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F. No. V.69/15-338/Adj/2011 OIO 78 /Commr/2013 M/s Flora Ceramic Pvt Ltd
Page 1 of 24
lhek “kqYd ,oa dsUnzh; mRikn “kqYd vk;qDrky;] dsUnzh; mRikn Hkou] jsl dkslZ] fjax jksM jktdksV-360001 CENTRAL EXCISE & CUSTOMS COMMISSIONERATE
CENTRAL EXCISE BHAVAN : RACE COURSE RING ROAD RAJKOT 360 001
Phone – (0281) 2442030, 2441980, 2441982 Fax – (0281) 2443313, 2452967 Email: cexrajkoad1@sancharnet.in Qk- la- F.No. V.69/15-338/Adj/2011
By RPAD/HAND DELIVERY
vkns”k dh rkjh[k Date of order
17.07.2013 ewy vkns”k la- ORDER IN ORIGINAL NO. 78/COMMR/2013
tkjh djus dh rkjh[k Date of Issue
18.07.2013
vkns”kdrkZ Ordered by
वी प नाभन vk;qDr
ds-m-“kq- vk;qDrky; jktdksV V. Padmanabhan Commissioner,
Customs & Central Excise, Rajkot.
ds lanHkZ esa In the case of
M/s. Flora Ceramic Private Limited, 8-A, National Highway, Lakhdhirpur Road, Morbi 363642
dkj.k crkvks la- ,oa frfFk Show Cause Notice No. & Date
V.69/AR-MORBI-DIV.II /32/ COMMR./2013 dated 26.02.2013
1. जस य (य ) को यह ित भेजी जाती है, उसे य गत योग के िलए िनःशु क दान क जाती है। This copy is granted free of charge for private use of the person(s) to whom it is sent. 2. इस आदेश से असंतु कोई भी य इस आदेश क ाि से तीन माह के भीतर सीमा शु क, उ पाद शु क एवं सेवाकर अपीलीय यायािधकरण, अहमदाबाद पीठ को इस आदेश के व अपील कर सकता है। अपील सहायक र ज ार, सीमा शु क,
उ पाद शु क एवं सेवाकर अपीलीय यायािधकरण,O-20, मेघाणीनगर, यु मे टल हॉ पीटल क पाउ ड, अहमदाबाद-380 016 को स बोिधत होनी चा हए। Any person deeming himself aggrieved by this Order may appeal against this Order to the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad Bench within three months from the date of its communication. The appeal must be addressed to the Assistant Registrar, Customs, Excise and Service Tax Appellate Tribunal, O-20, Meghani Nagar, Mental Hospital Compound, Ahmedabad-380 016. 3. उ अपील ा प सं. इ.ए.3 म दा खल क जानी चा हए। उसपर के य उ पद शु क (अपील) िनयमावली, 2001 के िनयम 3 के उप िनयम (2) म विन द य य ारा ह ता र कए जाएंगे। उ अपील को चार ितय म दा खल कया जाए तथा जस आदेश के व अपील क गई हो, उसक भी उतनी ह ितयाँ
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संल न क जाएँ (उनम से कम से कम एक ित मा णत होनी चा हए)। अपील से स बंिधत सभी द तावेज भी चार ितय म अ े षत कए जाने चा हए।
The Appeal should be filed in form No. E.A.3. It shall be signed by the persons specified in sub-rule (2) of Rule 3 of the Central Excise (Appeals) Rules, 2001. It shall be filed in quadruplicate and shall be accompanied by an equal number of copies of the order appealed against (one of which at least shall be certified copy). All supporting documents of the appeal should be forwarded in quadruplicate.
4. अपील जसम त य का ववरण एवं अपील के आधार शािमल ह, चार ितय म दा खल क जाएगी तथा उसके साथ जस आदेश के व अपील क गई हो, उसक भी उतनी ह ितयाँ संलगन क जाएंगी (उनम से कम से कम एक मा णत ित होगी)।
The Appeal including the statement of facts and the grounds of appeal shall be filed in quadruplicate and shall be accompanied by an equal number of copies of the order appealed against (one of which at least shall be a certified copy.) 5. अपील का प अं ेजी अथवा ह द म होगा एवं इसे सं एवं कसी तक अथवा ववरण के बना अपील के कारण के प शीष के अंतगत तैयार करना चा हए एवं ऐसे कारण को मानुसार मां कत करना चा हए। The form of appeal shall be in English or Hindi and should be set forth concisely and under distinct heads of the grounds of appeals without any argument or narrative and such grounds should be numbered consecutively. 6. अिधिनयम क धारा 35 बी के उपब ध के अंतगत िनधा रत फ स जस थान पर पीठ थत है, वहां के कसी भी रा ीयकृत बक क शाखा से यायािधकरण क पीठ के सहायक र ज ार के नाम पर रेखां कत माँग ा ट के
ज रए अदा क जाएगी तथा यह माँग ा ट अपील के प के साथ संल न कया जाएगा। The prescribed fee under the provisions of Section 35 B of the Act shall be paid through a crossed demand draft, in favour of the Assistant Registrar of the Bench of the Tribunal, of a branch of any Nationalized Bank located at the place where the Bench is situated and the demand draft shall be attached to the form of appeal. 7. यायालय शु क अिधिनयम, 1970 क अनुसूची-1, मद 6 के अंतगत िनधा रत कए अनुसार संल न कए गए आदेश क ित पर 5.00 पया का यायालय शु क टकट लगा होना चा हए। The copy of this order attached therein should bear a court fee stamp of Re. 1.00 as prescribed under Schedule 1, Item 6 of the Court Fees Act, 1970. 8. अपील पर भी . 5.00 का यायालय शु क टकट लगा होना चा हए। Appeal should also bear a court fee stamp of Rs. 5.00.
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Brief facts of the case:
M/s. Flora Ceramic Private Limited, 8-A, National Highway,
Lakhdhirpur Road, Morbi 363642 (hereinafter referred to as Noticee)
registered as manufacturer of various excisable goods falling under
the First Schedule to the Central Excise Tariff Act, 1985, vide
Registration No: AABFF6275FXM001, are availing the benefit of
Cenvat credit on the inputs and input services used by them as per
provisions of the Cenvat Credit Rules, 2004, to be used in or in
relation with the manufacture of their various final products.
2.1 During the course of Audit under EA-2000, under taken by the
Officers of Internal Audit Department, Hq. Rajkot on 23.12.2010, it
was noticed that Noticee had earned an income on account of sale of
Body Clay Powder. It was further revealed that the said material i.e.
