P. Anjani Kumar ORDER
P. Anjani Kumar, Member (T)
1. The appellants have challenged Order-in-Appeal No. 128/2009 passed by Commissioner of Central Excise (Appeals), Bangalore.
2. Briefly stated that the facts of the case are that the appellant is engaged in the manufacture of cookies, biscuits, cakes, chocolates, sugar confectionaries; appellant was availing exemption under 8/2001 dated 01.03.2001 amended from time to time as applicable to small-scale industries (SSI). The appellants have availed the exemption on certain clearances of excisable goods chargeable to NIL rate of duty during the period 01.04.2004 to 29.10.2004 and claimed exemption as is applicable to clearance of non-excisable products in terms of Notification No. 08/2003. Department has denied the benefit and have issued a show cause notice which was confirmed by the lower authorities and was upheld by the impugned order.
3. Learned Counsel for the appellants, Sh. Raghavendra, submits that the appellant was under bona fide belief that the value of goods cleared under a brand name and also goods which are cleared at NIL rate of duty are not includable for the purposes of turnover of the previous financial year; the appellants have paid the duty demanded of Rs. 16,15,476/- on 15.03.2007 under protest. Learned Counsel submits that the proviso inserted vide Notification No. 8/2006-CE clarifies that for the purpose of computation of aggregate turnover does not include the goods cleared at NIL rate of duty. It is therefore, submitted that the appellant has rightly claimed SSI exemption under Notification No. 8/2003-CE for the period 2004-05 and paid duty after crossing the SSI exemption limit. Learned Counsel also submits that the following decisions of the Tribunal are in their favour:
(i) Prakash Metal Works Vs. CCE, Ahmedabad - MANU/CS/0070/2012 : 2012 (283) ELT 403 (Tri. Ahmd.).
(ii) Shivraj Tobacco Co. (P) Ltd. Vs. CCE, Kanpur - MANU/CE/1152/1997 : 1998 (103) ELT 70 (Tri.)
(iii) Vindhyachal Process Corporation Vs. CCE, Bhopal - 2001 (136) ELT 1382 (Tri. Del.)
4. Learned Counsel fairly submits that there are decisions of Tribunal passed against the appellant and therefore he is mainly relying on the point of limitation; the appellant was in continuous correspondence with the Department as can be seen from the letters dated 26.03.2003 and 01.04.2004; they have not suppressed any facts with intent to evade payment of duty and therefore extended period cannot be invoked. He submits that the issue involves interpretation of a notification and therefore extended period cannot be invoked as the appellant had bona fide belief; consequentially, the demand, interest and penalty are liable to be set aside. He relies upon the decision of this Bench in the case of Grand Ashok Vs. the Commissioner of Central Excise, MANU/CB/0236/2018 : 2018 (7) TMI 994 - CESTAT BANGALORE.
5. Sh. K.B. Nanaiah, Authorized Representative appearing for the Department submits that it has been held in the following cases that for the purpose of aggregate clearances in the previous year, the value of goods cleared under NIL rate of duty are also includable:
(i) M/s. Cholayil Pharmaceuticals (P) Ltd. Vs CCE, (Ports-import)
Chennai-II, 2017 (8) TMI 1212-CESTAT Chennai.
(ii) M/s. Malabar Regional CO-OP. Milk Producers Union Ltd. VS CCE, Cochin, MANU/CB/0495/2008 : 2009 (237) ELT 363 (Tri. Bang.).
(iii) Grand Ashok Vs. Commissioner of Central Excise, Bangalore, MANU/CB/0236/2018 : 2019 (365) ELT 828 (Tri. Bang.).
(iv) Syncom Formulations (India) Ltd. Vs CCE & Customs, Indore, MANU/MP/1139/2007 : 2008 (221) ELT 206 (M.P.).
5.1. Learned Authorized Representative also submits that extended period is invokable as the appellants have quite aware of the provisions of law and have suppressed the facts willingly. They cannot claim bona fide belief and he relies upon the decision in the case of CCE, Visakhapatnam Vs. Mehta & CO. Mehta & CO. 2011 (264) ELT 481 (SC)
6. Heard both sides and perused the records of the case.
7. We find that the appellants have been availing the exemption notification available for small-scale industries and have been filing intimations as required under Central Excise Rules. We find that they have filed Intimations dated 01.04.2003, 01.04.2004 under Rule 11(6) and under Rule 173B. They have filed a declaration effective from 01.03.2001 indicating that they will be clearing bread, bun etc. falling under sub-heading 1985.90 of CETA chargeable to NIL rate of duty. We find that the wordings of Notification No. 8/2003 are very clear. Condition No. (vii) of the Notification No. 8/2003 reads as follows:
"The aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories or from a factory by one or more manufacturers does not exceed Rs. 300 lakhs in the present financial year."
And Condition No. 3(a) clarifies that:
"(a) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of Paragraph 4."
8. We find that there is no ambiguity in the wordings of the Notification. Therefore, we do not find any reason for the appellants to entertain any doubts regarding the notification. The appellant's submission that they had a bona fide belief that goods attracted NIL rate of duty was same as non-excisable goods. We find no merit in the argument. As the notification is very clear there is no scope for entertaining any interpretation as held by the Hon'ble Apex Court in the case of M/s. Dilip Kumar & Company. This Bench has dealt with similar issue in the case of Grand Ashok (Supra) and held that:
"7.2. Regarding the method to arrive at the value of clearances in the previous year in terms of Notification No. 8/2003 (as amended), we find that the appellants contentions are misplaced. It appears that the appellants are attempting to create a confusion between 'nil' rate of duty and excisability of goods. We find that there is no ambiguity in the wordings of the Notification. We find that the ratio of judgment of this Bench in the case of Arun Industries: MANU/CB/0518/2005 : 2005 (191) ELT 1041 (Tri. Bang.) is squarely applicable. The department was correct in calculating the eligibility limit."
9. The learned Counsel for the appellants submits that they had a bona fide belief that the value of goods cleared at the NIL rate of duty and as the matter involves interpretation of statutory provisions extended period cannot be invoked. He relies upon this Bench decision in Grand Ashok (supra). We find that the case of the appellant and that of Grand Ashok stand on a different footing. As held by the Hon'ble Apex Court in the case of CCE Vs M/s. Alnoori Tobacco Products and Others in Civil Appeal Nos. 4502-4503 of 1998, Order dated 21.07.2004, two cases cannot be compared unless they stand similar in all respects and that even a small fact can alter the circumstances. The appellant is a regular manufacturer and has been availing the very same benefit for quite some time. In such circumstances, it is difficult to accept that the appellants had a bona fide belief. The appellants have not given any declaration to the effect that they manufacture excisable goods which are chargeable to NIL rate of duty and they consider the same to be non-excisable goods. The only declaration given by the appellants that to with effect from 01.03.2001 is to the effect that they are manufacturing bread, bun etc. falling under CETA 1985.90 and chargeable to NIL rate of duty. It is not understood as to how the Department would be in the knowledge that the appellants are manufacturing same goods in 2004 and would treat them as non-excisable goods. We find that no clarification whatsoever was obtained by the appellants from the Department. It is not the case of the appellants that their unit has been subjected to audit in between. Under the circumstances, we find that the Department had no way to be in the knowledge of the activities of the appellants. Therefore, it can only be concluded that the appellants have suppressed material facts from the Department. In such circumstances, we are of the considered opinion that extended period is rightly invokable.
10. In view of the above, we find that there is no merit in the appeal and thus we reject the appeal.
(Order pronounced in open court on 31/08/2021)
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