TMI Blog2000 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, Rocker, Slides, Play Table, Play Pool, Baby Chair and Desk. 2.On 24-4-1997, Anti-Evasion Branch officers visited the factory and pursuant to the enquiries made by them a Show Cause Notice dated 1-5-1997 (herein after referred to as first SCN) demanding duty amounting to Rs. 18,82,080/- in respect of moulding powder prepared by them and consumed captively in the manufacture of exempted final products during the period October, 1996 to March 1997 was issued by Commissioner (Central Excise), New Delhi. This was adjudicated vide O/o No. 32/97-D-III, dated 18-11-1997 wherein the Commissioner found that conversion of granules into powder amounts to manufacture even though the assesses claimed that the specific gravity of the LDPE granules u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to duty as under : - (i) Rockers, Slides : Toddler Swings, Fan Fliers are mainly meant for the children playground and are classifiable under heading 9506 of the Central Excise Tariff Act 1985 with Basic Excise Duty @ 15% Adv. alongwith SED @ 15% of BED during the year 1992-93 up to Feb. 1997 and @ 13% Advance (sic) thereafter was payable. (ii) Activity Desks and Chairs : Play Tables thereof were furnitures classifiable as under seats under heading 94.01 and other furniture's under heading 94.03 and the BED @ 20% Adv. alongwith SED A 15% of BED during 1992-93 up to Feb. 1997 and @ 18% thereafter was payable. (iii) The Play Pool was another variety of bath tub of plastics and as such was classifiable under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where classification was impugned in the SCN to take them away from the scope of being a toy as they ceased to be an object of entertainment for the children. He classified them as proposed in the second SCN and confirmed the duty demanded and imposed a penalty of Rs.2,50,29,984/- under the provisions of Section 11 AC and held them liable to pay interest under Section 11 AB on the amount of excise duty from the day it became due. The appeal E/732/99-C is against this order. 5.We have heard both the sides in these appeals and after considering the material on record we find : - (i) The Commissioner's finding regarding converting the items, into moulding powder in proportions, depending upon the end product to be moulded, will no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be upheld in view of Chamundi Steel Re-Rolling Mills - 1996 (81) E.L.T. 563 (T) and Sinter Plast Containers case 1996 (66) ECR 531 (T) and other decisions where it was held that credit could not be denied if duty paying documents were available. The matter is therefore, required to be remanded back to the Adjudicator for ascertaining the quantum of eligibility and pass an order after considering the eligibility of MODVAT credit. (iii) The suppression of facts as arrived at by the commissioner in non intimating the production of 'powder would justify the invoking of longer period under proviso Section 11 A. (iv) As regards classification of ROCKER, SLIDE, CHAIR, SWING, DESK, PLAY TABLE, POOL etc. we find Toy, Game etc. is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecially regarding the end use and commercial parlance Test, the classification as settled by the impugned order cannot be upheld, it is required to be set aside. If by applying the Commercial parlance Test and the HSN notes these items are held as Nil-dutiable then Modvat credit and demands upto the stage of Moulding Powder used in them has to be determined; if these items are found to be dutible; then demand on moulding powder used in preparation of these items cannot be made. Therefore, demands have to be reworked out in totality by deciding both the SCN's together after determining the question of Modvat credit eligibility. (ix) Once demands are reworked out, the penalty and interest liabilities will need to be refixed according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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