Body Clay Powder emerged as an intermediate product during the
course of manufacture of their finished goods i.e. ceramic glaze tiles;
that the Body Clay Powder appears classifiable under Chapter Sub-
Heading No. 2530 90 99 of First Schedule to the Central Excise Tariff
Act, 1985 which attracts NIL rate of duty; that during the course of
manufacture of Body Clay Powder, the Noticee has availed Cenvat
credit on the inputs viz. Sodium Silicate, Soda Ash, etc. and has also
availed Cenvat credit of Service Tax paid on the inputs services viz.
Insurance and Goods Transport Agency Services used by them for
procurement of various raw materials viz. various types of clay,
Wallasonite, Dolomite powder, Feldspar powder, Talc powder, etc.;
that as per definition of exempted goods given in Rule 2(d) of the
Cenvat Credit Rules, 2004, the goods chargeable at NIL rate of duty
are to be considered as exempted goods.
2.2 The Noticee at the time of audit did not agree with the
departmental contention of reversal of an amount @ 5% / 10% of the
value of exempted goods. However they paid proportionate Cenvat
credit on inputs amounting to Rs. 2,29,494/- along with interest of
Rs. 21,815/- and Service Tax on input services. They also paid an
amount of Rs.4,87,521/- plus interest of Rs.99,500/- vide common
Challan No: 00010 dated: 12.05.2011.
3. The Superintendent of Central Excise, A. R. Morbi conducted a
survey in the backdrop of the facts that instances had come to the
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notice of the department that certain manufacturers of the Ceramic
Glazed Tiles were also engaged in the production of Body Clay Powder
classifiable under Chapter Sub-Heading No: 2530 90 99 of First
schedule to Central Excise Tariff Act, 1985 and were clearing the
same for home consumption. However the details of the said
production and clearance were not made available to the department
in their various statutory returns. As a part of survey, the
Superintendent of Central Excise, A. R. Morbi vide his letter dated
04.01.2011 requested the Noticee to confirm whether they are
engaged in production and sales for home consumption of Body Clay
Powder, whether they have availed Cenvat Credit on the inputs and
input services used in the manufacture of Body Clay Powder and if so
whether they have maintained separate account as stipulated under
Rule 6(2) of the Cenvat Credit Rules, 2004 or have filed option as per
Rule 6(3A) of the Cenvat Credit Rules, 2004. The Noticee was also
further requested to provide the details of the clearance effected from
2005-2006 to 2010-2011.
4. It appeared that body clay powder is prepared by mixing of
various types of clays and minerals in ball mill i.e. various
clays/minerals like ball clay, feldspar, quartz, kaolin, bentonite,
dolomite, talc powder, lime stone and wallastonite, etc; that these raw
materials are mixed with water in ball mill to form slurry/paste and
which is dried and then passed on to spray dryer. Thus, Ceramic
Body Clay Powder which is in powder granule form, can more or less
be described as a dried mixture of various materials used. Further two
additional items – STPP and Sodium Silicate are used in very small
quantities.
5.1 As per Note 1 of the Chapter 25 of Schedule to Central Excise
Tariff Act, 1985, which falls under Section V, Mineral Products
include Salt; Sulphur; earths and stone; plastering materials, lime
and cement and clearly covers the product which is:
(i) in crude state
(ii) has been washed
(iii) crushed and powdered
The body clay powder is a mixture of various types of clays and
minerals in ball mill, which are mixed with water to form slurry/paste
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and on being dried and passed to spray dryer, becomes Ceramic Body
Clay Powder, in powder granule form. Further two additional items –
STPP and Sodium Silicate are used in a very small percentage. The
said body clay powder appears appropriately classifiable under
Chapter 25 of first schedule to the Central Excise Tariff Act, 1985.
5.2 As per Note 4 of Chapter 25 of first schedule to Central Excise
Tariff Act, 1985, Heading No: 2530 covers the products which are
earth materials, whether or not calcined or mixed together. The body
clay powder is appropriately classifiable under Tariff Heading No:
2530 90 99 of the first schedule to Central Excise Tariff Act, 1985,
since, consequent to addition of two additional items – STPP and
Sodium Silicate and entire new product comes into existence.
Therefore it cannot be said that the inputs as such have been
removed. The inputs have been mixed to form the new product.
6. It further appeared that the Noticee are engaged in manufacture
and clearance of Body Clay Powder which emerges as an intermediate
product during the course of manufacture of their finished goods i.e.
ceramic glaze tiles; that some quantity of Body Clay Powder was
cleared for domestic consumption; that the Body Clay powder is
classifiable under Chapter Sub-Heading No: 2530 90 99 of First
schedule to Central Excise Tariff Act, 1985 and attracts NIL rate of
duty; that as per definition of exempted goods given at Rule 2(d) of
Cenvat Credit Rules, 2004, the goods chargeable to NIL rate of duty
are to be considered as exempted goods; that during the course of
manufacture of the Body Clay Powder, the Noticee has availed Cenvat
credit on the inputs viz. Sodium Silicate, Soda Ash, etc. and have also
availed Cenvat credit of Service Tax paid on the inputs services viz.
Insurance and Goods Transport Agency Services used by them for
procurement of various principle raw materials viz. various types of
clay, Wallasonite, Dolomite powder, Feldspar powder, Talc powder,
etc.
7. As per Rule 6(1) of Cenvat Credit Rules, 2004, CENVAT credit
shall not be allowed on such quantity of inputs and input services
used in or in relation to the manufacture of exempted goods except in
the circumstances mentioned in sub-rule (2) of Rule 6 of Cenvat
Credit Rules, 2004 which places onus on the manufacturer, who
avails CENVAT credit in respect of any inputs or input services and
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manufactures such final products which are chargeable to duty or tax
as well as exempted goods to maintain separate account. However,
the Noticee has not maintained separate account which is in violation
of the provisions of Rule 6(1) of Cenvat Credit Rules, 2004 and Rule
6(2) of Cenvat Credit Rules, 2004. They have also not exercised the
option under Rule 6(3A) of Cenvat Credit Rules, 2004 at the relevant
time. Therefore, as per provisions of Rule 6(3) (i) of Cenvat Credit
Rules, 2004 the Noticee are under an obligation to pay an amount
equivalent to 5% of the value of the exempted goods cleared after
07.07.2009 and 10% of the value of the exempted goods cleared prior
to 07.07.2009. It appeared that Noticee vide their letter dated
12.05.2011 themselves had reported that they had reversed the
amount to the extent of cenvat credit attributable to the proportionate
quantity of input/ input services used in production of Body Clay
powder along with interest till date. Since they have not exercised the
option available to them under Rule 6(3A) of Cenvat Credit Rules,
2004 at the relevant time, the said act of the noticee appeared not to
be in accordance with the provisions of Cenvat Credit Rules, 2004.
