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M/s. Ultra Fine Fillers (P) Ltd. And Mr. Dilip Galundia, Director Versus C.C.E., Jaipur

2016 (5) TMI 779 - CESTAT NEW DELHI

Demand of duty - Seizure of 143 M.T. of calcite powder - Classifiable under C.T.H. 3824.90 leviable Central Excise to duty at the rate of 16% ad-valorem - Held that:- it has evident that the Commissioner (Appeals) has noted that the appellant is not seriously disputing the fact that the manufacturing process of their product involved apart from crushing, grinding other process as well such as roasting. The appellant contended that it did not do any roasting at all. The Commissioner (A)’s observa .....

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willful misstatement/ suppression of fact has been upheld by the Commissioner (Appeals) essentially on the ground that the appellant did not take registration and clear the goods without payment of duty. In case of CCE vs. Chemphar Drugs Liniments [1989 (2) TMI 116 - SUPREME COURT OF INDIA], the Supreme Court held that something positive other than mere inaction or failure on the assessee's part or conscious withholding of information when assessee knew otherwise is required for invoking extende .....

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g to the period beyond the normal period of one year will also be hit by time bar. - Decided in favour of appellant - Excise Appeal No.E/2900/2005-EX [DB] & Excise Appeal No.E/2901/2005-EX [DB] - FINAL ORDER NO. 51325-51326/2016 - Dated:- 8-3-2016 - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. R.K. SINGH, MEMBER (TECHNICAL) For the Appellant : Shri. Mayank Garg, Advocate For the Respondent: Shri. Govind Dixit & Shri R.K. Grover, D.Rs. ORDER PER : R.K. SINGH Appeal is filed against order in ap .....

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ister of the assessee and removed on payment of appropriate Central Excise Duty. This option may be exercised within one month of the date of receipt of this order. (ii) I confirm the demand of duty of ₹ 20,63,149/- (Rs. Twenty lax Sixty Three Thousand One Hundred Forty Nine only) on the clearances of coated calcite powder effected by the assessee during May, 95 to July 99 under Section 11A (I) of Central Excise Act, 1944 and order to recover the same from the assessee. (iii) I impose pena .....

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cise Rules, 1944. (iv) I also order for charging interest under Section 11 AB on the amount of duty of ₹ 20,63,149/- (Rs. Twenty lac sixty three thousand one hundred forty nine only). (v) I impose a penalty of ₹ 1,00,000/- (Rs. One lac only) on Shri Dlip Galundia under Rule 209A of the erstwhile Central Excise Rules, 1944. The above order was issued pursuant to CESTAT Order dated 05.02.2004 which remanded the matter for deciding afresh after affording an opportunity of cross-examina .....

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ting Authorities held that the goods were classifiable under 3824 90 and that the appellant indulging in willful misstatement/ the suppression of facts did not pay duty thereon and accordingly confirmed the impugned demand alongwith interest and penalties as above. 4. The appellant has contended as under:- (i) It was manufacturing calcite power which was classifiable under CTH 25.05 liable to nil rate of duty. It added stearic acid only upto 1% not for the purpose of coating but for the ease of .....

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was not done in this case. (v) There is no evidence in the show cause notice as to how the allegation of suppression/willful misstatement is sustainable. 5. Ld. D.R. on the other hand stated that Shri Mahendra Barber supervisor of the appellant clearly admitted that 1% fatty acids i.e. stearic acid was added and the powder was further processed through heater mixture machine to remove any impurities and humidities. The ld. D.R. also reiterated the analysis of the reasoning contained in the prim .....

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1999. In its earlier report dated 31.08.1999 the Chemical Examiner essentially stated that the sample under reference is a mineral calcite converted into powder form by grinding only:- The earlier test report is reproduced below:- Report The sample is in the form of dull white fine powder. It is essentially composed of calcium carbonate together with small amount of silicious matter. It has the characteristics of mineral calcite. (S.K. Mittal) Chemical Examiner Dt. 31/08/99 No. 136/CHEM/MISC./J/ .....

