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2015 (4) TMI 893 - CESTAT NEW DELHI

2015 (4) TMI 893 - CESTAT NEW DELHI - 2015 (328) E.L.T. 634 (Tri. - Del.) - Classification of goods - Marketability of product - Whether sugar syrup made by the appellant for captive use in the manufacture of exempted biscuits is chargeable to Central Excise duty under sub-heading 17029090 of the Central Excise Tariff - Held that:- Since the sugar syrup is used in the manufacture of the exempted biscuits, the benefit of Notification No. 67/95-CE would not be available. In this regard, the conten .....

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. The proviso to notification is applicable only in a situation where by using common Cenvat credit availed inputs, a manufacturer manufactures dutiable as well as exempted final product and in respect of the exempted final product, the obligation under Rule 6 of the Cenvat Credit Rules has been discharged.

For classification as sugar syrup blend in this sub-heading the product must contain 50% by weight of fructose sugar in dry state

There is no evidence to show that befo .....

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rup blends of sub-heading 170290 for which the sugar syrup in dry stage must contain 50% by weight of fructose.

Marketability of the goods produced by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that .....

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dence to prove that the goods, in question, are classifiable under 17029090 nor there is any evidence to prove that the goods, in question, in form in which they come into existence in the appellant s factories, are marketable. We, therefore, hold that the impugned order is not sustainable. The same is set aside. - Decided in favour of assesees. - Excise Appeal Nos. 3725-3730 of 2012 - Final Order No. 50759-50764/2015 - Dated:- 3-3-2015 - Hon ble Shri Rakesh Kumar, Member (Technical) And Hon ble .....

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akash Chand Talreja is the Director of M/s Rishi Bakers Pvt. Ltd., Shri Rajiv Talreja is the Director of M/s Ramakrishna Bakers Pvt. Ltd. and Shri Om Prakash Shyamdasani is the partner of M/s Swati Biscuit Manufacturing Co. The period of dispute in the appeal of M/s Rishi Bakers Pvt. Ltd. is from January 2009 to June 2009. The period of dispute in the case of appeal filed by M/s Ramakrishna Bakers Pvt. Ltd. is February 2010 to June 2010 and period of dispute in the case of M/s Swati Biscuit Manu .....

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y of citric acid. This sugar syrup was being used in the manufacture of the biscuits. The Department was of the view that since biscuits of retail sale price equivalent not exceeding ₹ 100/- per kg. were fully exempt from duty, the benefit under exemption Notification No. 67/05-CE would not be admissible in respect of sugar syrup. The Department was also of the view that this sugar syrup is classifiable under sub-heading 17029090 and is also marketable. It is on this basis that show cause .....

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nst the Assistant Commissioner s order, the Commissioner (Appeals) by common order-in-appeal dated 25/3/10 and 26/3/10 dismissed the appeals. In the appeals filed before the Commissioner (Appeals), one of the pleas of the appellants was that the sugar syrup is not classifiable under heading 17029090 as, as per the test report of Shri Ram Institute of Industrial Research, the Fructose content of the syrup is less than 50% while for classification under sub-heading 17029090 the fructose content mu .....

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ound of adjudication, when the marketability of the sugar syrup had been presumed on the basis of the marketability of the biscuits. 1.2 In denovo adjudication proceedings, the original Adjudicating Authority again confirmed the duty demands holding that the sugar syrup, in question, is marketable and also held that the goods, in question, are classifiable under sub-heading 17029090. 1.3 On appeals have filed to Commissioner (Appeals) against these orders, the Commissioner (Appeals) by a common .....

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s pre-deposit being made, the requirement of pre-deposit of balance amount of duty demand confirmed, interest and penalty by the appellant companies and the requirement of pre-deposit of penalty by the Directors/Partner of the appellant company/firm would stand waived and its recovery stayed during the pendency of the appeals. The appellant, thereafter, complied with this stay order. 1.4 Subsequently, the Tribunal vide stay order dated 4th February 2014 extended the stay order against which the .....

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Appeals) has wrongly given a finding that the appellant have not disputed that the product, in question, is invert sugar syrup and is classifiable under heading 17029090, that not only in the appeals before the Tribunal, but also in the appeals filed before the Commissioner (Appeals), the question of classification of the goods, in question, under the sub-heading 17029090 has been disputed by pleading that the fructose content of the sugar syrup is less than 50% and in this regard reliance has b .....