Thus, it appeared that since the Noticee have not paid the amount in
terms of Rule 6(3) (i) of Cenvat Credit Rules, 2004, therefore, the same
is liable to be recovered under Rule 14 of the Cenvat Credit Rules,
2004.
8. The said Body Clay Powder was removed without payment of
the amount at the rates prescribed in Rule 6 (3)(i) of Cenvat Credit
Rules, 2004 as required as per Explanation-II of Rule 6 of Cenvat
Credit Rules, 2004 as it stood prior to 31.03.2011. Further, the fact of
emergence of the said body clay powder at the intermediate stage, its
sale by them without proper cover of valid Central Excise invoice,
availment of Cenvat credit on the inputs and input services used in or
in relation with manufacture of the said body clay powder, non
maintenance of separate records as per Rule 6(2) of Cenvat Credit
Rules, 2004 are in violation of Cenvat Credit Rules, 2004. This fact
came on records only when the audit and survey was conducted. Therefore, it appeared that the Noticee had deliberately suppressed
the material facts from the department with an intention to avoid
payment of an amount under rule 6 (3) of Cenvat Credit Rules, 2004
as amended. Hence, it appeared that this is a fit case for invoking the
extended period of five years under proviso to section 11A of the
Central excise Act, 1944 to recover the amount. It also appeared that
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by acting in the manner as aforesaid the said noticee has also
rendered themselves liable to penalty under rule 15 of Cenvat Credit
Rules, 2004 read with section 11AC of the Central excise Act, 1944.
9. Thus, the Noticee was called upon to Show Cause as to why:
(i) the said body clay powder should not be appropriately
classified under Tariff Item No: 2530 90 99 of first
schedule to the Central Excise Tariff Act, 1985;
(ii) The amount of Rs. 57,44,975/- (Basic Excise Duty: Rs.
55,77,647/- + 2% Education Cess: Rs. 1,11,552/- + 1%
Sec and Higher Secondary Edu. Cess: Rs. 55,776/-), as
calculated in Annexure “B” of the Show Cause Notice,
recoverable as per sub-rule 3 of rule 6 of the Cenvat
Credit Rules, 2004 should not be recovered from them
under rule 14 of the Cenvat Credit Rules, 2004 read with
proviso to Section 11A of Central Excise Act, 1944, by
invoking the extended period of limitation, alongwith
interest under Section 11AA (erstwhile section 11AB) ibid;
(iii) An amount of Rs. 7,17,014/- and Rs. 1,21,316/- paid
towards interest vide Challan No: 00010 dated:
12.05.2011 should not be appropriated/adjusted against
the demands proposed at (ii) above; and
(iv) Penalty under rule 15 of the Cenvat Credit rules, 2004
read with Section 11AC of the Central Excise Act, 1944
should not be imposed upon them.
DEFENCE AND SUBMISSION : 10. The Noticee vide letter dated 08.05.2013 submitted their
reply and stated that the issue revolves around classification of body
clay powder and applicability of provisions of rule 6 of CCR, 2004;
that if Body Clay Powder merits classifiable under tariff sub-heading
2530 90 99 which attracts NIL rate of duty, then the provisions of
Rule 6 of CCR, 2004 will come into the picture or otherwise; that
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they do not agree that body clay powder is falling under CETH
25309099; that the Notes contained in Chapter clearly define that:
'1. Except where their context or Note 4 to this Chapter
otherwise requires, the headings of this Chapter cover only
products which are in the crude state or which have been
washed (even with chemical substances eliminating the
impurities without changing the structure of the product),
crushed, ground, powdered, levigated, sifted, screened,
concentrated by flotation, magnetic separation or other
mechanical or physical processes (except crystallization), but not
products that have been roasted, calcined, obtained by mixing or
subjected to processing beyond that mentioned in each heading.
The products of this Chapter may contain an added anti-
dusting agent, provided that such addition does not render the
product particularly suitable for specific use rather than for
general use.'
Note 4 of Chapter 25 reads as under:
'4. Heading 2530 applies, inter alia, to: vermiculite, perlite and
chlorites, unexpanded; earth colours, whether or not calcined or
mixed together; natural micaceous iron oxides; meerschaum
(whether or not polished pieces); amber; agglomerated
meerschaum and agglomerated amber, in plates, rods, sticks or
similar forms, not worked after moulding; jet; strontiantie
(whether or not calcined), other than strontium oxide; broken
pieces pottery, brick or concrete’
The above clarifactory notes imply that body clay powder does
not fall under CETH 2530 90 99. The said product is not in crude
form nor it is falling under other criteria listed in Note 1 of the
Chapter notes. It is rather a product that has been roasted, calcined,
obtained by mixing or subjected to processing beyond that
mentioned in each heading. They, therefore, strongly believe that
the product 'Body Clay Powder is not excisable product as it is not
falling either under CETH 2530 90 99 or in any of the other heading
of the Central Excise Tariff Act, 1985. Accordingly, 'Body Clay Powder
may not be classified under CETH 25309099, as proposed in the
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notice and, this also proves that it is not ‘excisable goods’ and hence
cannot be termed as ‘exempted goods’.
11. They submitted that preparation of 'Body Clay Powder’ by
any means does not amount to manufacture within the meaning of
Section 2(f) of the Central Excise Act, 1944. Body clay powder is one
of the input materials and it is mainly prepared from natural clay,
Rajasthani clay, local red clay etc. As such, body clay powder is
mainly containing natural clay and it may please be appreciated
that mixture of different clays does not form a new excisable
product. The final product still remains clay. It is well settled law that
if the character of material does not change by mixture and if a new
product is not emerged, such a process would not change tariff
heading of the product and may not be considered as 'manufacture’
within the definition envisaged under Central Excise Act, 1944. To levy
Central Excise duty, it is necessary that a new article should come
into existence as a result of manufacturing activity; unless there is a
finding of manufacture, excise duty is not attracted. The activity or
process in order to amount to "manufacture" must lead to emergence
of new commercial product, different from the one with which the
process started. In other words, it should be an article with different
name, character and use. Thus, a process which simply changes the
form or size of the same article or substance would not ordinarily
amount to manufacture and no excise duty would be payable unless
in a particular case by Section Note or Chapter Note of the Tariff or
by wording of the relevant heading or subheading the said process
has been specified as amounting to manufacture. They relied upon
the following cases of Hon'ble Supreme Court who also held the
same.