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e sample under reference is a mineral calcite converted into powder form by grinding only. (S.K. Mittal) Chemical Examiner It is seen that subsequently, the chemical examiner gave further report on 05.05.2000 in respect of 3 varieties of impugned goods, wherein he opined that calcite powder jet filler and cyclone filler was classifiable under Chapter 25 but calcite powder jet & cyclone filler was classifiable under 3824.90. These 3 sample reports are reproduced below:- 136-CHUM/Misc./J/94/CL .....

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mple returned herewith. FORWARED to:- THE INSPECTOR/SUPRINTENDENT CENTRAL EXCISE DIVISION CHEMICAL EXAMINER 5.5.2000 142, B HIRAN MAGRI, SECTOR -11 UDAIPUR - 313002 RAJASTHAN Copy may be forwarded to the concern ASSTT. Commissioner, Central Excise Division 136-CHUM/Misc./J/94/CLJ/Misc./147-A/9-2-2000/5-5-2K Report The sample is in the form of white powder. It is essentially composed of Calcium Carbonate together with small amount of siliceous matter (Silicates of Magnesium and Aluminum). Content .....

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r, Central Excise Division 136-CHUM/Misc./J/94/CLJ/Misc./147-B/9-2-2000/5-5-2K Report The sample is in the form of white powder. It is essentially composed of Calcium Carbonate together with small amount of siliceous matter (Silicates of Magnesium and Aluminum). It is coated with fatty matter. Content of Calcium Carbonate = 97.9 % by weight Content of fatty matter = 0.4 % by weight; the rest being siliceous matter The test findings indicate the sample under reference to be coated calcite powder. .....

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l Excise Division 8. From the above chemical Examiner s reports, it is obvious that even in the second chemical examination reports in respect of 2 verities of calcite powder, the chemical examiner held them classifiable under Chapter 25. It is also only in respect of calcite Powder jet and cyclone filler that the chemical examiner held it to be classifiable under 3824.90. In this regard it is to state that the manufacturing process of all these 3 types of calcite Powders was essentially the s .....

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of Indian Standards). From the above Chemical reports it is evident that the chemical examiner has not been very consistent with regard to the classification of the impugned goods. The description of C.T.H. 25.05 is reproduced below:- Heading No. Sub-headding No. Description of goods Rate of duty 25.05 2505.00 Mineral substances not elsewhere specified (including clay, earth colours, natural abrasives, sulphurs, slate and stone), lime; plasters with a basis of clcium sulphate, whether or not co .....

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sifted, screened, or concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystalisation), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading or sub-heading. It is evident from Chapter Note 2 that powdered mineral substance are covered under this chapter. 9. We find that Revenue had relied upon HSN Note pertaining to Chapter Heading 38 24 which is reproduced below:- Thi .....

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is as follows:- 8. It is evident from Chapter Note 2 to Chapter 25 of the Tariff that only those products are covered which have been washed ( even with chemical substances, eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, or concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallization), but not product that have been roasted, calcined, obtained by mixing or subj .....

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tty matter and is hydrophobic in character clinches the issue in favour of the Department. There can be no grounds for interfering with the adjudicating authoritys findings that the goods are classifiable under sub-heading 3824.90 of the Tariff and not under Chapter 25. 9. Coming to the question of penalties, I find that the appellants have manufactured and cleared excisable goods without being registered with the Central Excise Department, without declaring the same to the Department and witho .....

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uch as roasting. The appellant contended that it did not do any roasting at all. The Commissioner (A) s observation does not dispute that the appellant disputed the same though Commissioner (A) did not regard it to have been seriously disputed. So long as the roasting was disputed, the Commissioner (A) was not justified in assuming that there was roasting without corroborative evidence which doesn t exist. Resultantly the impugned order becomes devoid of the adequate basis to sustain the classif .....

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