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2016 (8) TMI 841 - CESTAT KOLKATA

2016 (8) TMI 841 - CESTAT KOLKATA - TMI - Notification No.32/99-CE dated 08.07.1999 - eligibility for benefit - carrying out more than 25% expansion in the installed capacity of plywood production as prescribed in the exemption notification - no increase in the installed & licenced capacity in the old wood based industries of Nagaland after 30.10.2002 - Held that:- in view of the clarification dated 15.10.2009 discussed by the Adjudicating authority it cannot be said that no expansion in the ins .....

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llant should in one go install all machinery required to cater to the licensed capacity sanctioned. - Notification No.32/99-CE dated 08.07.1999 - eligibility for benefit - Chartered Engineer vide his report dated 17.05.2005 has not taken veneer production into consideration while arriving at more than 25% expansion in installed capacity - Held that:- Adjudicating Authority further justified the expansion by not only based on a Chartered Engineer s Certificate dated 17.05.2005, but also relie .....

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ned by the department it cannot be appreciated that quantity of veneer production should also be taken into consideration while determining the expansion undertaken. CBEC also while issuing a clarification under F.No.354/08/98-TRU dated 09.07.1999 opined that in case of doubt the Central Excise Officers may consult department of Industries of State Govt. for the purpose of 25% expansion in installed capacity, etc. - Notification No.32/99-CE dated 08.07.1999 - eligibility for benefit - Adjudi .....

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nd a separate expert contrary opinion could have been raised by the department to review the order dated 07.06.2005 passed by the jurisdictional DC, CEx, Jorhat allowing the benefit of Notification No.32/99-CE dated 08.07.1999. In the absence of Review of order dated 07.06.2005 the same has become final on admissibility of this exemption to the Respondent. - Decided against the Revenue - Appeal No. E-857/11, Cross Objection No.CO-14/12 - ORDER No. FO/A/75824/2016 - Dated:- 12-8-2016 - Shri H. K. .....

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ity. Under this Order-in-Original dated 31.05.2011 Adjudicating authority has held appellant to be eligible to the benefit of Notification No.32/99-CE dated 08.07.1999 due carrying out more than 25% expansion in the installed capacity of plywood production as prescribed in the exemption notification. 2. Shri K.Chowdhury, Supdt.(AR) and Shri A.K.Biswas, Supdt.(AR) appeared for Revenue and submitted that early hearing application of the Revenue in this appeal was allowed by this Bench by an order .....

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ed industries. That inspite of the strict instructions and limited utilization of timber by Apex Court the Respondent sought 25% expansion under Notification No.32/99-CE dated 08.07.1999. That Revenue has filed this appeal to determine whether Respondent has carried out substantial expansion in the installed capacity for becoming eligible to expansion under area based exemption Notification No.32/99-CE dated 08.07.1999. It is the case of the Revenue that as per the correspondence exchanged betwe .....

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n, from 4341 CUM to 6312 CUM. That there is no increase in the installed capacity of Veneer manufacturing. That if the Veneer production and plywood production is together taken into consideration then expansion is only 16.910% which is less than the expansion norms prescribed under Notification No.32/99-CE. That Adjudicating authority has not enquired from the State electricity department whether efficiency of transformer was 100% while handling power load of 1250 KV. That the original ground p .....

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can be directly issued for erroneous refund sanctioned. 3. Shri Ravi Raghvan (Advocate), Shri R.K.Hasija (Advocate) and Ms.Satabdi Chatterjee (Advocate) appeared on behalf of the Respondent. Shri R.Raghavan argued as follows:- (i) That DC, Central Excise vide order dated 07.06.2005, after personal visit and verifications, came to the findings that Respondent has carried out more than 25% expansion during 01.05.2005 to 15.05.2005 and allowed the benefit under Notification No.32/99-CE dated 08.07 .....

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7(Tri.-Kol)] (b) CCE, Shillong vs. Binnakandy Tea Estate [2009(235)ELT 686(Tri.-Kol)] (c) Farm Fresh Foods Pvt.Ltd.v.CCE, Chandigarh [2009(241)ELT 74(Tri.Del.)] (iii) That as per clarification dated 07.10.2005, issued by CC, Meerut with respect to similar area based exemption 49/2003-CE & 50/2003-CE both dated 10.06.2003, expansion at each and every section of the manufacturing unit is not required. Learned Advocate also made the Bench go through para 4 of CBEC clarification F.No.354/08/98-T .....

