Customs, Excise and Gold Tribunal - Mumbai
Ashok Brothers And Ashok Organics ... vs Commissioner Of Central Excise on 21 November, 2002
ORDER
G.N. Srinivasan, Member (Judicial)
1. These appeals have been filed against the decision of Commissioner of Central Excise and Customs, Vadodara wherein the Commissioner has confirmed the duty demand of Rs. 66,71,117/- in respect of excisable goods "PARACETAMOL" and imposed a penalty of Rs. 2 lakhs on each of the appellant in respect of appeal Nos. 1704/96 and 1715/96 in respect of other appeal No. 2317/96 the duty demand is Rs. 47,83,311/-+ modvat credit availed on various amounts.
2. The adjudicating authority had held that the duty is demanded on the ground that the dutiable items and the raw materials have not been properly intimated to the adjudicating authority by the job worker who was manufacturing the goods under Rule 57F(4) of the Central Excise Rules. He has also in the impugned order justified invocation of the larger period of limitation that the job worker Ashok Brothers did not invoke the same against the present appeals.
3. Ld. Counsel for the appellants has stated that the assessee vide letter dated 23.02.89 has informed the Asst. Collector of Central Excise that they are manufacturing "PARACETAMOL" on job work basis from Ashok Brothers who are coordinating the business in the adjudicating floor. The assessee's address is 41A GIDC Estate, Nandesari, Baroda whereas Ashok Brother's address is 41C GIDC Estate, Nandesari, Baroda. The fact that 'PARACETAMOL' is the final product has also been mentioned in page 3 of the enclosure to the subject letter. It is, therefore, contended by the Ld. Counsel that wen the nature of the inputs and the final products are mentioned in the letter dated 23.2.89 it does not lie in the mouth of the adjudicating authority to include larger period of limitation alleging suppression of facts. As far as bill of entries are concerned the assessee has written a letter dated 21.03.89 addressed to Supdt. of the range mentioning that Ashok Brothers purchase from open market certain raw materials namely bought out items. It is therefore, contended by the Ld. Counsel that even though the final product exist from the raw materials their job worker falling under Rule 57F(2). Therefore, invocation of the larger period of limitation is wrong in law. As against this Ld. DR Shri George strenuously and fervently opposes the plea that when the conversion of raw material into final product happened at the hands of Ashok Brothers it is duty casts upon the person inform the Department. Therefore, he pleads fervently that there is justification for invocation of the larger period of limitation alleging suppression of particulars in the present state of affairs.
4. We have considered the rival submissions and also perused the two letters dated 23.2.89 and 21.3.89. The said two letters are extracted below:-
Letter No. 609/57F(2)/171/89 dt.23.2.89:
"Dear Sir, We Ashok Organic Industries Ltd., 41-a, GIDC, Nandesari are holding L4 Licence to manufacture goods falling under Chapters 28, 29 and 39. We are availing MODVAT system.
Now we have engaged M/s. Ashok Brothers, 41-C, GIDC, Nandesari to manufacture our Paracetamol of Chapter 29 and sub-heading No. 2907.90 on job work basis and the said material pulverised into power form will be our finished product for sale. We undertake to pay the Excise duty on our finished product. We are forwarding herewith our application in triplicate in the prescribed form duly filled in for granting us permission to do so under Rule 57F(2). We will follow the procedure laid down under Central Excise and Salt Act 1944.
Thanking you Yours faithfully, For Ashok Organic Inds. Ltd.
Sd/- R.J. Patel"
Letter No. 609/57F(2)/898/89 dated 21.03.89 "Dear Sir, Please refer to our letter No. 609/57F(2)/171/89 dated 23.2.89.
With reference to the above, we are pleased to inform you that we have already obtained the permission under Rule 57F(2) for manufacturing Paracetamol on job work basis from M/s. Ashok Brothers for manufacture of Paracetamol, we supply the following inputs which are our own final products namely (1) Acetic Anhydride (2) Hydrochloric Acid (3) EDTA and (4) Dilute Acetic Acid. We also inform you that we are supplying the following products purchased by us from open market and issued to M/s. Ashok Brothers for manufacture of Paracetamol namely (1) Paragraph Nitrochloro Banzane (PNCB) (2) Caustic Soda Lye (3) Sodium Hydro Sulphite (4) Activated Carbon and (4) Cast Iron Powder. For the above said products, we will maintain the necessary record/registers issue slips for receipts removal, consumption, and manufacture of excisable goods. M/s. Ashok Brothers will also maintain private records accordingly. This is for your kind information.
Thanking you, Yours faithfully, For Ashok Organic Inds. Ltd.
Sd/-
(Authorised Signatory)"
5. From the perusal of the above two letters it will be very clear that the Department was in the possession of the facts which led to conclusion that from raw materials stage to the finished product how goods were manufactured by the job worker and how provisions of Rule 57F(2) of the Rules have been followed. Therefore the decision on invocation of larger period of limitation is order dated 07.03.95 is not called for. We have taken note of the Ld DR's argument that Ashok Brothers have not informed the Department. But in our view this argument lacks substance. The appellant in this case is Ashok Organic Industries Ltd. and not Ashok Brothers. The modvat credit is taken by the manufacturer assessee namely - Ashok Organic Industries Ltd. It is, therefore, not fair to argue that Ashok Brothers have failed to inform Department when the full particulars of the products ranging from raw materials stage to final product is available with the Department, the case has been rightly made out for the appellants. Department does not have any case at all. The impugned orders are set aside and appeals have been allowed with consequential relief, if any. Ld. Counsel does not press on the imposition of duty of Rs. 2,98,655 and Rs. 6,18,305/- for goods found shortage. Of this the appeal is dismissed as far as these amounts are concerned. For the above two amount of duties which has been admitted we impose a penalty of Rs. 50,000/-. Subject to the above stand disposed of in the above terms.