M/S. Chiripal Industries Limited vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIO-01/COMMISSIONER/RAJU/AHD-I/2013 dated 05.02.2013, OIO-VAP-EXCUS-000-COM-091-13-14 dated 31.03.2014, passed by Commissioner Central Excise, Service Tax & Customs, Ahmedabad / Vapi)

M/s. Chiripal Industries Limited : Appellant (s) Shri Jyotiprasad Agrawal M/s. Beekalyon Synthetics Pvt Limited Shri Ranjit K Chowdhary

VERSUS

Commissioner of Central Excise & S.T., Ahmedabad : Respondent (s)

and

Appeal No. : E/11206/2013

Commissioner of Central Excise & S.T., Ahmedabad : Appellant (s)

VERSUS M/s. Chiripal Industries Limited : Respondent (s)

Represented by :

For Assessee (s) : Shri P.M. Dave & Shri Prakash Shah, Advocates For Revenue (s) : Shri Deepak Kumar, Spl. Counsel and Shri K. Sivakumar, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. H.K. Thakur, Hon'ble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. H.K. Thakur, Hon'ble Member (Technical)

Date of Hearing/ Decision : 06.05.2015

ORDER No. A/10520-10526/2015 dated 06.05.2015

Per : Mr. H.K. Thakur;

These appeals have been filed by the appellants with respect to OIA No. 01/COMMISSIONER/RAJU/AHD-I/2013 dated 05.02.2013 passed by Commissioner of Central Excise, Ahmedabad-I and OIO No.VAP-EXCUS-000-COM-091-13-14 dated 31.03.2014, passed by Commissioner of Central Excise, Vapi. Under these orders, Adjudicating authorities have denied the benefit of Sr. No. 6 of Notification No. 30/2004-CE dated 09.7.2004, as amended, to the appellants. As the issue involved in all these appeals is the same, therefore, all of them are being taken up for disposal under this common order.

2. Shri P.M. Dave (Advocate) and Shri Prakash Shah (Advocate) appeared on behalf of the appellants. Shri P.M. Dave appearing on behalf of his clients argued that their appeals are covered in their favour according to Order NO. A/11805 to 11835/2014 dated 27.10.2014 passed this Bench in the case of Garden Silk Mills Limited vs. CCE & ST, Surat-I. Learned Advocate made the Bench go through the provisions contained in Sr. No. 6 of the Table of Notification No. 30/2004-CE dated 09.7.2004, as amended, and paragraph 9.3 to 9.8 of the order dated 27.10.2014 passed by this Bench in the case of Garden Silk Mills Limited. It was their case that the facts of the case in the relied upon case and the present appeals are the same. It was also argued by the learned Advocates appearing on behalf of the appellants that demand beyond a period of one year are time barred as there was a general practice in the trade that benefit of Notification No. 30/2004-CE was admissible and all such manufacturers were availing the benefit of this notification. It was thus argued on behalf of the appellants that there can not be any intention to evade payment of tax and extended period will not be invokable.

3. Shri Deepak Kumar (Special Counsel) and Shri K. Sivakumar (AR) appeared on behalf of the Revenue. Learned Special Counsel argued that the word manufacturer used in exemption Notification No. 30/2004-CE; read with the definition of the word person as given in Section 2(31) of the Income Tax Act, 1961; should mean a juristic person and should include all the units of a group of companies. Learned Special Counsel also brought to the notice of the Bench Sr. No. 114 of the table to Notification No. 06/2000-CE dated 01.3.2000 to argue that before Notification No. 30/2004-CE exemption was available to independent texturisers only and as per Para 23.2 of CBEC DO F. No. 334/1/2005-TRU dated 28.2.2005, the exemption should be granted to independent processors only. It was his case that by virtue of having other factories for manufacturing goods of Chapter 54, the present appellants do not remain independent processors. It was also argued by the Learned Special Counsel that all the factories of the appellant should be considered as one factory by a combined reading of Section 2(m) of the Factories Act, 1948, as interpreted by Supreme Court in the case of SGC & D TEU vs. SGC & IT Limited & Anr. [1986-1-LLJ 490 (SC)].

