TMI Blog2009 (9) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice by invoking the extended period of limitation relating to earlier period thereto. The appellants are justified in contending that the respondents were not entitled to initiate proceedings on the basis of show cause notice dated 2nd March, 2001. As regards the issue relating to penalty, held that- as rightly pointed out by the appellants, the dispute related to the interpretation of statutory provisions and it did not disclose intension to evade the payment of duty and, therefore, there was no justification for imposition of penalty in the matter. Hence, the penalty imposed under the impugned order is liable to be set aside. Thus, duty demanded thereunder and also interest, are confirmed. All the appeals are disposed of in the above terms. - E/6180-6187/2004 - 739-746/2009-EX(PB), - Dated:- 22-9-2009 - Justice R.M.S. Khandeparkar, President and Shri M. Veeraiyan, Member (T) Shri P.K. Mittal, Advocate, for the Appellant. Shri P.K. Singh, DR, for the Respondent. [Order per: Justice R.M.S. Khandeparkar, President (Oral)]. - Since common questions of law and facts arises in all these appeals, they were heard together and are being disposed of by this comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,82,680.50 (+Int.) The appellants are 100% EOU, registered manufacturer under the provisions of Central Excise Rules, 1944, and have bonded warehousing licence under the provisions of the Customs Act, 1962 to manufacture under bond a product being Instant Tea Powder falling under Chapter Heading 2101.20 of the Central Excise Tariff Act, 1985. 4. As it was revealed to the Revenue Department that during the period from January, 1999 to June, 1999 the appellants had exported the said product to the tune of 3,31,200 kg. without payment of cess payable in terms of Section 3(n) of the Tea Act, 1953, a show cause notice dated 4-8-1999 came to be issued to the appellants requiring them to show cause as to why the cess amount, which they had failed to pay on clearance of the Instant Tea Powder of the stated quantity amounting to Rs.99,360/-, should not be demanded from them under Section 9 and Section 11-A of the Central Excise Act, 1944 read with the provisions of Tea Act, 1953. Similar show cause notices came to be issued relating to the remaining period from July, 1999 to July, 2003 in respect of which failure on the part of the appellants to pay cess was noticed. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent that the issue, as to whether the Instant Tea Powder is tea within the meaning of the said expression under the provisions of law comprised under Tea Act, 1953, stands concluded by the decision of the Apex Court in Tata Tea Ltd.'s case (supra) and the non-applicability of the provisions of Notification No. 125/84-C.E., dated 26th May, 1984 to claim exemption in relation to the cess amount also is settled by the law laid down in that regard by the Apex Court. It is further the case of the respondent that, there is no material placed on record, at any point of time, by the appellants about prior payment of cess in relation to the product in question or at any stage of its production. Being so, there is no case of any multi stage levy of cess. The provisions of Export Policy and the clarification in that regard have no application to the matter in issue. 7. The learned advocate for the appellants while placing reliance in the decision in the matter of Mathew M. Thomas Ors. v. Commissioner of Income Tax, 1999 (111) E.L.T. 4 (S.C.) = AIR (1999) SC 999, ECE Industries Ltd. v. CCE, New Delhi, 2004 (164) E.L.T. 236 (S.C.), Barnagore Jute Factory Co. v. Inspector of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 986 (25) E.L.T. 849 (S.C.), and the Larger Bench decision of the Tribunal in the case of Nellimarla Jute Mills v. Collector of Central Excise, Guntur, 1987 (31) E.L.T. 209 (T), submitted that, the Exemption Notification No. 125/84-C.E., dated 26th May, 1984 nowhere refers to the duty of cess and it is confined to the excise duty referred to therein and, therefore, by way of interpretation the Tribunal or the Courts are not empowered to include some other duties even though they may be in the nature of excise duties in the said Notification. He further submitted that, mere policy by itself cannot entitle the manufacturers to claim exemption. According to him, no fault can be found with the orders passed by the lower authorities. 