9911796707
TMI Blog2024 (3) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondents. 3. The litigation started from an order passed by Respondent No. 2/Additional Commissioner, Customs & Central Excise, Hyderabad demanding duty and penalty upon the product sold by the appellant from its unit which is operated in Hyderabad. The whole issue arose when a show cause notice dated 08.01.1999 was issued by respondent No. 3/Deputy Commissioner of Central Excise, Hyderabad to the appellant alleging that the appellant is engaged in the manufacturing and selling of "Activated Bleaching Earth" and "Activated Carbon" and both these products being excisable goods, the appellant by his conduct has suppressed material facts and information from the authorities and have also not paid requisite duty under the excise law. Therefore, the appellant is liable to pay the duty along with penalty etc. The appellant therein gave a detailed explanation and reply to the show cause notice and also produced necessary records available with them. 4. Respondent No. 2 thereafter passed the Order-in-Original on 21.10.1999. In the course of passing the Order-in-Original, respondent No. 2 went on to decide whether the raw material fuller's earth lumps were being subjected to und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eached to the following finding of fact which for ready reference is being reproduced herein under: FINDINGS "(i)The appellants are procuring Fuller's Earth lumps, a mineral clay, which is also known as Mantmorillonite or Bentonite. The Fuller's Earth lumps are crushed in jaw crusher and the crushed material is then pulverized in the Pulverisers. This powder is heated in the furnace between 200 C to 300 C. Then it is treated with Sulphuric acid. The Fullers Earth Powder, on heating gets thermally activated and then by adjusting its pH value by the addition of Sulphuric Acid, gets powerful adsorption properties. As is evident from the invoices, the appellants are manufacturing various grades of Activated Bleaching Earths viz., SC 900, SC 200, Black, RB Grade, SC 100, SC 1500, for Castor Oil, Soya Grade, for Cotton Seed Oil SF, SSF, SC 60 etc., To given an illustration with regard to various grades of the product, Cotton Seed Oil is very darker in colour on extraction while Soya Bean Oil is lighter in colour. Thus, the decolouring agent has to have strong adsorption properties in case of Cotton Seed Oil than that of Soya Oil for decolourizing them. Hence, there is difference in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moisture absorption or filtering etc. The appellants' product does these functions. Thus is an Activated Bleaching Earth classifiable under chapter heading 3802 of Central Excise Tariff Act. Further, as per the technical opinion given by experts that while Fullers Earth in its original form has absorbing characteristics after the thermal and chemical treatment if gets the characteristic being an adsorbant capable of being used for decolouring, filtering etc. When Fullers Earth is crushed its superficial form undergoes a change, thus making it an activated bleaching earth. The Ld. DR also points out the price differential between Fullers Earth in its raw form and its finished form as marketed. We therefore hold that the process to which Fullers Earth is subjected to amounts to manufacture and that in its modified form if falls under 2802 of Central Excise Tariff Act. 7. The appellants were found to be describing their product as Fullers Earth thereby avoiding payment of appropriate duty. The period involved is 1994-95 to 1997-98. We hold that duty is payable as demanded involving larger period of limitation as the appellants contravened Central Excise Rules with an intent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] and the word "manufacturer" shall be construed accordingly and shall include not only a person who employer hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;]" 10. Likewise, in order to answer the question whether the respondents were justified in invoking the provisions of Section 11A for the extended period of limitation, it would be relevant to take note of the contents of Section 11A(1), particularly clause (a) of Section 11A(1) both of which are reproduced herein under: "11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful mis-state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earth with bentonite and concluded that both are the same which is in fact contradicting their own experts scientific opinion. 11.7 The further ground of learned counsel for the appellant was that respondent Nos. 1 and 2 have arrived at a biased conclusive finding that the appellant is manufacturing activated bleaching earth and activated carbon without any legal basis for the same based on alleged report given in some other matter by one Mr. Nazir Ali who was a consultant to some competitor of this appellant. 11.8 It was also contended by the learned counsel for the appellant that the authorities concerned have failed to appreciate the independent report and analysis obtained by the appellant from reputed government scientific research organization i.e. Indian Institute of Chemical Technology which had clearly opined that the appellant do not have required capable plant and machinery to manufacture activated bleaching earth for activated carbon. 11.9 The additional ground that the learned counsel for the appellant had raised was that the products even after subjected to wash with chemicals and exposed to heat, neither their characteristics changed nor the usage by just some pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be entertained by the High Court in the event of there being a substantial question of law made out and not otherwise. According to the learned Senior Counsel, since there is a concurrent finding of fact given by two statutory authorities and the Tribunal, it amounts to a finding of fact which has been accepted and concurred by two of the appellate forums. In the given factual backdrop, there is hardly any scope of interference left for this Court in the instant appeal and therefore deserves to be rejected. 14. It was contended by the learned Senior Counsel that the Assessing Officer at the first instance and the appellate authority subsequently has elaborately and extensively dealing with the process undertaken at the appellant company and taking into consideration the details in the invoices prepared in the course of sale of the product coupled with admitted factual matrix so far as the entire process undertaken by the appellant company has arrived at the findings. Further, none of the grounds raised by the learned counsel for the appellant can be said to be a substantial question of law. Rather, it is a pure finding of fact and for this reason also the appeal deserves to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant case the name of the product manufactured by the assessee is "Activated Bleaching Earth" and "Activated Carbon", this is also as per the certificate issued by the Industries Department, Government of Andhra Pradesh. The customers are also placing orders for "Activated Bleaching Earth" and "Activated Carbon" and the assessee is clearing the same as per the requirement of the customers through his invoices. The fullers earth being a natural mineral clay possess some characteristics. The fullers earth in raw state contains moisture and has no decolourising power and this when used as such, will act as an absorbent medium. While the new product manufactured by the assessee i.e., "Activated Bleaching Earth" which is produced by thermal activation of fullers earth and by adjusting pH value by addition of sulphuric acid gets powerful absorption properties. The chemical treatment is necessary to make the constituents neutral so that they do not participate in the reaction since they have powerful adsoption properties during filteration of oils. The character of the finished goods is entirely different from that of fullers earth. The end use of the product required for usage in Indust ..... 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