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cating authority as per third para on internal page 34 of the Order-in-Original dated 31.05.2011. That expert opinions cannot be brushed aside by the Adjudicating authority as held in para 9 of case law Farm Fresh Foods Pvt.Ltd. vs. CCE, Chandigarh (supra). (v) That entire veneer manufactured are used captively in the manufacture of plywood during the period of demand. That certain categories of veneers not manufactured by the Respondent are procured from outside. That there is difference in the .....

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misstatement on the part of the Respondent to evade any duty. That on limitations also demand is time barred as extended period is not invokable. Learned Advocate made the Bench go through para H.1 to H.7 of the Order-in-Original dated 31.05.2011 regarding submissions on time based nature of demand. 4. Heard both sides and perused the case records. The issue involved in the present appeal is whether Adjudicating Authority has correctly decided the issue of eligibility of exemption Notification N .....

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That jurisdictional DFO has assessed such installed and licenced capacity of the Respondent to be 6625 CUM for green veneer and 26000 CUM for plywood. That Principal Chief Conservator of Forest (PCCF) vide letter dated 06.09.2008 has confirmed that no new wood based industry was installed in the state of Nagaland and that there is no increase in the installed and licensed capacity of the old units after 30.10.2002. (ii) That Chartered Engineer vide his report dated 17.05.2005 has not taken vene .....

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35 of the Order-in-Original dated 31.05.2011 that PCCF vide a letter dated 15.10.2009 has clarified that licensed capacity of the appellant for veneer production is 6625 CUM and plywood production is 26000 cum and that no permission from the forest department is required for enhancement of installed capacity if the enhancement is within the licensed capacity. In view of the clarification dated 15.10.2009 discussed by the Adjudicating authority it cannot be said that no expansion in the installed .....

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ication No.32/99-CE dated 08.07.1999 that licensed capacity fixed by State forest department has to be taken into consideration while allowing expansion and that appellant should in one go install all machinery required to cater to the licensed capacity sanctioned. 7. On the argument raised at para-5(ii) above Adjudicating Authority further justified the expansion by not only based on a Chartered Engineer s Certificate dated 17.05.2005, but also relied upon a report of National Institute of Tech .....

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d that quantity of veneer production should also be taken into consideration while determining the expansion undertaken. CBEC also while issuing a clarification under F.No.354/08/98-TRU dated 09.07.1999 opined that in case of doubt the Central Excise Officers may consult department of Industries of State Govt. for the purpose of 25% expansion in installed capacity, etc. It is also observed from clarification dated 07.10.2005 issued by CC, Meerut, with respect to similar area based exemption No.4 .....

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SIA) Pvt.Ltd. [2003 (158) ELT 616 (T)] (iv) CCE, Shillong vs. Doarnia Tea Estate [2003 (158) ELT 999(T)] (v) CCE, Shillong vs. Hindustan Coca Beverages [2004 (159) ELT 162 (T)] In the case of Steel Authority of India vs. CC, Bombay[2000 (115) ELT 42(SC)] it has been held by Apex Court that departmental authorities cannot take one view in one state and a different view in another state. 7.1 Similar view has been taken in the following case laws that in all cases additional machinery need not be a .....

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497(Tri.-Kol)] (vi) CCE, Shillong vs. Binnakandy Tea Estate [2009(235)ELT 686(Tri.-Kol)] (vii) Farm Fresh Foods Pvt.Ltd.v.CCE, Chandigarh [2009(241)ELT 74(Tri.Del.)] 7.2 In the case of Farm Fresh Foods Pvt.Ltd. vs. CCE, Chandigarh(supra), relied upon by Respondent, CESTAT Delhi held that a Chartered Engineer Certificate cannot be brushed aside in a casual manner in the absence of any contrary opinion brought on record by the Revenue. It is also observed that the ratio laid by this Bench in the .....

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nstalled capacity of the fermenting section, which was the lowest amongst all departments. There was no evidence produced on record by the Department that the respondents produced more than the installed capacity of the fermenting section before the claimed date of expansion. As such, it is not possible to accept the arguments of the learned S.D.R. On the other hand, the Chartered Engineer s Certificate produced by the respondents is detailed and acceptable and the same also has not been challen .....

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rom 27.05.2005 to 28.05.2005. He saw the process of manufacture and also refers to Chartered Engineer s report. A copy of this order was sent to the jurisdictional Commissioner but there is no evidence on record that the said order was reviewed by the department. Once an issue is decided by an order and not reviewed by the appropriate authority then the same becomes final and a second proceeding cannot be initiated on the same cause of action in the absence of any contrary evidence or expert opi .....

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