TMI Blog2021 (1) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... ssable value/transaction value by including all expenses incurred, including sizing and transportation right up to the place of removal, as per the provisions of the Central Excise Act, for which it was duly registered under the provisions of the Central Excise Act with the jurisdictional Central Excise authorities. Returns under the Act have also been submitted by ICML, which have been finally assessed and differential duty, if any assessed, have also been paid by ICML. The proceedings under the said show cause notices have resulted in adjudication orders, passed by the Commissioner of Central Excise, Kolkata-I Commissionerate/Principal Commissioner of Central Excise, Kolkata-I, dated 16.12.2014, 14.10.2015 and 27.05.2016 respectively. There the stand of the Central Excise Department is that ICML is engaged in the manufacture of bituminous coal classifiable under Chapter Sub-Heading 27011200 of the First Schedule to the Central Excise Tariff Act, 1985, for which it is holder of central excise registration number, and that ICML had manufactured and cleared the said goods on payment of central excise duty computed on the assessable value/transaction value that included the base p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as the Sarshatali Coal Mine. (b) On August 14, 2002 ICML entered into an agreement with CESC Ltd., Kolkata, to mine coal from the said mines and to sell the same to CESC Ltd. ( CESC ) for use in its power projects on terms and conditions specified in the agreement. (c) Similar agreement was subsequently entered into by ICML with Crescent Power Ltd. ( CPL ), a wholly owned subsidiary of CESC on March 30, 2010, for sale of certain inferior quality coal, commonly known as carbonaceous shale or shaly coal (hereinafter referred to as carbonaceous shale ) from the said coal mine to CPL, on terms and conditions specified in the said agreement dated 30.03.2010. (d) The coal that comes directly from mines, after blasting, known as the run-of-mine coal ( ROM ), are of irregular sizes, including large fragments. In terms of the abovestated agreements, ICML has to supply coal of specifications and quality, depending upon the intended use thereof, as specified. Since the ROM coal does not conform to the size and specification required to be delivered to the buyers and cannot be sold and transported as such, the said ROM coal has therefore to be prepared. Such preparation includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Advocates appear on behalf of the Respondent, M/s ICML. 4. Shri K. Chowdhury Ld. A.R. reiterates the grounds of appeal and contends that the Adjudicating Authority had erred in holding that sizing of coal is a process incidental and ancillary to manufacture of coal and that coal is a manufactured product and thereby dropping the demand of service tax made in the show cause notice. In support of his contention the Ld. A.R. has relied upon the observations of the Review Committee, set out in the appeal petition. According to the Review Committee: (i) Coal, produced or mined or raised, is not a product that comes into being after manufacture; (ii) Since Section 3 of the C.E. Act provides for levy of excise duty on goods either manufactured or produced, excisability of coal is not affected for it being produced and not manufactured; (iii) There is no proof regarding the necessity of sizing to be an essential precaution to render coal marketable. Beneficiation of coal, which includes washing and sizing/crushing, does not amount to production of coal, it only enhances the quality of coal. Moreover this job can be done by independent operators. Therefore, the Commissioner s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the order passed by this Bench of the Tribunal in Avian Overseas Pvt. Ltd. Vs. Commr. of C.Ex., Cus S.T., 2009 (15) STR 540 (T-Kol). Reliance in this regard has also been placed on Review Committee s observation contained in the Revenue s appeal petition as under: So far as inclusion of sizing charges into the gross value of the product on which excise duty is paid, it is observed that for a major part of the period for which the demand is raised, coal though excisable, was subject to zero excise duty . It is contended that there is thus acknowledgement on the part of the appellant that coal is an excisable product on which excise duty is payable since, as per settled law, nil rate of excise duty is also a duty. (iii) It is a settled principle that if certain activity amounts to manufacture it cannot become or be contended to be service , and vice versa, scheme of taxation under the Constitution providing for mutually exclusive levies. In this respect reliance was placed upon the following decisions: (a) Sri Rama Vilas Service Ltd. Vs. Commissioner of C.Ex., 2019 (25) GSTL 117 (T) (b) Osnar Chemical Pvt. Ltd. Vs. CCE, 2009 (240) ELT 115 (T), para 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods to the said designated place. The contracted price in this case also includes sizing charges. 7.2 Section 65(19)(v) of the Finance Act includes, as Business Auxiliary Service , production or processing of goods for and on behalf of client . The requirement for application of this clause is that the goods in question has to belong to the client of the appellant assessee, on which production or processing which does not amount to manufacture of goods within the meaning of Section 2(f) of the Central Excise Act is carried out by the appellant assessee. This requirement is not satisfied in the instant case. At the time when the sizing of coal takes place, they continue to remain ICML s property and not that of either CESC or CPL. The sale of coal and consequently the title thereof passes on to CESC/CPL only at the delivery point specified in the respective agreements, which is after completion of sizing of the coal. There is therefore no production or processing of goods for and on behalf of any client or customer, as required under Section 65(19)(v) of the Act. 8. In terms of Section 65(19) of the Finance Act, 1994 any activity that amounts to manufacture within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d show cause notices have resulted in adjudication orders, passed by the Commissioner of Central Excise, Kolkata-I Commissionerate/Principal Commissioner of Central Excise, Kolkata-I, dated 16.12.2014, 14.10.2015 and 27.05.2016 respectively. There the stand of the Central Excise Department is that ICML is engaged in the manufacture of bituminous coal classifiable under Chapter Sub-Heading 27011200 of the First Schedule to the Central Excise Tariff Act, 1985, for which it is holder of central excise registration number, and that ICML had manufactured and cleared the said goods on payment of central excise duty computed on the assessable value/transaction value that included the base price, sizing charges, washing charges and transportation charges, but had not paid central excise duty by not including cesses/fees, royalty and stowing excise duty, resulting in short payment of excise duty payable of amounts confirmed by the respective adjudication orders. Even for the periods pertaining to years 2015-16, 2016-17 and 2017-18 (upto June 30, 2017) the assessments under the Central Excise provisions have been finalised by the jurisdictional proper officer and differential central excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, in cases involving the same issue: (i) Northern Coalfields Ltd. Vs. Commissioner, CGST, CE C, 2020-TIOL-338-CESTAT-DEL (ii) South Eastern Coalfields Ltd. Vs. CCE ST, 2018-TIOL-1691-CESTAT-DEL (iii) Northern Coalfields Ltd. Vs. CGST, CC CE, 2018 (8) TMI 1742 - CESTAT - DELHI. 11.3 In this regard reference is also made to the decision of a coordinate bench of the Tribunal in CCE Vs. Spectron Engineers Pvt. Ltd., 2020 (33) GSTL 223 (T). In para 4 of the order it has been observed as follows: 4. Having heard both sides, we find ourselves confronted with a dispute in which the jurisdictional central excise authorities seek to levy duties under Central Excise Act, 1944 while respondent claims leviability under Finance Act, 1994. That the respondent had been discharging service tax liability on job work and had been paying VAT on the material component is not in doubt. The original authority has placed reliance on the decision of the Tribunal in Osnar Chemical Pvt. Ltd. V. Commissioner of Central Excise, Bangalore-II [2009 (240) ELT 115 (Tri-Bang.)] to hold that discharge of tax liability under one law precludes the invoking of another law merely for garn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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