9911796707
TMI Blog2010 (11) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 investigations conducted by the department indicated that the products, odoriferous compounds, are marketable products and as such same are classifiable and the Board's clarification was inapplicable to appellants goods. Coming to such a conclusion, show cause notices were issued for the periods 1-4-2004 to 31-3-2005, 1-4-2005 to 31-3-2006 & 1-4-2006 to 31-3-2007 for the demand of duty on the goods stock transferred to their Mysore Unit along with interest and for imposition of penalty. The adjudicating authority in various orders-in-original confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 clearly cover the issue in their favour as regards marketability of the product. It is his further submission that the perfumery compounds manufactured by the appellant is as such not marketable. He would submit that the Venkateshwara brand of perfumery compound which was considered as sold by the revenue authorities was in fact never sold from their factory premises. He would submit that the stock of Venkateshwara brand agarbathi compound was stock transferred somewhere in the year 2000 while the sale took place in the year 2004. It is his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 question of marketability means the product should be capable of being bought and sold and there need not be any specific sale of the goods. For this proposition, she relied upon the following judgments : (1) Camlin Ltd. [2005 (180) E.L.T. 307 (S.C.)] (2) M/s. Ambalal Sarabhai Enterprises [1989 (43) E.L.T. 214 (S.C.)] (3) Indian Cable Co. Ltd. [1994 (74) E.L.T. 22 (S.C.)] (4) Bhor Industries Ltd. [1989 (40) E.L.T. 280 (S.C.)] (5) &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Commissioner (Appeals) which are as under : (1) Invoice No 9/115.05.04 (2) Invoice No 33/10.8.2004 issued by the appellant's Mysore Unit in favour of Tibetan Handicrafts Centre for sale of "Venkateshwara brand" perfumery compound on paymet of appropriate central excise duty and the representation received from the Karnataka Perfumery and Flavours Manufacturers association and the monthly returns fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not sold by them in the market so as to keep their respective trade secrets. As the constituents, their proportions and formula of preparation are kept as secret, such compounds cannot be considered to be marketable in the commercial parlance. 4. Accordingly, it is clarified that the odoriferous compound or Agarbathi dough mixed with odoriferous substances, not being capable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke 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 perfumery compound stock transferred from Bangalore unit to Mysore unit will have to be discharged by the appellant. The appellant is also required to pay the interest on such amount of duty liability and is also liable to be visited with equivalent amount of penalty on the amount of duty that he is liable to pay on the Venkateshwara brand agarbathi perfumery compounds stock transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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