Custom, Excise & Service Tax Tribunal
M/S. Ruchi Soya Industries Ltd vs C.C.E. & S.T. Bhopal on 21 November, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Excise Appeal No. E/52102-52105/2014-Ex[DB]
Excise Stay No. E/52609-52612/2014
[Arising out of Order-In-Appeal No. BPL-EXCUS-000-APP-277-13-14 dated 3.3.2014 passed by Commissioner of Customs, Central Excise & Service Tax, Bhopal]
For approval and signature:
Honble Mrs. Archana Wadhwa, Judicial Member
Honble Mr. Rakesh Kumar, Technical Member
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Ruchi Soya Industries Ltd. ...Appellant
M/s. Ruchi Soya Industries Ltd.
Vs.
C.C.E. & S.T. Bhopal Respondent
Appearance:
Shri G.L.Rawal & Rajesh Rawal, Advocate for the Appellant Shri M.S. Negi, AR for the Respondent Coram:
Honble Mrs. Archana Wadhwa, Judicial Member Honble Mr. Rakesh Kumar, Technical Member Date of Hearing/ Decision: 21.11.2014 FINAL ORDER NO. 54580-54583/2014_ PER: Archana Wadhwa:
All the four appeals are being disposed of by a common order as they arise out of the same set of facts and circumstances.
2. After hearing both the sides duly represented by Shri G.L.Rawal & Rajesh Rawal, Advocate for the Appellant & Shri M.S. Negi, AR for the Respondent we find that the appellant is engaged in the manufacture of refind soya oil. Apart from that they are also manufacturing tin containers falling under chapter 73 of Central Excise Tariff Act, with the aid of power, which are being used by them captively for the packing of refind soya oil.
3. The dispute in the present appeal relates to duty liability in respect of the said tin containers, which according to the appellant are exempted from payment of duty in terms of notification No. 10/96-CE dated 23/07/1996. The said notification grants exemption to the excisable goods from the whole of duty of excise leviable thereon subject to the condition that the said goods are consumed within the factory of their production in the manufacture of goods specified in the table annexed to the said notification. Admittedly soya oil is classifiable under chapter heading 15 of Central Excise Tariff which is one of the specified items. In as much as tin containers manufactured by the appellant stand consumed within the factory for packing of the refind soya oil, the appellants have claimed the benefit of the said notification.
4. Revenue, being of the view that use of tin containers for packing of soya oils cannot be held consumption of goods in the manufacture of the specified goods and as such benefit of the notification would not be available, initiated proceedings against them for denial of the exemption. The notices issued to the appellant culminated into an order passed by the original Adjudicating Authority vide which he confirmed the demand on the tin containers, cleared by the appellant, without payment of duty but did not impose any penalty on the ground that the issue is of interpretation of the notification, no malafide can be attributed to the appellant.
5. The said orders passed by the Joint Commissioner were appealed against by the assessee as also by the Revenue. Commissioner (Appeals) rejected the appeals filed by the assessee and upheld the confirmation of the demand of duty. He also allowed the appeals filed by the Revenue, in respect of the penalty, by observing that penalty is required to be imposed. The present appeals stand filed against the order of Commissioner (Appeals).
6. It is seen that an identical issue was the subject matter of the Tribunals decision in the case of Mihijam Vanaspati Ltd. It was held that the tin containers manufactured in the appellants factory and used for packing of Vanaspati have to be regarded as having been consumed within the factory of manufacture and the benefit of the notification would be available. The said decision stands followed by the Tribunal in the case of Rama Phosphate Ltd. vs. Commissioner of Central Excise Indore, 2003 (152) ELT 315 Tribunal Delhi.
However when the attention of the original Adjudicating Authority was drawn to the said decision of the Tribunal in the case of Mihijam Vasnaspati Ltd, he observed that as under:
I have carefully gone through the contents of the above decisions and observed that the decision of Honble Tribunal Kolkata in the case of Mihijam Vanapati Ltd., Vs. Commissioner of C. Excise Jamshedpur reported in 2001 (129) E.L.T. 631 (Tri. Kolkata) interpretate the term consumption employed in the notification No. 10/96-CE and extended benefit to metal containers used in packing Vanaspati under the said notification. This decision of the Tribunal is based on the law laid down by the Supreme Court in the case of UOI vs. VM Salgonkar & Brothers (P) Ltd., 1988 (99) ELT 3 and Deputy Chief Controller of Import and Export vs. K.T. Kosalram 1999 (110) ELT 366(5C).
The Tribunal while arriving at the decisions appears to have failed to appreciate the law laid down by the Apex Court in right earnest in both the above decisions inasmuch as in the former case the Apex Court held that any sort utilization would amount to consumption of the article, albeit that article retaining its identity even after use while in the later case the Court has held that the clause using the word consumption convey the idea of using up the goods. Both the decisions of the Apex Court are in relation to utilization of the articles in forming final products. The meaning of term use and using up are totally different. Accordingly, he observed that filling of oil in tin containers is undoubtedly not a process of manufacture and it cannot be said that tin containers are used in the manufacture of soya oil and as such packing material cannot be said to have been consumed in the manufacture of the Final Product.
7. We do not appreciate the above reasoning of the Joint Commissioner. Admittedly the issue in the case of Mijhijam Vanaspati Ltd. was identical to the issue before the Adjudicating Authority. The Triubnal having declared the law in respect of the same very notification, the original authority was bound to follow the same, unless the said declaration of law stand set aside by any other higher forum. It was not open to the original adjudicating authority to take a different view by introducing his own interpretation and by taking support of other decision which are not directly on the point. It is not the case of the Revenue that the said decision of the Tribunal was not accepted and was appealed against by them. In the absence of any such developments, it goes without saying that the Tribunals orders are binding on the lower authority, who should have followed the same.
8. Having said so, we are of the view that inasmuch as issue is finally decided, the impugned orders are not sustainable. Accordingly, the same are set aside and all the appeals are remanded to the original adjudicating for passing fresh orders in the light of the law declared by the tribunal in the above referred cases.
(ArchanaWadhwa) Member(Judicial) (Rakesh Kumar) Member(Technical) NSB