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upon the sale of invert sugar syrup by Dhampur Speciality Sugars Ltd. to M/s Britannia Industries, M/s J.B. Mangaram Food Industries and M/s ITC Ltd. which is wrong, as the Tribunal in the remand order had directed original Adjudicating Authority to ascertain the marketability of the sugar syrup being prepared by the appellant and the marketability of the sugar syrup, in question, cannot be presumed on the basis of marketability of the invert sugar syrup being manufactured and sold by others, th .....

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the Cenvat Credit Rules, 2001 has been discharged, that in this case the appellants have not taken Cenvat credit in respect of the inputs used in the manufacture of exempted biscuits and hence in respect of the sugar syrup, the exemption under this notification would be available and that in view of the above submissions, the impugned orders are not sustainable. Shri Patil also pleaded that since the dispute in this case pertains to interpretation, the penalty on the appellant company as well as .....

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ds were being sold by M/s Dhampur Speciality Sugars Ltd. to M/s Britannia Industries, M/s J.B. Mangaram Food Industries and M/s ITC Ltd., the goods, in question, have to be treated as marketable. Shri Grover cited the judgments of Nicholas Piramal India Ltd. vs. CCE, Mumbai reported in 2010 (260) E.L.T. 338 (S.C.), wherein it was held that shelf-life of product is not a relevant factor to test marketability unless it is shown that product has absolutely no shelf-life or shelf-life is such that i .....

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aceuticals Ltd. vs. CCE & CUS, Daman reported in 2011 (263) E.L.T. 641 (S.C.). He therefore pleaded that the sale of invert sugar syrup by Dhampur Speciality Sugars Ltd. to M/s Britannia Industries, M/s J.B. Mangaram Food Industries and M/s ITC Ltd. shows that this sugar syrup, in question, is marketable. 5. In rejoinder Shri M.H. Patil cited the judgment of the Apex court in the case of Bata India Ltd. vs. CCE, New Delhi reported in 2010 (252) E.L.T. 492 (S.C.) and pointed out to para 18 of .....

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appellant is marketable. 6. We have considered the submissions from both the sides and perused the records. 7. The dispute in the present case is as to whether sugar syrup made by the appellant for captive use in the manufacture of exempted biscuits is chargeable to Central Excise duty under sub-heading 17029090 of the Central Excise Tariff. The Department s contention is that since the sugar syrup is used in the manufacture of the exempted biscuits, the benefit of Notification No. 67/95-CE woul .....

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rer has manufactured, in addition to exempted final product, a dutiable final product also by using common Cenvat credit availed inputs and in respect of exempted final product, he has discharged the obligation prescribed under Rule 6 of the Cenvat Credit Rules. In this case, it is now known as to whether the appellant throughout during the period of dispute, were manufacturing only exempted final product or alongwith the exempted final product were also manufacturing dutiable final product. The .....

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nt. In our view ratio of this judgment is not applicable to the facts of this case. 8. Next comes the question of classification. The Department has classified the product, in question, under sub-heading 17029090. Sub-heading 17029090 comes under the 6 digit sub-heading 170290 which covers other sugars including invert sugar and sugar syrup blends containing in the dry stage 50% by weight of fructose . The goods, in question, are sought to be classified under 17029090 as sugar syrup blends conta .....

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this, there is no evidence to show that before seeking classification of the goods, in question, under sub-heading 17029090, the samples drawn from the goods had been got tested by the CRCL to confirm as to whether the fructose content of the goods, in question, in dry stage is 50% by weight. Just because the appellant during period till June 2008 were paying duty on the goods by classifying the same under sub-heading 17029090, it cannot be presumed that they had accepted that the goods, in que .....

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hemical P. Ltd. vs. CCE reported in 2012 (277) E.L.T. 145 (S.C.). In view of this, we hold that the classification of the goods under sub-heading 17029090 is not sustainable, as absolutely no evidence has been produced by the Department to show that the fructose content of the goods, in question, in dry state was 50%. 9. Even if it is assumed that the goods, in question, are covered by sub-heading 17029090, for attracting Central Excise duty the goods must be proved to be marketable. The Tribuna .....

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ed by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that the invert sugar syrup being manufactured by M/s Dhampur Speciality Sugars Ltd. is being sold to M/s Britannia Industries, M/s J.B. Mangaram Food Industries .....

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