Customs, Excise and Gold Tribunal - Delhi
Ici India Ltd. vs Commissioner Of C. Ex., Kolkata-Iv on 21 January, 2002
Equivalent citations: 2002(141)ELT537(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. These are two applica tions filed by M/s. ICI India Ltd. for waiver of pre-deposit as under :
Duty : Rs. 1,12,25,434/- and Rs. 31,99,921/- Penalty : Rs. 1,12,25,434/- and Rs. 10,00,000/-
2. Shri A.R. Madhav Rao, learned Advocate submitted that the applicants manufacture rubber processing chemicals and paints; that the impugned goods after undergoing manufacture and packing in bags are duly entered in the RG-1 register; that later on finding that the goods were not meeting the buyers exact specifications and requirements and were not in marketable condition were taken to the Plant for reprocessing by making suitable entries in the RG-1 register- that after the processing they are entered in RG-1 register and cleared on payment of duty for sale; that the Commissioner has demanded the duty for the extended period from April, 1993 to January, 1998 by issuing show cause notice on 4-1-99; that another show cause notice dated 29-1-99 was issued demanding duty for the period August, 1998 to December, 1998; that for the period in between from February, 1998 to July, 1998, demand issued to them has been dropped by the then Commissioner of Central Excise under Adjudication Order No. 29/2000, dated 29-10-2000 by extending the benefit of Notification No. 217/86-C.E., dated 2-4-86 and Notification 67/95-C.E.. The learned Advocate also mentioned that under Board's Circular No. 22/71/CX. 6, dated 30-10-71, it is permissible for the manufacturers to effect transfer of damaged or defective excisable goods from the store-room of their factory for reprocessing within the factory without payment of duty; that this is also evident from Note 4 below RG-1 documents which provides "duty free removals for samples, destruction and for reprocessing of goods accounted in the RG-1 register should have been shown in column 11 and 12; alternately the learned Advocate submitted that benefit of Notification No. 217/86 is also available to them for captive consumption. He also mentioned that the documents maintained by them would show that the goods movement take place for reprocessing under meticulous documents. He also relied upon the decision in the case of Shakti Iron and Steel Co. Ltd. v. Commissioner of Central Excise, Jam-shedpur reported in [2001 (134) E.L.T. 130 (T) = 2000 (39) RLT 565 (CEGAT)] wherein CI sleepers which were broken and captively remelted were held to be eligible for the benefit of Notification 217/86. Reliance was also placed on the decision in the case of U.P. State Sugar Corporation Ltd. v. CCE reported in [1999 (107) E.L.T. 674] and Tide Industries v. CCE reported in [2001 (133) E.L.T. 426].
3. Opposing the prayer, Shri A.K. Jain, learned SDR submitted that the impugned goods were manufactured by the applicants and they reached the RG-1 stage; that once the goods have been entered in RG-1, they can be removed only on payment of Central Excise duty; that admittedly, the applicants had not taken any permission to remove these goods for so called processing; that no procedure at all was followed by them and the Commissioner has given his findings in the adjudication order that there are plenty of1 doubts whether actual reprocessing was possible on the impugned finished goods since the defects were not identified by chemical tests before the Departmental officers. The learned DR also contended that the decisions relied upon by the learned Advocate are not applicable to the facts of the present matter; that e.g. in the case of CCH v. Supreme Industries reported in 1999 (109) E.L.T, 704 (T), relied upon by the learned Advocate, the assessee had duly informed the Department about the removal of the goods for reprocessing/recycling which is not so in the present matter.
4. We have considered the submissions of both the sides. Learned Advocate has shown the documents for the movement of goods for reprocessing and the return of the goods after reprocessing, their entries in RG-1 register at both times of removal and at the time of their receipt after reprocessing. In addition, it is also on record that during the period from February, 1998 to July, 1998, the then Commissioner has extended the benefit of Notification No. 217/86 on the basis of similar facts. Accordingly, we are of the view that the applicants have made out a strong prima facie case in their favour. We, therefore, stay recovery of the entire amount of duty and penalty during the pendency of the appeals. Both the appeals will come up for final hearing on 27-2-2002.