Learned Senior Counsel also argued that the demand is not time barred, becasue the appellants were not availing the benefit of Sr. No. 114 of the Notification 06/2000-CE dated 01.03.2000 as was the facts in the case of M/s. Garden Silk Mills and others. Hence, the Tribunals judgment in the case of Garden Silk Mills & Others, in so far it relates to time bar aspect is concerned, would not be applicable to the facts of this case. That appellants have never disclosed the fact that they have not procured POY from outside but procured it from their sister unit. That appellants never disclosed the fact they were single legal entity/ owner of all the divisions order were both manufacturer of POY as well as POY. They suppressed the fact that the income from both the units was shown under the single head in their annual report and no sales tax/ VAT was paid by them while clearing POY from Fibre division to Fabric division. That appellants also suppressed the fact they did not have separate PAN/ Bank Account/ Sales number etc. They wilfully defrauded the Government revenue by hiding the fact that no monetary transfer was taking place for supply of POY by the Fiber division to the Fabric division.

They have wilfully suppressed the material fact by reason of fraud, collusion or contravention of the provisions of the act or rules made thereunder with the malafide intention to evade the Central Excise duty.

4. Heard both sides and perused the case records. The issue involved in the present appeals is whether the benefits of exemption under Sr. No. 6 of the Table to Notification No. 30/2004-CE will be admissible to the appellant or not. The said exemption provisions are reproduced below:-

S. No. Chapter or Heading No. or Sub-Heading No. Description of goods

6.

54

All filament yarns procured from outside and subjected to any process by a manufacturer who does not have the facilities in his factory (including plant and equipment) for manufacture of filament yarns of chapter 54.

Explanation. - For the purposes of this explanation, manufacture of yarns means manufacture of filaments of organic polymers produced by, -

(a) polymerization of organic monomers, such as, polyamides, polyesters, polyurethanes, or polyvinyl derivatives; or

(b) by chemical transformation of natural organic polymers (cellulose, casein, proteins or algae), such as viscose rayon, cellulose acetate, cupro or alginates.

4.1 On perusal of the Order No. A/11805-11835/2014 dated 27.10.2014 in the case of Garden Silk Mills & Others, passed by this Bench in the case of Garden Silk Mills vs. CCE & ST, Surat-I and others, it is observed that facts involved in the present appeals and the facts involved in the appeals before this Bench while passing order dated 27.10.2014, are identical. Further definition of manufacturer and Factory given in other enactments cannot be pressed into service, as argued by Revenue, when the same words have been defined in the Central Excise Act, 1944. Accordingly, we do not consider that a different view is required to be taken in the present proceedings.

4.2 So far as time barred nature of the demands is concerned learned Special Counsel argued that present appellants were not availing the benefit of Sr. No. 114 of Notification No. 6/2000-CE dated 01.3.2000 before amendment, as was the case in the relied upon case law of Garden Silk Mills (supra) and also that present appellants never disclosed to the Revenue that POY is procured from their sister concern. It was thus the case of the Revenue that extended period for raising demands under Section 11(A) of the Central Excise Act, 1944 is invokable. It is observed from the case records that there was a general practice in the trade to claim the benefit of Sr. No. 6 of table annexed to Notification No. 30/2004-CE. Appellants can not be said to have any malafide intention if the same benefit was availed by them which was also being availed by similarly placed manufacturers. Under the above factual matrix extended period for raising demands under Section 11A of the Central Excise Act, 1944 can not be invoked against the appellants.

5. Based on the above observations and the settled proposition of law, appeals filed by the appellants are allowed.

(Operative part of the order pronounced in the open Court)

(P.K. Das) (H.K. Thakur) Member (Judicial) Member (Technical) ..KL

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