Commissioner of Central Excise, Jamshedpur vs M/s. Tinplate Company of India Ltd. Jamshedpur <BR> M/s. Tinplate Company of India Ltd. Jamshedpur Vs Commissioner of Central Excise, Jamshedpur

Heard Learned Counsel for the parties. The appellant is aggrieved against the order dated 17.03.2010 passed in Excise Appeal No. 216 of 2006 by the Custom, Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata whereby the appeal of the assessee M/s. Tinplate Company of India Ltd: was allowed against the demand of Rs. 67,42,153/- and the order of penalty of equal amount was set aside; hence this appeal is against the deletion of the penalty of Rs. 67,42,153/-.

Brief facts of the case are that the respondent M/s. Tinplate Company India Ltd. was purchasing the HR sheets in coils from M/s. TISCO and was availing the cenvat credit in respect of the duty paid on said HR sheets. The HR Sheets in Coils were used for manufacturing of finished goods namely Tin Mill Black Plates, Full Hard Cold Rolled Coils and Electrolytic Tinplates. On sale of these articles, the requisite duty was paid and there is no dispute on this fact. However, during the process of manufacturing, according to assessee, certain inputs were found unfit for use in the manufacture of the finished goods. Such rejected inputs were cleared in the name of Pickled & Oiled HR Coils, to the consignment agent of M/s. TISCO and the credit was reversed at the prices which was lower than the price on which the credit was availed.

The contention of the assessee was that the reject was since sold at lower price, therefore, they were not liable to pay the duty at par with the cenvat benefit which they have availed. That contention was rejected on the ground that the rejects i.e., Pickled & Oiled HR Coils are not the new product as they are not subjected to manufacture. Therefore, the demand of Rs. 67,42153/- was found justified by the CESTAT.

However, so far as imposition of penalty is concerned, the CESTAT observed that the appellants were submitting statutory monthly return showing clearance of the impugned goods and, therefore, there is no merit in the contention of the Revenue that it is a case of suppression of facts with intent to evade payment of duty.

Learned Counsel for the appellant vehemently submitted that long back as back in the year 1996, the Hon''ble Supreme Court in Civil Appeal No. 1608 - 1611 of 1996 held that if such inputs are found fit for further process, continued to remain as inputs and not become waste or end scrap and hence, duty is payable on the rate of inputs as purchased. It is submitted that this legal position was known to the representative of the assessee.

The Tribunal was of the view that the assessee submitted the returns in time and this fact is clearly admitted by the Revenue not before the lower authority but before this Court also by submitting the copy of the statement submitted by the assessee.

Firstly, we are of the considered opinion that the CESTAT has not committed any error of fact or law in holding that the facts were in the knowledge of the Revenue and we found from the statement that the assessee specifically mentioned the name of the article as "Pickled & Oiled HR Coils" in the monthly returns. Therefore, the Tribunal was right in holding that the penalty could not have been imposed. Since the assessee continuously, in every statutory monthly return declared the goods and, therefore, the limitation would run from the relevant time and notice could have been issued only within a period of 12 months, therefore, beyond the period of 12 months, no demand could have been raised. Therefore, in this count also, the learned CESTAT was right in holding that appellants were filing statutory monthly returns showing clearance of the impugned goods, therefore, there is merit in the contention of the appellants that the allegation of suppression of facts with intent to evade payment of duty is not sustainable and the demand beyond the normal period of limitation is time barred and, therefore, rightly set aside the demand.

We do not find any merit in this Tax Appeal which is accordingly dismissed. In view of the above order, Learned Counsel for the assessee is not pressing the Cross Objection. Hence, CO. No. 6 of 2011 is also dismissed.