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2017 (4) TMI 893 - CESTAT ALLAHABAD

2017 (4) TMI 893 - CESTAT ALLAHABAD - TMI - Compounding scheme - Aluminum Circles - N/N. 34/2001 CE dated 28/06/2001, as amended - whether the compounding facility have been rightly rejected? - whether the appellant is liable to pay Central Excise duty on removal of the scrap during the period of dispute June, 2003 to March, 2006? - Held that: - there is no cotumacious conduct on the part of the appellant in not paying the duty on Aluminum Circles, their intermediate product. The appellants .....

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of exemption on removal of scrap when the final product is not liable to duty, is far-fetched and amounts to stretching the law which is not permissible - the appellant is entitled to the compounding facility under N/N. 34/2001-CE, and they have rightly paid the duty - the appellants are also not required to pay duty on the Aluminum Scrap removed, in terms of N/N. 89/95-CE. - Appeal allowed - decided in favor of appellant. - Appeal No. E/557/2011-EX [SM] - Final Order No. 70321/2017 - Date .....

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e been rightly rejected and secondly, whether the appellant is liable to pay Central Excise duty on removal of the scrap during the period of dispute June, 2003 to March, 2006. 2. The brief facts of the case are that the appellant is engaged in the manufacture of Aluminum Utensils falling under CETH 7615 and they also manufacture intermediate product namely; Aluminum Circles falling under CETH 7606. As Aluminum Utensils were exempted from levy of Central Excise duty, the appellant did not take r .....

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actured Goods 7008.000 6,73,600/- Total 30,01,651/- The stock found, was recorded in the Panchnama dated 23/02/2007. Statement of Director Shri Murlidhar Agarwal was recorded who stated that since March, 2006 no production had been carried out in the factory. He further informed that from May, 2003 to March, 2006 they had carried out production of Aluminum Utensils in the unit. No records relating to production, clearances, sales/purchases were available in the unit. It also stated that registra .....

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76069110 attracting duty @ of 16% Adv. It appeared that there are two procedures adaptable for paying Central Excise duty on Aluminum Circles: (A) payment of duty @ of 2500 per MT under Notification No. 6/2002 CE subject to condition that no Cenvat credit is taken on inputs or capital goods and the second condition being that the goods are not produced or manufactured from Aluminum ore or Aluminium concentrate, or (B) In terms of under Notification No. 34/2001 CE dated 28/06/2001 as amended, whe .....

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ity of utensils manufactured and cleared during the relevant period. Further, the quantity of stock of Aluminum Scrap cleared during the said period. Based on those figures Revenue calculated the quantum of Aluminum Circles, likely to be manufactured, based on the stated 10% loss during the manufacture of utensils from Aluminum Circles and accordingly duty was calculated for the said period, amounting to ₹ 18,37,641/- being Central Excise duty @ 2500 per MT. They have further recorded that .....

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of ₹ 27,53,882/- was proposed to be levied on clearance of Aluminum Circles 2,11,050.02 Kgs during the said period and further penalty was proposed under Rule 25 read with Section 11 AC of the Central Excise Act, 1944, with further proposal to appropriate the amount of ₹ 3,40,000/- deposited. The Show Cause Notice was adjudicated on contest and the proposed demand was confirmed with interest and further penalty of ₹ 18,14,449/- was imposed under Section 11 AC of the Central Ex .....

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t Commissioner in the Order-in-Original and also imposed penalty under Section 11 AC of the Central Excise Act, 1944 of equal amount on the same. The ld. Commissioner (Appeals) disputed that this demand was dropped on the ground that Aluminum Utensils attracted nil rate of duty and waste and/or scrap arising during manufacture, were also exempted in terms of Notification No. 89/1995 CE dated 18/05/1995. The ld. Commissioner observed that the said notifications says that nothing contained in this .....

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this Tribunal. 3. Heard the ld. Counsel, Shri Raj Kumar Chartered Accountant, for the appellant-assessee. He stated that during the course of visit of the Preventive Officers to the appellant s factory, the appellants are made to understand that they can discharge duty liability for manufacture of Aluminum Circles intermediate product, in terms of Notification No. 34/2001-CE and accordingly, the appellants deposited an amount of ₹ 3,40,000/- on 07/08/2008 (compounding scheme.) On Aluminum .....

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ian Medical College Hospital reported at 2007 (208) E.L.T. 531 (Tri. Chennai). This Tribunal held that where option of choosing between two notifications is there, and description of goods in both notifications give opportunity to the assessee to choose one of his choice, the assessee is entitled to choose a notification more favourable to him. He, further, states that there is no disability in the said Notification No. 34/2001-CE that if the same is not opted for, prior to the date of productio .....

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e registered manufacturer of Aluminum Circles, which only arise as an intermediate product during the course of manufacture of utensils and as such a notification cannot be interpreted with respect to the intermediate product, which is not the main product. Accordingly, pray to allow the appeal with consequential benefits. 4. Heard ld. A. R. for Revenue relied on the findings in the impugned order and has also taken me through the conditions for applicability of Notification No. 34/2001-CE, the .....

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