TMI Blog2010 (11) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 5/07-C.E. dated 31-1-07 E/37/08 1-4-05 to 31-3-06 13-9-06 3/07 dated 29-1-07 25/07-C.E. dated 26-10-07 E/816/08 1-4-06 to 31-3-07 5-12-07 10/08 LTU dated 6-2-08 24/08 dated 7-8-08 Department s Appeal E/394/08 1-4-05 to 31-3-06 13-9-06 3/07 dated 29-1-07 25/07-C.E. dated 26-10-07 2. The appellant is a manufacturer of various excisable goods like soaps and detergents as well as agarbathi perfumes of various brands (hereinafter referred to as goods ). The said odoriferous compounds falling under Chapter heading 3302.90 are excisable and are in liquid form, packed in drums/cans and stock transferred to their own unit at Mysore which in turn uses the same for manufacturing of agarbathis. The appellant assessee herein was paying duty on the said perfumes up to April, 2000, and thereafter stopped payment of duty, on the ground that clarification given by the Board Circular No. 495/61/99-CX., dated 22-11-1999 will be applicable in their case and it was accepted by the department at that point of time. Later on investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisable as per the Board Circular dated 22-11-1999. He would draw our attention to the said Board Circular. It is his submission that the burden to prove marketability is always on the department and the perfumery compound manufactured by the appellant is as such not marketable. It is his submission that the appellants manufactured various brands of agarbathi compounds and they are being stock transferred to their Mysore Unit for use in particular brands of agarbathis. It is his submission that the revenue has relied upon an isolated sale of one brand of agarbathi perfumery compounds i.e., Venkateswara brand of agarbathi perfumery compound sold by the Appellant s Mysore unit. It is his submission that as business strategy the production of that particular brand of agrabathis was stopped. Hence, the appellant sold small quantity of the said perfumery compound to one of the purchasers i.e. Tibetan Handicraft Centre. He would submit that the revenue has not adduced any evidence regarding the marketability of various other compounds which are manufactured and cleared by them to their Mysore Unit for manufacturing of agarbathis. It is his submission that series of judgments would clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court in the case of Hindustan Ferodo Ltd. v. CCE, Bombay [1997 (89) E.L.T. 16 (S.C.)] is on the point and covers the issue in this case in favour of the assessee. It is his submission that the demand is also barred by limitation as revenue authorities were aware of the clearance of the perfumery compound to their Mysore Unit without payment of duty. It is his further submission that imposition of penalties on the appellant is not sustainable as the issue was of classification which was in dispute and Board Circular was clearly applicable. As regards the departmental appeal, it is his submission that the Commissioner (Appeals) has correctly rendered a finding that the appellant has not suppressed any facts by relying on the evidences available on record. 4. Learned SDR on the other hand would submit that the impugned orders are correct. It is her submission that the evidences in the form of invoices issued by the appellants Mysore factory to Tibetan Handicrafts centre on payment of duty of Venkateshwara brand perfumery compounds in itself is an indicator that the said perfumery compounds are marketable and are in fact marketed. It is her submission that the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... length by both sides and perused the records. The issue involved in this case is regarding excisability of the products manufactured by the appellant i.e. odoriferous compounds commonly known in the market as agarbathi perfumery compounds. 6. The undisputed facts are that the appellants are manufacturing agarbathi perfumery compounds and stock transferring the same to their own Mysore Unit for consumption of the said agarbathi perfumery compounds in manufacturing of agarbathis. The said agarbathis manufactured by the appellant s own Mysore unit are exmpted from payment of duty as product of handicrafts. It is also undisputed that prior to year 2000, appellants were discharging duty liability on the said agarbathi perfumery compounds cleared and stock transferred from their Bangalore unit to their Mysore unit. Consequent to the issuance of Board circular dated 22-11-1999 they stopped discharging duty liability and cleared the agarbathi perfumery compound to their Mysore Unit on delivery challans. This factual position is not controverted by the department. The revenue s case as regards the demand of duty is built upon two evidences which have been relied upon by the learned Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a proof of marketability of various other brands of agarbathi perfumery compounds, manufactured and cleared by the appellants Bangalore Unit to their Mysore unit. In the absence of any evidence to indicate that other brands of agarbathi perfumery compounds are marketable or capable of being sold, we are of the view that the evidence which has been laid by the revenue in the form of invoices issued in faovur of Tibetan Handicrafts Centre, can at the most be evidence of marketability of that agarbathi perfumery compound i.e. Ventakeshwara brand . 9. Be that as it may, we find that the issue of marketability/excisability of odoriferous compounds and agarbathi mix arising during the course of manufacture of agarbathis was in dispute and the CBEC vide circular 495/61/99-CX-3 dated 22-11-1999 issued clarification, relevant paragraphs are reproduced : 3. Moreover, each brand of Agarbathi has a different fragrance which is on account of the different formulations used by the manufacturers which is specific to that particular brand. Preparation of such odoriferous compounds, substances applied on the Agarbathi varies from one Agarbathi manufacturer to another. Such preparations are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed away by the departmental officers, more so when the law is settled by judgment of the Hon ble Supreme Court in the case of CCE, Vadodara v. Dhiren Chemicals [2002 (139) E.L.T. 3 (S.C.)J. We also find that learned Commissioner (Appeals) has tried to differentiate the Board Circular by stating that the mere fact that the formula is a trade secret of the manufacturer does not take away the excisability of the product and give immunity from durability these findings are totally in variance to the Circular dated 22-11-1999 issued by the Board. Suffice to say that revenue officers are bound by circulars, we hold that these findings of the first appellate authority are not in consonance with the settled law. 10. In our considered view, the Board Circular will apply in its full force to the case in hand before us at least to the agarbathi perfumery compounds wherein revenue has not produced any evidence of they being bought and sold. In the case in hand before us there is a definite evidence to indicate that the appellant s Mysore unit had sold Venkateshwara brand agarbathi perfumery compound and hence the duty liability on such quantity of Venkateshwara brand agarbathi perfumer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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