• Hawkins Cooker Ltd. V. Collector - 1997 (96) ELT 507 (SC)
• Delhi Cloth and General Mill Co. Ltd. V. UOI - 1977 (1) ELT (J.199) (SC)
• UOI V. Parle Products Ltd. - 1994 (74) ELT 492 (SC)
• Ujagar Prints V. UOI - 1988 (38) ELT 535 (SC)
They also relied upon the following case laws of Hon'ble Tribunal:
(i) COLLECTOR OF C. EX., PATNA Versus WAXPOL INDUSTRIES LTD-1996(85) ELT 132(T)
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Manufacture - Grinding of calcined bauxite and calcined
china day does not amount to manufacture as mere change
in form is not sufficient to hold an article to be a new
commercial commodity - Section 2(f) of Central Excises and
Salt Act, 1944 - Chapter 26 of Central Excise Tariff, [para 7}
Calcined bauxite powder and calcined china clay powder
obtained by the process of grinding the calcined bauxite and
calcined china clay respectively not liable to duty as no
process of manufacture involved in changing the physical
form of an article by grinding - Section 2(f) of Central Excises
and Salt Act, 1944 - Chapter 26 of Central Excise Tariff, [para
7]
(ii) WOLKEM INDIA LIMITED Versus COLLECTOR OF CENTRAL EXCISE, JAIPUR-1997 (92) E.L.T. 219 (Tribunal) [maintained by Hon'ble Supreme Court - 1998 (102) E.L.T. A224 (S.C)]
Manufacture - Mere powdering of lumps not amounts to
manufacture as no new commodity having come into existence
~ Section 2(f) of Central Excise Act, 1944.
- Undisputedly, the minerals are obtained by mining
operations in the form of lumps and all that is done is to crush
them into powder. The appellant has shown with the help of
the test report and affidavit also that the material remains
the same before and after grinding or crushing and its
character, composition and use remains basically the same. In
other words, no new commodity had come into existence.
[1996 (85) E.L.T. 132 (Tribunal) relied on], [paras 16, 18]
Thus, preparation of Body Clay Powder does not amount to
manufacture within the meaning of Section 2(f) of the Central Excise
Act, 1944. Therefore, it is not excisable goods.
12. As per the provisions of Rule 6 of CCR, 2004, following
are the prerequisites that-
(i) No CENVAT credit of input and input service is allowed which
is used in the manufacture of exempted goods except in the
circumstances mentioned in sub-rule (2).
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(ii) If manufacturer avails of CENVAT Credit in respect of inputs
and input services used in manufactures of final products
chargeable to duty as well as exempted goods have to
maintain separate accounts and take CENVAT Credit only on
that quantity of input and input service which is intended for
use in the manufacture of dutiable goods.
(iii) The manufacturer of exempted goods shall pay an amount
equal to ten per cent /five percent (as applicable for the
relevant period) of the total price charged by the manufacturer
excluding sales tax and other taxes.
In the instant case, for the purpose of applicability of Rule 6,
it is required to be examined whether two mischief’s of said rule viz.
"manufacture" and "exempted goods" are existing or otherwise. In
other words, it has to be checked whether emergence of "Body Clay
Powder" was result of manufacture? Whether "Body Clay Powder"
can be considered as exempted goods? The said two words viz.
"manufacture" and "exempted goods" are defined under Section 2(f)
of the Central Excise Act, 1944 and under Rule 2(d) of the CCR, 2004
respectively. It may be seen that 'Body Clay Powder' does not fall
under both the definitions. Thus, it can be summarized that sub-
rule (3) of Rule 6 applies when common inputs are used by a
manufacturer in the manufacture of dutiable goods as also in the
manufacture of exempted goods. For applicability of Rule 6(3), it is
essential that the exempted goods referred to in the rule must arise
from 'manufacture’ as defined in the Central Excise Act. To put it
differently, even if a manufacturer produces 'exempted' goods or Nil-
rated goods but the process of production does not satisfy the test of
'manufacture', it cannot be said that the provisions of Rule 6(3) are
attracted. They also submit that even if any goods are specified as
excisable goods in the Schedule to the Central Excise Tariff Act, the
duty does not get attracted unless the goods arise as a result of
'manufacture'.
13. They submitted that provisions of Rule 6 of CCR, 2004 are
applicable to manufacturer who is engaged in manufacture of
excisable goods chargeable to duty as well as exempted goods and
not to manufacturer engaged in manufacture of excisable goods
chargeable to duty as well as non excisable goods. Since they are
engaged in manufacture of dutiable and non excisable goods,
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provisions of Rule 6 are not applicable to them. They relied upon the
following decisions of Hon'ble Tribunal.
(i) UP STATE SUGAR CORPORATION LTD. Versus COMMISSIONER OF C. EX., MEERUT - 2000 (120) E.L.T. 454 (Tribunal)
(ii) COMMISSIONER OF C. EX., LUCKNOW Versus KESAR ENTERPRISES LTD. - 2001 (130) E.L.T. 93 (Tri. - Del.)
(iii) TATA IRON & STEEL CO. LTD Versus COMMISSIONER OF C. EX., MUMBAI-V 2007 (209) E.L.T. 392 (Tri. - Mumbai)
(iv) GANGA RASAYANIE Versus COMMISSIONER OF CENTRAL EXCISE, 2002 (147) E.L.T. 186 (T) Para 6.
14. They submitted that body clay powder is mainly
containing natural clay and other ingredients were in very
negligible quantity and mixture of different clays does not form
a new excisable product and the final product still remained
clay. It is well settled law that if the character of material does
not change by mixture and if a new product is not emerged,
such a process would not change tariff heading of the product.
In such a situation, even if it is considered that body clay
powder was removed as such, provisions contained in sub rule
(5) of Rule 3 of the CCR, 2004 are attracted as it was removal
of input as such and not a different product. According to the
provisions of Rule 3(5) ibid, they were required to pay amount
equal to the credit availed in respect of
such inputs. Accordingly, they worked out proportionate credit
availed on such inputs (i.e. soda ash & sodium silicate)
contained in body clay powder removed as such amounting to
Rs.2,29,494/- + interest of Rs.21,815/- under Challan No.
00010 vide e-payment receipt dated 12.05.2011.
