Ambasamudram Sarvodhaya Sangh vs Commissioner of Central Excise, Coimbatore>2000(11)LCX0001

2000(11)LCX0001

IN THE CEGAT, SOUTH ZONAL BENCH, CHENNAI

S/Shri S.L. Peeran, Member (J) and S.S. Sekhon, Member (T)

AMBASAMUDRAM SARVODHAYA SANGH

Versus

COMMR. OF C. EX., COIMBATORE

Final Order No. 1639/2000, dated 27-11-2000 in Appeal No. E/2703/94-C &Cross Obj/2/2000

Cases Quoted

Collector v. Sun Paper Mills — 1984(12)LCX0004 Eq 1985 (020) ELT 0120 (Tribunal) — Referred........................ [Para 3]

Standard Fire Works Industries v. Collector — 1987(02)LCX0014 Eq 1987 (028) ELT 0056 (S.C.) — Referred........ [Para 2]

DEPARTMENTAL CLARIFICATION CITED

C.B.E. & C. Circular No. 59/90-CX-3, dated 22-11-1990..................................................... [Para 3]

Advocated By : Shri S. Kannan, DR, for the Appellant.

Shri C. Chidambaram, Consultant, for the Res-pondent.

[Order per : S.S. Sekhon, Member (T)]. - This appeal is filed by Revenue against the order of Collector by Order-in-Original No. 3/92, dated 26-2-1992 holding that ‘Javvadu Powder’ is not excisable and would not attract levy of duty and therefore further proceedings before him by issue of SCN No. 03/92, dated 27-11-1991 deserve to be dropped.

2. ’Javvadu Powder’ is obtained by mixing of sandalwood powder with sandalwood oil and fancy flower perfumes manually. The basic raw material i.e. sandalwood was got ground into powder in local mills using power and this process of mixing resulted in emergence of a new distinct identifiable product and therefore manufacture took place and the product should have been classified after considering the HSN notes under 33.03 in view of use of power driven outside the factory as held in Standard Fire Works Industries - 1987(02)LCX0014 Eq 1987 (028) ELT 0056 (S.C.).

3. The respondents have filed cross objections submitting that the Counsel had filed all submissions that proper declaration before the Central Excise officers was filed as far back as 1986 and also details of expenditure incurred as well as extract of entries made for drawal of samples of agarpathis and javvadu powder in their unit were produced which would prove that proviso to Section 11A was not invokable in their case. It was also submitted in the cross objections that the calculation of the rate of duty at 20% for the period 1985-86 when the item was falling under Tariff Item 68 and fully exempt is not called for. From the turnover submitted to the department, it would be found to be well below the exemption limit of 7.50 lakhs and no declaration or registration with the said SSI authorities were required in 1988-89 to 1990-91 and the turnover was well within the limit of Rs. 20 lakhs and therefore if it is held that the said product is excisable under Tariff Item 33.03 they would be entitled to the benefit of SSI exemption 175/86 and 140/83 during the period of demand. Written submissions handed over by the ld. Consultant to the Collector were reiterated in reply to the second show cause notice, which was revised and therefore hit by limitation as it raises basically different ground from the original show cause notice in this case. They relied upon Sun Paper Mills case 1984(12)LCX0004 Eq 1985 (020) ELT 0120 (Tribunal) and submitted that the order of the Collector has not given any findings on these submissions put forth before him and submitted that even Circular No. 59/90-CX-3, dated 22-11-1990 which clarified that ‘javvadu powder’ is appropriately classifiable under 33.03. Ld. Consultant dealing with the classification of the product, concedes the point that they are bound by this circular issued by the Board. He submits that Tribunal should grant them benefit of exemption notification as mentioned in the cross objections and also alternatively hold the demand to be barred by limitation.

4. We have heard ld. DR Shri S. Kannan for the department who submits that clarification of the Board brings out as to why the product under dispute is excisable and leviable for duty under chapter heading 33.03. He submitted that he has no objection to the matter being sent back to the original authority in view of Consultant admitting the classification for determination of eligibility of SSI and of limitation on which the original authority, as recorded, has not given any findings.

5. We have considered the submissions. From the material on record and after going through the impugned order of the Collector, we find -

(a) the order passed is dated 26-2-1992. Therefore the Board’s Circular dated 22-11-1990 was binding on him, as he has come to the conclusion that the goods are not excisable by ignoring the Board’s orders, the same cannot be upheld. The Board’s circular gives a very clear reason for classification of the very same product, along with other products as the classification under 33.03 and 3707.90. Collector’s order therefore is incorrect and beyond the Board’s order which was binding on him as regards classification.

(b) We find that ld. Collector has recorded all the submissions made before him regarding the claim for turnover benefit being SSI unit and on time bar. The order of the Collector is silent on this aspect. Therefore, we find that order of the Collector suffers from infirmity and therefore is required to be set aside. The determination of issue of limitation which goes to root of a demand and also question of eligibility of notification are required to be determined as pleaded by the ld. Consultant at the hearing today. This will require a remand of this matter to ld. Collector for re-adjudication by going into the facts which are not before us today as regards the turn over of the items and any other excisable specified goods which the appellant may be manufacturing and for this purpose matter is required to be remanded for de novo adjudication.

6. In view of our findings, the order of the Collector noting the items non-excisable is set aside. The item is classifiable, under 33.03 following the reasons in Board’s instructions to classify under 33.03 of the CET Act, 1985. The matter is therefore remanded for determination of eligibility of SSI exemption and question of limitation. The manufacturers respondents are at liberty to produce such material as they would like to place before the original authority to claim the benefit of the exemption. Appeal and cross-objection are disposed of in the above terms.

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Equivalent 2001 (130) ELT 0607 (Tri. - Chennai)