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TMI Blog2024 (4) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... ail the Order-in-Appeal dated 13.06.2018 passed by the Commissioner (Appeals) Jodhpur, whereby he upheld the order dated 31.05.2016 passed by the Assistant Commissioner and rejected the appeal filed by Manglam. 2. Excise Appeal No. 50981 of 2018 has been filed by M/s Hindustan Phosphate Pvt Ltd. [Hindustan] to assail the order-in-appeal dated 22.02.2018 passed by the Commissioner (Appeals) Central Excise, CGST, Jodhpur whereby he reduced the penalty under rule 26 of the Central Excise Rules imposed on the appellant by the Assistant Commissioner by order dated 31.05.2016 to Rs. 50,000/-. 3. It needs to be pointed out that order-in-original dated 31.05.2016 is the same in both these appeals, but the Commissioner (Appeals) passed different o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Manglam to M/s Mahadhan Phosphate Pvt Ltd. [Mahadhan] who, in turn, sold the SSP to Hindustan. Hindustan used the SSP manufactured by Manglam to manufacture Calcium Phosphate. In other words the SSP which was clearly marked as "meant for agriculture use only" was put to industrial used by Hindustan. 7. Acting on intelligence, the officers of Central Excise visited the manufacturing unit of Hindustan and found that the SSP meant for agriculture was being used for other purposes. Accordingly, the SSP was seized under section 110 of the Customs Act, 1962 as made applicable to central excise. 8. Investigation was completed and the show cause notice was issued to the Manglam proposing to recover the differential central excise duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those which are clearly not meant for agriculture use. In their case the entire production was meant for agriculture use only and it was explicitly mentioned so on every pack; (b) Manglam had sold the SSP to IPL after which it had no control over SSP because it became the property of the IPL. There was no scope for Manlgam to have sold the SSP to any other person; (c) IPL further sold the SSP to Mahadhan who sold it to Hindustan. It is Hindustan which had, used the SSP meant for agriculture used to manufacture Calcium Phosphate; (d) Manglam's responsibility ended with paying duty as applicable and selling to IPL. What happened thereafter was not under control of Manglam; (e) The department should recover the duty either from Mahadha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturer has to determine the amount of duty payable which he can pay by 6th day of the following month. 16. In assessing the rate of duty, the classification, the valuation and exemption notifications must be considered. Fertilizers, including SSP, undisputedly fall under Chapter 31 of the Central Excise Tariff and were chargeable to a concessional rate of duty only 1% as per the Exemption Notification unless they were clearly not meant for agriculture use. At the time of clearance, the bags clearly indicated that the SSP manufactured by Manglam was "for agricultural use only". Therefore, the duty was assessed accordingly as per the law. 17. The case of the revenue is that after the SSP was removed and sold to IPL, IPL further sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Rules provides for imposition of penalty if the person concerned is aware about the wrong action of the assessee, which makes the goods liable for confiscation. Since, the Hindustan was not the manufacturer no penalty can be imposed upon it; (ii) The Commissioner held that the goods manufactured and cleared availing the exemption notification were liable for confiscation under rule 25(1)(b) of the rules and upheld the confiscation of the seized goods by the adjudicating authority; (iii) Hindustan purchased the SSP from Mahadhan who, in turn, had purchased it from IPL. The SSP was of non-standard grade. Therefore, the confiscation of the SSP was illegal and unwarranted. Consequently, the imposition of redemption fine of Rs. 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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