15. As regards input services (GTA), they submitted that Rule
3(5) of the CCR, 2004 does not require reversal/ payment of
Cenvat credit of Service tax on GTA service used for
procurements of inputs. There are number of judicial
pronouncements holding that the law does not prescribe
reversal of Cenvat credit of input services (Service tax)
used for such inputs. However, to avoid undue litigation,
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they worked out proportionate use of input services i.e. GTA
in body clay powder for the period from 2007-08 to 2010-11 which
was removed as such amounting to Rs.4,87,521/- plus interest
of Rs. 99,500/- and paid under Challan No. 00010 dated 12.05.2011.
They further submitted that reversal/payment of proportionate
Cenvat credit amounts to non-availment of Cenvat credit in view of
the following decisions.
(i) CHANDRAPUR MAGNET WIRES (P) LTD. Versus COLLECTOR OF C. EXCISE, NAGPUR-1996 (81) E.L.T. 3 (S.C.)
(ii) HELLO MINERALS WATER (P) LTD. Versus UNION OF INDIA, 2004 (174) E.L.T. 422(All.)
(iii)COMMISSIONER OF CENTRAL EXCISE Versus ASHIMA DYECOT LTD. 2008 (12) S.T.R. 701 (Guj.)
16. Without admitting anything, they submitted that
government to overcome from the above situation had amended
retrospectively provisions of erstwhile Central Excise Rules, 1944,
CENVAT Credit Rules, 2001, CENVAT Credit Rules, 2002 and present
CCR, 2004 with effect from 01.09.1996. In the instant case Section 73
read with 8th Schedule of the Finance Act, 2010 amending Rule 6 of
CCR, 2004 is relevant and accordingly they had paid an amount
equal to CENVAT Credit attributable to 'Body Clay Powder' and no
further amount is required to be paid. They referred to the judgment
in the case of BURN STANDARD CO. LTD. Versus COMMISSIONER
OF CENTRAL EXCISE, SALEM, 2010 (262) E.L.T. 786 (Tri. -
Chennai), wherein Hon'ble Tribunal held that when the credit
attributable to 'exempted' goods had been reversed by an assessee,
there is no liability to pay the amount specified in rule 6(3) of the
CCR, 2004 and that the amendments made by the Finance Act 2010
were actually to clarify what was always intended and therefore
retrospective in nature. They also relied upon the judgment in the case
of COMMISSIONER OF C. EX., MANGALORE Versus KUDREMUKH
IRON & STEEL CO. LTD., 2011 (271) E.L.T. 172 (Kar.).
17. Without admitting anything, they submitted that even if it is
considered that they are required to pay an amount as per the
provisions of Rule 6(3) of CCR, 2004 then also it may be seen that the
specified rate for calculation of amount to be paid under Rule 6(3) of
CCR, 2004 was changed from 10% to 5% of the value of exempted
goods/exempted service w.e.f. 07.07.2009. However, while
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demanding the said amount in the impugned show cause notice,
rate of 10% on the value of 'body clay powder' sold after 07.07.2009
and upto 31.07.2009 has been applied, which requires correction. It
is on record that in the month of July 2009, out of five bills issued in
that month, four bills for an amount of Rs.18,11,603/- were issued
after 07.07.2009 and accordingly the demand ought to have been
reduced by Rs.90,580/-. Similarly, demand of Education cess and
Secondary and Higher Education cess on the amount of 5% and
10% is beyond the provisions of said rule. Thus, addition of amount
of Rs.1,11,552/- (2% Education Cess) and Rs.55,776/- (1%
Secondary and Higher Education Cess) in demand is totally wrong
and as such there is an excess demand of Rs.1,67,328/-.
18. The Noticee submitted that they have been clearing "Body Clay
Powder" for home consumption and for captive consumption since
April, 2008. The fact that they were availing credit in respect of
input services was on record as the details were submitted through
periodical returns and the department was aware of these facts. In
this eventuality, they cannot be held guilty of suppression of facts.
Therefore, demand beyond normal period is time barred.
19. The Noticee submitted that the question arises whether
payment of an amount contemplated in rule 6(3) of the CCR, 2004
or under similar rule in the predecessor rule was called for when
the credit attributable to the inputs services has already been
reversed. In the wake of different interpretations, the Government
amended the relevant rules with retrospective effect by the Finance
Act 2010. They submitted that when the law was not settled and in
several cases the Hon'ble Tribunal and High Courts had held that no
amount as contemplated in rule 6(3) of the Cenvat Credit Rules or
similar earlier rule was payable, there cannot be any deliberate
attempt to evade payment of duty and as such the longer period of
limitation cannot be invoked. The decision of the Larger Bench of the
Hon'ble Tribunal in the case of Nicholas Piramal (I) Ltd. Vs
Commissioner of Central Excise, Thane-I — reported in 2008 (232)
ELT refers to the differing views on the subject. This decision was
delivered on 12.8.2008 and was reversed by the Bombay High Court
vide CC v. Nicholas Piramal India Ltd., 2009 (244) E.L.T. 321 (Bom). It
is well settled that in such circumstances it cannot be justified that
an assessee indulged in suppression of facts. In the case of
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Pushpam Pharmaceuticals Company reported in 1995 (78) ELT 401
(SC), the Supreme Court has held:
4. Section 11A empowers the Department to re-open proceedings if
the levy has been short-levied or not levied within six months from
the relevant date. But the proviso carves out an exception and
permits the authority to exercise this power within five years from
the relevant date in the circumstances mentioned in the proviso, one
of it being suppression of facts. The meaning of the word both in law
and even otherwise is well known. In normal understanding it is
not different that what is explained in various dictionaries unless
of course the context in which it has been used indicates otherwise,
A perusal of the proviso indicates that it has been used in company
of such strong words as fraud, collusion or wilful default. In fact it
is the mildest expression used in the proviso. Yet the
surroundings in which it has been used it has to be construed
strictly, It does not mean any omission. The act must be deliberate. In
taxation, it can have only one meaning that the correct information
was not disclosed deliberately to escape from payment of duty.
Where facts are known to both the parties the omission by one to do
what he might have done and not that he must have done, docs not
render it suppression.
In CCE Raigad Vs. Echjay Forging Pvt Ltd. reported in 2011-TIOL-
1413-CESTAT-Mum, the Hon'ble Tribunal has held that extended
period of limitation cannot be upheld when there were differing
opinions on interpretation. As such, extended period is not available
for demand of the said amount.
20. Since Tariff Rate on Body Clay Powder claimed to be
classifiable under 2530 90 99 attracts "nil" rate of excise duty as
claimed by the notice, they are not liable to pay any amount under
Rule 14 read with Section 11A or any amount under Rule 6(3) of CCR,
2004 on clearance of 'Body Clay Powder. Therefore, question of recovery
of interest does not arise. In the same way, they are also not liable to
penalty under Rule 15 of CCR, 2004 read with Section 11 AC of the
Central Excise Act, 1944.