9. The learned advocate for the appellants has also submitted that, the proceedings in relation to the show cause notice dated 2nd March, 2001 was clearly barred inasmuch as that the respondents were not entitled to invoke the extended period of limitation once they had already issued show cause notice on 4th August, 1999 for the same cause of action in relation to the period from January, 1999 to June, 1999. Law in that regard, being well settled by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent wrong in holding that 'instant tea' is different from 'tea' and it fell outside the scope of Section 3(n) of the Act referring to Prevention of Food Adulteration Rules, 1955 and the Tea Waste (Control) Order, 1959. When the Act defined 'tea' specifically, the Tribunal ought not to have strained itself by referring to other enactments to construe 'instant tea' as the product not included within the definition of 'tea' under the Act." 11. As far as Notification No. 125/84-C.E., dated 26-5-2004 is concerned, the same reads thus : "In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts all excisable goods produced or manufactured in a hundred per cent export oriented undertaking from the whole of the duty of excise leviable thereon under Section 3 of the Central Excises and Salt Act, 1944 (1 of 1944): Provided that the exemption contained in this notification shall not apply to such goods if allowed to be sold in India." 12. Apparently, the said Notification has been issued under Rule 8(1) of the Central Excise Rules, 1944 and relates to exemption of excise duty leviable under Section 3 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim the exemption from the payment of cess. 15. As far as Policy Item No. 9.29(A)(f) is concerned, it, undoubtedly, states that, "Procurement of raw materials, components and consumables and export of finished products shall be exempt from Central levies." Referring to the expression 'Central Levies', it was sought to be strenuously argued on behalf of the appellants that, it would disclose the intention of the Government to grant exemption in relation to the obligation to pay the cess by 100% EOU units and, therefore, the appellants were justified in claiming exemption from payment of cess. The contention is totally devoid of substance. Mere Policy document would not entitle the assessee to claim exemption from payment of duty or tax. To claim exemption, there has to be specific Notification in that regard issued by the competent authority. No such Notification has been disclosed at least for the period prior to 1st September, 2004. To what extent the appellants can claim benefit of Notification dated 1st September, 2004 issued by the Ministry of Commerce and Industry in relation to the liability to pay the cess in question is a totally different issue and does not arise for ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) read with the decision in Modi Rubber Ltd.'s case (supra). 21. The Larger Bench of the Tribunal in Nellimarla Jute Mills's case (supra), after considering the provisions of Central Excise Act, 1944 as well as Jute Manufacture Cess Act, 1983 and the decision of the Apex Court in Union of India Ors. v. Ahmedabad Mfg. Calico Printing Co. Ltd., 1985 (21) E.L.T. 633 (S.C.), held as under : "Now coming specifically to the provisions relating to exemption from cess, the authority or power of the Central Government to grant exemption to any jute manufacture from the cess leviable under the Cess Act would be Central Excise Rule 8 as made applicable by Section 3(4) of the Central Cess Act. A notification issued under Section 3(4) of the Cess Act read with Central Excise Rule 8(1) would achieve the object. The learned counsel's contention is that since Central Excise Notification No. 56/72 issued under Rule 8(1) exempts from payment of Central Excise duty jute manufactures used captively for the manufacture of other jute manufactures, a similar exemption from the Cess leviable under the Cess Act would be the result insofar as the present cases are concerned because of the operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued in relation to the period from July 1999 to November 1999. All these notices were issued on the same cause of action. In these circumstances, there is no scope to contend that the Department had no knowledge about alleged suppression of facts. 24. It is well settled that once the Department issues the show cause notice for a particular period, the Department normally thereafter on the same set of facts and grounds cannot issue second show cause notice by invoking the extended period of limitation relating to earlier period thereto. The appellants are justified in contending that the respondents were not entitled to initiate proceedings on the basis of show cause notice dated 2nd March, 2001. The said notice related to the demand of duty of Rs.3,94,475/-. The impugned order discloses that equal amount of penalty has also been imposed in respect thereto apart from demanding interest on the said amount. 25. As regards the dispute relating to March, 2001 and April, 2002 is concerned, we do find that the said notices were issued during the course of the proceeding which was indeed an on going process. Merely because the matter was pending for adjudication, it did not absolve t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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