erstwhile Central Excise Rules, 1944 and disclosed the fact that in their RT-12 returns, as well as raising proper invoices, no objection had been raised by the Department in adopting said procedure and during the period 1996-1999 they had paid approx. Rs.17,56,517/-. It is their contention that they have not suppressed any fact from the knowledge of the Department and cleared the exempted goods i.e. ethyl alcohol by discharging duty @ 8% of the price of the same, therefore, demanding duty @ of 18% as per the tariff rate amounting to Rs.26,79,910/- for the said period, by invoking extended period is not tenable in law. On going through the relevant invoices placed at Annexure D, PLA at Annexure E and the extracts of RT-12 return placed at Annexure F to the appeal paper book, we find that while clearing the ethyl alcohol from the factory, manufactured from the molasses, the appellant had discharged 8% of the price of denatured ethyl alcohol. In the Classification List, they have also clearly mentioned that ethyl alcohol is an exempted product. In the circumstances, we do not see any suppression or mis-declaration of facts resulting into non-payment of duty on molasses used captively. Consequently, in our view, the demand notice issued in the year 2000 for recovery of duty short paid for the period December 1996 to June 1999 on molasses, which was used in the manufacture of ethyl alcohol cleared after discharging 8% of the price, cannot be sustained being barred by limitation. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
(Ashok K.Arya) (Dr. D.M. Misra)
Member (Technical) Member(Judicial)
scd/
E/335/2007-DB
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