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21. Personal Hearing in the matter was held on 10.07.2013,
wherein Shri R.C. Prasad, authorized representative of the noticee
appeared and reiterated the submissions made by them in their letter
dated 08.05.2013. Shri Prasad also submitted copy of the following
citations:
(i) Union of India Vs. Delhi Cloth and General Mills Co. Ltd. – 1997 (1) E.L.T. (J 199) (S.C.),
(ii) Commissioner of C. Ex., Lucknow Vs. Kesar Enterprises Ltd.-
2001 (130) E.L.T. 93 (Tri.-Del.) (iii) UP State Sugar Corporation Ltd. Vs. Commissioner of C.Ex.,
Meerut- 2000 (120) E.L.T.454(Tribunal) (iv) Wolkem India Limited Vs. Collector of Central Excise,Jaipur-1997
(92) E.L.T. 219(Tribunal)
DISCUSSION AND FINDINGS:
22. I have carefully gone through the facts of the case and the show
cause notice under adjudication. I have also considered the written
and oral submissions advanced by the Noticee in reply to the show
cause notice as well as at the time of personal hearing.
23. The limited issue under consideration in the present show
cause notice is as to whether:-
(i) the said ‘body clay powder’ can be appropriately classified
under Tariff Item No: 25309099 of first schedule to the
Central Excise Tariff Act, 1985;
(ii) the amount of Rs.57,44,975/- (Basic Excise Duty: Rs.
55,77,647/- + 2% Education Cess : Rs. 1,11,552/- + 1%
Sec and Higher Edu. Cess: Rs. 55,776/-) can be
recoverable under sub Rule(3) of Rule 6 of the Cenvat
Credit Rules, read with Rule 14 of the Cenvat Credit
Rules, 2004 and Section 11A of Central Excise Act, 1944
by invoking the provisions of extended period along with
interest under Section 11AA (erstwhile Section 11AB) ibid;
(iii) penalty under Rule 15 of the Cenvat Credit Rules, 2004
read with Section 11AC of Central Excise Act, 1944 can
be imposed upon them.
24.1 The Noticee has argued that as per Notes 1 & 4 to Chapter 25,
'Body Clay Powder’ will not be classifiable under CETH 2530 90 99
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and is not an excisable product; that preparation of 'Body Clay
Powder’ by any means does not amount to manufacture within the
meaning of Section 2(f) of the Central Excise Act, 1944. They relied
upon the decisions in the case of (i) Hawkins Cooker Ltd. Vs.
Collector - 1997 (96) ELT 507 (SC), (ii) Delhi Cloth and General Mill Co.
Ltd. Vs. UOI - 1977 (1) ELT (J.199) (SC), (iii) UOI Vs. Parle Products Ltd.
- 1994 (74) ELT 492 (SC), (iv) Ujagar Prints Vs. UOI - 1988 (38) ELT 535
(SC), (v) Collector of C. Ex., Patna Vs. Waxpol Industries Ltd.-
1996(85) ELT 132(T) and Wolkem India Limited Vs. Collector of
Central Excise, Jaipur-1997 (92) E.L.T. 219 (Tribunal) [maintained by
Hon'ble Supreme Court - 1998 (102) E.L.T. A224 (S.C)].
24.2 I find that body clay powder is prepared by mixing of various
types of clays and minerals i.e. various clays/minerals like ball clay,
feldspar, quartz, kaolin, bentonite, dolomite, talc powder, lime stone
and wallasonite etc. These raw materials are mixed with water in ball
mill to form slurry/paste. After drying slurry/paste, it is passed to
spray dryer where dried mixture of various clays/minerals i.e.
Ceramic Body Clay Powder is formed. Further two additional items –
STPP (Sodium Tripolyphosphate) and Sodium Silicate are also used in
the mixture, on which the Noticee has availed Cenvat credit. The new
emerged product is a well known product called ‘body clay powder’ in
the manufacturing sector of Ceramic tiles and a number of units are
manufacturing it independently and selling it to Ceramic tile units.
The product is not simply a mixture of different clays but after under
going a number of processes, it has got characteristics of a
marketable product. In fact, the Noticee is earning income on account
of sale of Body Clay powder to its customers. I rely on the decision in
the case of Commissioner of Central Excise, Jaipur Versus
Hindustan Zinc Ltd.- 2004 (166) E.L.T. 145 (S.C.) wherein the Hon’ble
Apex Court held that “so long as a new and distinct commodity known
in the market has come into existence there is manufacture.” The
Hon’ble Supreme Court in the case of Moti Laminates Pvt. Ltd.
Versus Collector of Central Excise, Ahmedabad - 1995 (76) E.L.T. 241
(S.C.) held as under.
“7. The duty of excise being on production and manufacture
which means bringing out a new commodity, it is implicit that
such goods must be useable, moveable, saleable and marketable.
The duty is on manufacture or production but the production or
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manufacture is carried on for taking such goods to the market for
sale. The obvious rationale for levying excise duty linking it with
production or manufacture is that the goods so produced must be
a distinct commodity known as such in common parlance or to the
commercial community for purposes of buying and selling.”
I find that the impugned goods viz, ‘Body Clay Powder’ is well known
in trade parlance as a distinct commercial commodity and is being
sold and purchased in the market.
24.3. I find that Note 1 to Chapter 25 of Schedule to Central Excise
Tariff Act, 1985, which falls under Section V – Mineral Products,
includes Salt; Sulphur; earths and stone; plastering materials, lime
and cement, clearly covers the product that:
(i) is in crude state
(ii) has been washed
(iii) crushed and powdered
Further, Note 4 to Chapter 25 of first schedule to Central Excise Tariff
Act, 1985, clearly stipulates that Heading No: 2530 covers the
products which are earth materials, whether or not calcined or mixed
together. As body clay powder is prepared by mixing various
clays/minerals and also containing two Cenvatable inputs - STPP and
Sodium Silicate, I am of the opinion that the said body clay powder
has emerged as an excisable goods appropriately classifiable under
Chapter Sub-Heading No: 25309099 of first schedule to Central
Excise Tariff Act, 1985. I also find that various case laws cited by the
noticee as mentioned in para supra with regard to manufacturing do not
embrace any aspect of the present case.
