Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2020 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 255 - AT - Central ExciseBenefit of exemption - intermediate product - Agarbathi Masala - final product exempt from duty - N/N. 67/95 dated 16.03.1995 (as amended) - Department after going through the entire process of obtaining agarbathis found that agarbathis masala manufactured by the appellant and captively consumed by them in the manufacture of agarbathis, was excisable as odoriferous compound and classifiable under Tariff Item No. 33029090 of the Central Excise Tariff - whether this intermediate product will enjoy benefit of exemption or not? HELD THAT:- The appellants are the manufacturers of Agarbathi by the process of mixing of odoriferous compound of various fragrances as per this proprietary formula and sprinkling the same on raw Agarbathis. Agarbathis classifiable under Tariff Item No. 33074900 of CETA and is chargeable to ‘NIL’ duty. Agarbathi Masala is mixed and captively consumed by the appellant for applying on to Agarbathi and is prepared based on proprietary formula which is a trade secret - Further, the appellant does not market the Agarbathi Masala. Further, we find that in the CBEC Circular No. 495/61/99-CX-3 dated 22.11.99 which holds that “odoriferous compound used for manufacture of Agarbathi is not excisable”. Further, the said Circular referred to two processes of manufacture of Agarbathi (a) by mixing the Agarbathi Masala with dough and rolling it into Agarbathi, (b) by sprinkling on raw Agarbathi. In the present case, the Respondent has held that the Circular is inapplicable to the appellant’s case as the Agarbathi Masala mixed by the appellant is marketable and hence excisable. Further, by this subsequent Circular No. 989/13/2014-CX.3, dated 7.11.2014, the Board clarified the marketability, if any, has to be determined based on evidence. In the impugned order, the Original Authority has held that the appellant is entitled to CENVAT credit of duty paid on the inputs used in the preparation of Agarbathi Masala but the said CENVAT credit has not been calculated and the benefit of the same has not been given while confirming the duty demand on the appellant. Further, the method of determination of value of Agarbathi Masala by the Department has not excluded the duty paid on the inputs used for the preparation of Agarbathi Masala which is contrary to CAS-4 standard. The cases needs to be remanded back to the Original Authority to decide de novo after affording an opportunity of cross-examination of the witnesses relied upon by the Respondent - appeal allowed by way of remand.
|