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Brindavan Chemicals and Minerals Vs. C.C.E. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1997)(89)ELT623Tri(Chennai)
AppellantBrindavan Chemicals and Minerals
RespondentC.C.E.
Excerpt:
.....act, 1985. they were receiving raw materials like lime stone, coke breeze and clay from m/s. nandi cements holders of licence l-4 no. 1/cement/86 situated in the same survey no. and premises and after converting the raw materials into clinkers on labour charges the same were returned to m/s. nandi cements. m/s. nandi cements are engaged in the manufacture of cement and are availing the exemption from payment of central excise duty under notification no. 175/86, dated 1-3-1986 (as amended). both the units are having separate ssi certificates and are registered separately under the company's act." 3. relying on the same he contended that it is admitted by the department itself that the appellant was receiving raw materials from m/s. nandi cements situated in the same survey number.....
Judgment:
1. The present appeal is directed against the Central Excise duty demand of Rs. 6,44,893.48 on 8956.854 MTs of Cement Clinker manufactured and removed by the appellants from 1986-87 to 1987-88. The main ground on which the appellant was not allowed the benefit of Notification No. 119/86-C.E., dated 1-3-1986 was that they have not followed the Chapter X procedure. A plea to this fact made before the adjudicating authority and it was held that appellant is not eligible for the said concession because the exemption from payment of duty is available only when used in the manufacture of clinker within the factory of production and if manufactured elsewhere they are not available unless the Chapter X procedure is followed.

2. In this connection the learned advocate for the appellants Shri G.Sampath drew our attention to [reference] made in the show cause notice. The first para in the show cause notice which he referred to us reads as follows :- "The Staff of Hqrs. Preventive Unit Central Excise, Bangalore during their visit to the factory premises of M/s. Brindavan Chemicals & Minerals Pvt. Ltd., Saundanahalli Village, C.N. Halli Taluk, Tumkur Dist. on 14-4-1987 found that the said factory is engaged in the manufacture and clearance of clinkers falling fin] Chapter sub-heading No. 2502.10 of Central Excise Tariff Act, 1985. They were receiving raw materials like lime stone, coke breeze and clay from M/s. Nandi Cements holders of licence L-4 No. 1/Cement/86 situated in the same survey No. and premises and after converting the raw materials into clinkers on labour charges the same were returned to M/s. Nandi Cements. M/s. Nandi Cements are engaged in the manufacture of cement and are availing the exemption from payment of Central Excise duty under Notification No. 175/86, dated 1-3-1986 (as amended). Both the units are having separate SSI certificates and are registered separately under the Company's Act." 3. Relying on the same he contended that it is admitted by the department itself that the appellant was receiving raw materials from M/s. Nandi Cements situated in the same survey number and in the same premises and after converting those raw materials on labour charges the same were returned to M/s. Nandi Cements. Therefore, he contended that this fact is within the knowledge of the department and in such circumstances the claim for the benefit of Notification No. 119/86 should have been given to the appellants.

4. We have heard the learned JDR for the department Shri Arulswamy who stated that the appellants have not complied with the Chapter X procedure and they are not entitled for the same.

5. The learned advocate Shri G. Sampath relied on the following decision to justify that mere fact that Chapter X is not followed is not sufficient to deny the benefit of Notification No. 119/86: 6. We have considered the submissions of both the sides. It is now very clear from allegations mentioned in the annexure to the show cause notice itself that the appellants are receiving raw materials like, lime stone, coke breeze and clay from M/s. Nandi Cements, holders of licence, and the same premise is situated in the same survey number and after converting the raw materials into clinkers they are sending the same to M/s. Nandi Cements. In that view of the matter, the appellants are entitled for the benefit of Notification No. 119/86. A mere procedural lapse in not following the Chapter X procedure is not sufficient to deny the benefit to the appellants as has been held in the abovesaid decisions which are relied by learned advocate.

7. In the present case from the allegations in the Show Cause Notice itself it is very clear the goods were received by the appellant and after the Job work is done they were sent back to M/s. Nandi Cements and what is required is verification in this regard. In that view of the matter we hold that the appellant is entitled for the benefit of Notification No. 119/86 subject to the verification by the department regarding the quantum returned. The appeal is accordingly allowed on the above terms. The penalty imposed on the appellants is also set asided .


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