25.1 The Noticee has contended that since 'Body Clay Powder' does
not fall under the definitions of Section 2(f) of the Central Excise Act,
1944 and Rule 2(d) of the CCR, 2004, therefore, Rule 6 of CCR,
2004 is not applicable to them. Accordingly, they have
reversed credit availed on inputs/input services contained in
‘Body Clay Powder’ under sub rule (5) of Rule 3 of the CCR,
2004.
25.2 The discussions hereinabove has established that the
Noticee has manufactured ‘Body Clay Powder’ classifiable under
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Chapter Sub-Heading No: 25309099 of First schedule to Central
Excise Tariff Act, 1985, which attracts NIL rate of duty. Therefore, it is
evident that ‘Body Clay Powder’ is not cleared by the Noticee as
such, hence, case on hand is not covered under Rule 3(5) of Cenvat
Credit Rules, 2004. Further, I find that the Rule 6(1) of Cenvat Credit
Rules, 2004 stipulates that CENVAT credit shall not be allowed on
such quantity of input and input services used in or in relation to the
manufacture of exempted goods except in the circumstances
mentioned in sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004,
which places the onus on the manufacturer who avails of CENVAT
credit in respect of any inputs or input services and manufactures
such final products which are chargeable to duty or tax as well as
exempted goods to maintain separate account. I find that by not
maintaining separate account under provisions of Rule 6(2) of Cenvat
Credit Rules, 2004, the Noticee has rendered themselves under an
obligation to pay an amount equivalent to 10% of the value of the
exempted goods cleared prior to 07.07.2009 and 5% of the value of
the exempted goods cleared after 07.07.2009 in terms of Rule 6(3) (i)
of Cenvat Credit Rules, 2004. I find that the Noticee had not exercised
the option as provided under Rule 6(3A) of Cenvat Credit Rules, 2004.
Therefore, the Noticee has no option except to pay amount at the
prescribed rate of 10%/5% of the value of exempted goods under Rule
6(3) (i) of Cenvat Credit Rules, 2004. As the Noticee did not discharge
their liability as per provisions of Rule 6 (3)(i) of Cenvat Credit Rules,
2004, the same is liable to be recovered under Rule 14 of the Cenvat
Credit Rules, 2004 read with Section 11A of the Central Excise Act,
1944 alongwith interest under Section 11AA (erstwhile 11AB) of the
Central Excise Act, 1944.
26. Further, I find that the said Body Clay Powder was removed
without payment of the amount at the rates prescribed in Rule 6 (3)(i)
of Cenvat Credit Rules, 2004, as required as per Explanation-II of
Rule 6 of Central Excise Rules, 2004 as it stood prior to 31.03.2011,
hence, there is violation of provisions of Rule 4 and Rule 11 of Central
Excise Rules, 2002. Also, the Noticee has failed to assess the goods as
per provisions of Rule 6 of Central Excise Rules, 2002. Since the
goods were removed in contravention of the provisions of Rule 4 and
Rule 6 of Central Excise Rules, 2002, therefore, the amount at the
rates prescribed in Rule 6(3)(i) of Cenvat Credit Rules, which is a
Cenvat Credit (and in accordance with Section 2A of Central Excise
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Act, 1944, is a duty of Central Excise required to be paid under Rule 8
of Central Excise Rules, 2002) has not been paid. The fact of
emergence of the said body clay powder at the intermediate stage, its
sale by them without cover of valid Central Excise invoices, availment
of Cenvat credit on the inputs and inputs services used in or in
relation with manufacture of the said body clay powder, non
maintenance of separate records as per Rule 6(2) of Cenvat Credit
Rules, 2004 and not intimating the fact of non maintenance of
separate records to the department is in violation of Rule 12 of
Central Excise Rules, 2002. This fact came on record only when the
audit was conducted. Therefore, I find that the Noticee had
deliberately suppressed the material facts from the department with
an intention to evade payment of an amount under rule 6(3) of Cenvat
Credit Rules, 2004, as amended. Hence, I find that this is a fit case for
invoking the extended period of five years under proviso to Section
11A of the Central Excise Act, 1944 to recover the government-dues
not paid. I also find that by acting in the manner as aforesaid, the
said Noticee is also liable to penalty under Rule 15 of the Cenvat
Credit Rules, 2004 read with Section 11AC of the Central Excise Act,
1944.
27.1 The Noticee submitted that the government, to overcome
the above situation, had amended retrospectively provisions of
erstwhile Central Excise Rules, 1944, CENVAT Credit Rules, 2001,
CENVAT Credit Rules, 2002 and present CCR, 2004 with effect from
01.09.1996. In the instant case, Section 73 read with 8th Schedule of
the Finance Act, 2010 amending Rule 6 of CCR, 2004 is relevant and
accordingly the Noticee had paid an amount equal to CENVAT Credit
attributable to 'Body Clay Powder’ and no further amount is
required to be paid.
27.2 I find that Section 73 of the Finance Act, 2010 amended rule 6
of the Cenvat Credit Rules, 2004 in the manner specified in column
(3) of the Eighth Schedule with retrospective effect, on or from and
upto the date specified in column (4) thereof, so as to provide for
payment by manufacturer of an amount equal to CENVAT credit
attributable to inputs or input services used in or in relation to
manufacture of exempted goods or goods chargeable to nil rate of duty
before or after clearance of such goods along with interest at the rate of 24% per annum. I find that the said amendment applies to the
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cases in respect of which a dispute relating to adjustment of credit on
inputs in or in relation to exempted final products relating to the
period beginning on 10th day of September, 2004 to 31st day of
March’2008 (both days inclusive) was pending on the date on which
the Finance Bill, 2010 received the assent of the President. In the
present case, the Noticee has failed to take recourse to such
amendment and from the plain reading of amendment made vide
Finance Act, 2010, it was one time opportunity and the noticee has
failed to avail the same. Also, these changes have taken effect from
8th May, 2010 on enactment of the Finance Bill, 2010 and it is
expressly provided that these provisions apply only to such cases
where the disputes are pending as on the day the Finance Bill, 2010
is enacted. For brevity and to be more specific, I reproduce the
amendments made vide Finance Act, 2010:
The Eighth Schedule to the Finance Act, 2010 is as follows:
THE EIGHTH SCHEDULE
[See Section 73(1)]
