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2016 (3) TMI 301 - CESTAT AHMEDABAD

2016 (3) TMI 301 - CESTAT AHMEDABAD - 2016 (335) E.L.T. 66 (Tri. - Ahmd.) - Due Drop Process on Fabrics - Manufacture - duty demand - whether Due Drop Process on Fabrics will amount to manufacture and whether the Appellant's belief that it did not amount to manufacture is “bonafide belief” - Held that:- Dew Drop Process was brought into the country in August 2000 from Korea. As gone through the write-up on the process of Dew Drop as well as the Certificate submitted by the Appellant in Appeal Me .....

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uring the relevant period the process did not amount to manufacture and that they are not liable to Central Excise duty. It is also observed that the Department noticed the alleged duty evasion in January 2001, yet they issued the Show Cause Notice only on 01.04.2005, after almost 4= years. It is also noticed that the South Gujarat Due Drop Processors Association had also taken up the matter with the Ministry of Finance and Ministry of Textiles that the process of Dew Drop does not amount to man .....

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AND MR. P.M. SALEEM, MEMBER (TECHNICAL) For the Petitioner : Shri P.M. Dave, Shri Aditya Tripathi - Advocates For the Respondent : Shri Jintendra Nair, A.R. ORDER PER: P.M. SALEEM The Appellant herein M/s Shivam Textiles, is aggrieved by the impugned Order-in-Appeal of the Commissioner (Appeals). The issue involved in this appeal is whether the Due Drop Process on Fabrics will amount to manufacture and whether the Appellants belief that it did not amount to manufacture is bonafide belief . 2 .....

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The fabric is then passed through a machine where metal foil gets stamped on the adhesive already applied. The resultant fabric emerge as fancy printed fabrics with design as if shining dew has got deposited. 2.3 Central Excise Officers conducted checks at the manufacturing premises of the Appellant firm on 06.01.2001 and seized certain raw materials on finding that the Appellants were engaged in the manufacture and clearance of drew drop fabrics without a Central Excise Registration and without .....

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rop fabrics cleared to 18 merchants. Out of 18 merchants, statements of 14 merchants were also recorded in February-May 2001, wherein the 14 merchants admitted that they sent dyed fabrics and received drew drop fabrics back without any Excise Invoice. Statements of 4 merchants could not be recorded in absence of full address. 2.5 A Show Cause Notice dt.01.04.2005 was issued proposing interalia recovery of duty @ 16% on the Drew Drop fabrics cleared during August 2000-December 2000. The notice pr .....

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on, without maintenance of records and cleared without payment of duty with intent to evade. Mandatory penalty is imposed for the same reason. Personal penalty of ₹ 1,00,000/- is imposed on the partner. Personal penalty of ₹ 5000/- is imposed on each of the 18 merchants. 3. On appeal filed by the Appellants, the Commissioner (Appeals), vide impugned Order-in-Appeal, upheld the Order-in-Original except for dropping of personal penalty on Shri Babubhai Raghavbhai Patel, Partner of the .....

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iable. Revenue, on a survey cum preventive visit to such units in January 2001, held that the said process of Dew Drop amounts to manufacture. The entrepreneurs and their association, aggrieved by the stand of the Revenue, took up the matter with the Ministry of Finance and Ministry of Textiles. As a result of such representations, a Notification No.30/2001-CE, dt.29.05.2001 was issued exempting the said process from the Central Excise duty. However, there was no retrospective exemption from the .....

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ocess of Dew Drops does not amount to manufacture within the definition of Section 2(f) of Central Excise Act, 1944. The learned Counsel also relied upon the decision of Hon'ble Supreme Court in the case of Padmini Products Vs CCE 1989 (43) ELT 195 (SC), wherein the Hon'ble Apex Court has held that the extended period of limitation under Section 11A cannot be invoked when the Appellants have a bonafide belief that they are not liable to Central Excise duty. He also drew the attention .....

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at any other process should fall under the same genus to attract the principle of Ejusdem Generis. The learned Counsel submits that the Dew Drop process does not fall under the said categories of processes, and this is only a temporary process which would be washed away in simple 3-4 washes. 5. On the other hand, the learned Authorised Representative for the Revenue submits that the duty evasion was detected by the Officers only. He strongly objected to the principle of bonafide belief . He .....

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11A and issue the Show Cause Notice within the permitted time limit of five years from the date of clearance of the goods. 6. The learned Authorised Representative for the Revenue relied upon the following decisions:- i) Pasupati Spinning & Weaving Mills Ltd Vs CCE Chandigarh-2015 (318) ELT 623 (SC) ii) V.N.K. Menon & Co. Vs CESTAT Chennai-2015 (323) ELT 524 (Mad.) iii) Salasar Dyeing & Printing Mills (P) Ltd Vs CCE Surat-I-2013 (290) ELT 322 (Guj.) iv) CCE Surat-I Vs Neminath Fabric .....

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