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TMI Blog2018 (11) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay Central Excise duty including education cess and secondary higher education cess as well as penalty under the provisions of Section 11A/11A(4) of Central Excise Act, 1944, 11AB, 111AC of the Central Excise Act (for short 'Act') read with Rule 25 of Central Excise Rules, 2002 (for short 'Rules'). 2. The brief fact of the case is that the appellant vide letter dated Nil, received in the office of Deputy Commissioner, Central Excise, Dehradun Division on 29.3.2010, filed a declaration under Notification No. 50/2003-CE dated 10.6.2003 along with various documents in support of setting up of manufacturing unit proposed to be started from 29.3.2010 under the said notification. As per the provisions of Notification No. 50/2003-CE dated 10.6.2003 as amended the exemption was allowed to specified goods in Central Excise Tariff, except those specified in Annexure-I of their aforesaid notification and cleared by unit located in area specified in Annexure-II or Annexure-III appended thereto, subject to fulfilment of other condition of notification, one among which was that the unit should have commenced commercial production by 31.3.2010. 3. In order to verify the eligibility u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Meenakshi Enterprises 817, Sector 23 N.I.T. Faridabad (Haryana); (j) Invoice No. 770 dated 27.3.2010 of M/s Vishwakarma Industries C-167, Sector-3, Bawana Industrial Area, Delhi; (k) Invoice No. 613 dated 20.3.2010 of M/s Vision Graphics, 1-A, Mavi Mohalla, Tehkhand Okhla Industrial Area, Ph-1, New Delhi; (l) Form 32 License to manufacture Cosmetic Products; (m) Stock Register of Bottle 200 Ml. for the month of March 2010; (n) Stock Register of Jar 50 Ml. for the month of March 2010; (o) Stock Register of Labels for the month of March 2010; (p) Daily Stock Account of Shampoo for the month of March 2010; (q) Daily Stock Account of Moisturizer for the month of March 2010; (r) Stock Register of Glycerine for the month of March 2010; (s) Stock Register of Light Liquid Paraffin for the month of March 2010; (t) Stock Register of Propylene Glycol for the month of March 2010; (u) Stock Register of Phenoxy Ethanol for the month of March 2010; (v) Stock Register of Xantham Gum for the month of March 2010; (w) Stock Register of Suffolon LME-28 for the month of March 2010; (x) Stock Register of CAPB for the month of March 2010; (y) Stock Register of Cocodi for the month of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cleared by Invoice No. 001 dated 31.3.2010. However, going through the back label, of 'Boosting Shampoo' it was noticed that Aqua is printed under key ingredients. The DM water which is used in the manufacture of the cosmetics products is sometimes also referred as Aqua. On being asked about the installation of the DM plant/RO plant on or before 31.3.2010, Shri Braham Prakash Sood, in his statement dated 21.3.2011 stated that no DM water plant/RO plant was installed till 31.3.2010. Both DM plant and RO plant were installed by the appellant after 31.3.2010, which is clearly evident from the purchase invoice in respect of RO to DM plant on or before 31.3.2010 and, therefore, it was concluded by the department that there was no commercial production on or before 31.3.2010 as there was no facility of manufacturing of DM water which is one of the essential ingredient of the said shampoo and 'Winter Cherry Lotion'. * 3.4 Stock registers of the appellant was also scrutinised by the department and from the scrutinisation thereof it was found that although the various other ingredients required for the manufacture of boosting shampoo and winter cherry moisturizing lotion have been recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their manufacturing activity at the aforesaid unit. * 4.1 It was also stated that before commencing the commercial production, the appellant filed a requisite option as prescribed in the aforesaid notification by writing the jurisdictional Deputy Commissioner, Central Excise, with a copy to the Range Supdt. on 29.3.2010. It was submitted that the appellant commenced production of the aforesaid two products in their factory on 29.3.2010. The appellant was hopeful of getting finished product cleared on 30.3.2010 and, therefore, they prepared the Invoice No. 001 to 006 bearing date as 30.3.2010. But due to non-receipt of Drug Licence from the competent authority; the first lot of finished goods could be cleared on 30.3.2010. Therefore, the invoice No. 001 to 006 were re-made on 31.3.2010 in the name of the buyers with the same details. However, the appellant on account of their business on account of fast approaching last date, though cancelled invoices dated 30.3.2010 but the same remained lying in the office as the appellant could not destroy the same. The copies of the cancelled invoice dated 30.3.2010 were inadvertently submitted along with reply to the show cause notice to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said raw materials were not used and consequently production of boosting shampoo and winter cherry moisturizing lotion have not been done. 6.1 As regards to allegation of non use of grapes, echinacea, coco butter and winter cherry for manufacturing shampoo, Shri Lokesh Kumar Shambhu, Chemist in their unit, in his statement dated 8.4.2011, stated that these products namely boosting shampoo and winter cherry moisturizing lotion, could be manufactured without using these items. The Commissioner cannot and should not reject part of expert opinion and relying on the some part of the same while rejecting the others and reliance was placed on the case of Ratnamani Metal & Tubes Ltd. Vs. CC - 2013 (291) ELT 369 (Tri.