S. No.
Provisions of CENVAT Credit Rules, 2004 to be amended
Amendment Period of effect of amendment
(1) (2) (3) (4)
Rule 6 of the Cenvat Credit Rules, 2004 as published vide notification no. G.S.r. 600(E), dated the 10th Septemeber, 2004 [23/2004-CE(NT), dated the 10th Septemebr’2004]
In the CENVAT Credit Rules, 2004, in rule 6, after sub-rule (6), the following sub-rule shall be inserted, namely: ‘(7) Where a dispute relating to adjustment of credit on inputs used in or in relation to exempted final products relating to the period beginning on 10th day of September, 2004 and ending with the 31st day of March’2008 (both days inclusive) is pending on the date on which the Finance Bill, 2010 receives the assent of the President, then notwithstanding anything contained in sub-rule (1) and (2), and clauses (a) and (b) of sub-rule (3), a manufacturer availing CENVAT credit in respect of any inputs or input services and manufacturing final products which are chargeable to duty and also other final products which are exempted goods, may pay an amount equivalent to CENVAT credit attributable to inputs or input services used in, or in relation to the
10th day of September, 2004 to 31st day of March, 2008 (both days inclusive)
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manufacture of , exempted goods before or after the clearance of such goods: Provided that the manufacturer shall pay interest at the rate of twenty-four percent per annum from the due date till the date of payment of the said amount. Explanation – For the purpose of this sub-rule, “due date” means the 5th day of the month following the month in which goods have been cleared from the factory.’
27.3 It is evident from the above that the said changes by way of
insertion of sub-rule (7) to rule 6 of the Cenvat Credit Rules, 2004
were effective only for the period upto 31.03.2008 (column (4) of the
Eighth Schedule to the Finance Act, 2010 as aforesaid refers). Hence,
the provisions of sub-rule (3) to rule 6 of the Cenvat Credit Rules,
2004 are applicable for the period from 01.04.2008 onwards. In
accordance with the said provision, the noticee in the given situation
was liable to pay an amount equal to 10%/5% of the value of the
exempted goods so manufactured and cleared by them during the
notice period. Also, they would have had the option to pay amount
equivalent to the Cenvat credit attributable to inputs and input
services used in, or in relation to, the manufacture of exempted goods
as per rule 6(3)(ii) of the said rules, had they intimated the
jurisdictional Superintendent of Central Excise as envisaged in rule
6(3A)(a) of the said rules. The Noticee failed in complying with the said
requirement of rule 6(3A)(a) of the said rules. Hence, they are left with
no other option than to comply with rule 6(3)(i) of the said rules, i.e.,
to pay an amount equal to 5%/10% of the value of the exempted
goods.
28.1 The Noticee has requested for correction in demand of duty in
the impugned show cause notice as rate of 10% instead of 5% on
the value of 'Body clay powder' sold after 07.07.2009 and upto
31.07.2009 has been applied. They submitted that in the month of
July 2009, out of five bills issued in that month, four bills for an
amount of Rs.18,11,603/- were issued after 07.07.2009 and
accordingly the demand ought to have been reduced by Rs.90,580/-.
These details have been confirmed by the Range Superintendent. I,
therefore, drop the demand of amount of Rs.90,580/- .
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28.2 The Noticee’s contention that even if it is considered that
they are required to pay an amount as per the provisions of Rule 6(3)
of CCR, 2004, the demand of Education Cess and Secondary
and Higher Education Cess on the amount of 5% and 10% is
beyond the provisions of said rule and addition of amount of
Rs.1,11,552/- (2% Education Cess) and Rs.55,776/- (1%
Secondary and Higher Education Cess) in demand, is totally wrong.
I find that Rule 6(3) of CCR, 2004 is very much clear and the
manufacturer is required to pay an ‘amount’ equal to 10%/5% of the
exempted goods. Thus, the demand of ‘amount’ should be to the extent of
10%/5% of the value of exempted goods only and demand of 2% E.Cess
& 1% HSEC is required to be dropped. As regards, Service tax paid by
the Noticee of Rs.4,87,521/- on input services along with interest of
Rs.99,500/- has no relevance with the demand of amount under Rule
6(3) of CCR, 2004.
29. In view of the above, I pass the following order:
: ORDER :
(i) I order to classify ‘body clay powder’ under Tariff Item No:
25309099 of first schedule to the Central Excise Tariff Act,
1985;
(ii) I confirm the demand of the amount of Rs.54,87,067/- (Rupees
Fifty Four Lac Eighty Seven thousand Sixty Seven only) under
sub Rule (3) of Rule 6 of the Cenvat Credit Rules, 2004 and
under Rule 14 of the Cenvat Credit Rules, 2004 read with
Section 11A of Central Excise Act, 1944. As an amount of
Rs.7,17,014/- already paid by the noticee towards reversal of
amount vide Challan No:00010 dated: 12.05.2011, I order to
appropriate the same;
(iii) I drop the excess demand of Rs.90,580/- as discussed above at
para 28.1.
(iv) I drop the demand of Rs.1,11,552/- (2% Education Cess) and
Rs.55,776/- (1% Secondary and Higher Education Cess) as
discussed above at para 28.2.
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(v) I order to recover the interest at appropriate rate under Section
11AA (erstwhile 11AB) ibid. As an amount of Rs.1,21,316/-
already paid towards interest, I order to appropriate the same;
and
(vi) I impose a penalty of Rs.54,87,067/- (Rupees Fifty Four Lac
Eighty Seven thousand Sixty Seven only) upon them under
Rule 15 of the Cenvat Credit Rules, 2004 read with Section
11AC of Central Excise Act, 1944. The said noticee can avail the
option of payment of 25% of Central Excise Duty as penalty
under Section 11AC of the Central Excise Act, 1944, if the
Central Excise Duty determined under Section 11A and interest
at applicable rate under Section 11AA of the Central Excise Act,
1944 is paid within 30 days from the date of receipt of this
order. The benefit of reduced penalty shall be available only if
the amount of penalty so determined has also been paid within
the period of 30 days from the receipt of this order.
Show Cause Notice No. V.69/AR-MORBI-DIV.II/32/COMMR./2013
dated 26.02.2013 is decided accordingly.
F. No:V.69/15-338/Adj/2011 (V.Padmanabhan) Date :18.07.2013 COMMISSIONER, Central Excise and Customs , RAJKOT.
To,
M/s. Flora Ceramic Private Limited, 8-A, National Highway, Lakhdhirpur Road, Morbi 363642
Copy to: 1. The Chief Commissioner, Central Excise, Ahmedabad 2. The Deputy Commissioner, Central Excise, RRA, Rajkot 3. The Assistant Commissioner, Central Excise, Audit, Rajkot 4. The Assistant Commissioner, Central Excise, Division-II, Rajkot. 5. The Superintendent, Central Excise, AR-Morbi. 6. Guard File
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