-Ahmd.). It was also submitted by the ld. Advocate that if certain ingredients are not used in manufacture of products, the department cannot force them to do so as this was within the purview of different law enforcing agency. In the appellant's case the buyers have submitted affidavit that they had not received any complaint against the product purchased by their customers which were purchased at the strength of invoice dated 31.3.2010 of the appellant. Further, also not mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003, which is one of the essential ingredient for the manufacture of the cosmetic products manufactured and cleared bythe appellant. This fact is also not disputed by the appellant as the record shows that the DM/RO plant has been purchased on 31.10.2010 by the appellant. Therefore this fact is uncontroverted. However, it is seen that the DM/RO plant is required to produce demineralised water which is required for the manufacture of shampoo and moisturizing lotion manufactured by the appellant. It has been argued by the appellant and also accepted by the Chemist of the appellant that the product could be manufactured without demineralised water plant on account of the fact that the plant is required to produce the distilled water which is to be used in the product manufactured by the appellant. It has been argued that for the demineralised water, it is not necessary that appellants should be having the plant within its manufacturing unit. As the time limit for availing the notification the appellant was approaching fast the appellant decided to use distilled water for the purpose of manufacture of lotion and boosting shampoo. The department has not disputed the use of the distilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... despatch their products on 30.10.2010 by the other set of invoices which was made on 31.10.2010. This argument of the appellant cannot be rejected on the ground that when any intention to suppress the fact would have been there they could not have produced these invoice in their reply to their show cause notice, even inadvertently. It is, therefore, that there was no mala fide on the part of the appellant. Subsequently, on being aware of the mistake they submitted another set of invoices which was issued on 31.10.2010. Since the expiry date of the notification was coming fast there was no option but to clear the goods before 31.10.2010. After going through the Notification 50/2003 we have seen that the condition is as under : Notification No. 50 /2003 - Central Excise "G.S.R (E) .- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted to verify the correctness of your intimation and claim of exemption under said notification. The officers visited your factory premises on 24.04.10. At that only one person, Shri C.H. Viswakarma was available in the unit. He told the Officers that he look after the maintenance of the unit. During visit the Officers found that no plant and machinery was available in the premises except one Pedal Filing Machine. Though some raw material was also available in the unit but neither manpower nor any record was available. Further no manufacturing was being done in the premises. The Officers requested to Shri Vishwakarma to tender his statement but he denied and submitted that he is not authorised for the same. The Officers shot the photographs of the unit and drawn a panchnama in the presence of two independent witnesses. The Officers observed that you have not commenced the commercial production till 31.3.2010 as stipulated under the said notification no. 50/2003-CE dated 10.06.03 and therefore not eligible for Central Excise duty exemption under said notification. In view of above observations, you are suggested to get yourself registered under Central Excise Rules, immediately a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 10. Drug license Certificate no. 33/CA/2010 dated 30/03/2010 10 11. Chartered Engineer's Certificate dated 31/03/2010 11 12. Khasra Number Certificate dated 08/04/2010, issued by Tehsildar, Haridwar. 12 13. Air and Water Consent from Uttarakhand Pollution Control Board Certificate dated 01/10/2010 13 13. The department has not verified all these submissions made by the appellant and concluded that the manufacturing activity has not started before 31.3.2010, which is not correct on the part of the Revenue. We find that the appellant has contested the Revenue's stand that manufacturing operation has not taken place has been contested by the appellant. The due verification was required to be done by the Revenue before proceeding with denial of exemption notification raising against the appellant. We do not find any evidence to the effect that these activities were not undertaken by the appellant. 14. In this regard, we also find that similar issue has been decided by Hon'ble CESTAT in the case of Vega Auto Accessories Pvt. Ltd. Vs. CCE & ST, Meerut-I vide Final Order No. 50711-50715/2017 dated 6.2.2017, wherein the Tribunal had held as under : "8. We find that during ..... X X X X Extracts X X X X X X X X Extracts X X X X
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