Commissioner of Central Excise Vs. Neelkanth Polymers

Commissioner of Central Excise vs Neelkanth Polymers

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Nov 11, 2002

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Citation: sooperkanoon.com/29297
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: S Kang, a T V.K.
Decided On: Nov 11, 2002
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Neelkanth Polymers

Legal References

Reported In: (2003)(152)ELT154TriDel

Excerpt

.....of the schedule to the cen tral excise tariff act attracts nil rate of duty, the proviso to notification 8/97 is attracted which reads as under : "provided that nothing contained in this notification shall apply where such finished products, if manufactured and cleared by a unit other than a hundred per cent export-oriented undertaking or a unit in a free trade zone, are wholly exempt from the duties of excise or are chargeable to nil rate of duty." 3. on the other hand, shri o.p. agrawal, learned chartered accountant, submitted that guar seeds are grounded and screened in chhalnas'; that during screening, the waste material, which is locally known as "guar churi korma" is separated from the main product; that churi korma is nothing but waste and by no stretch of imagination, it can be called a finished product so as to fall within the mischief of the proviso to notification no. 8/97-c.e.; that department of industrial policy and promotion vide letter dated 28-10-97 has recognized churi korma as a waste.4. we have considered the submissions of both the sides. notification no. 8/97-c.e. exempts the finished products, rejects and waste or scrap produced in a 100% eou wholly from the raw materials produced or manufactured in india and allowed to be sold in india under and in accordance with the provisions of specified paras of the export and import policy 1997-2002 from so much of the duty of excise as is in excess of an amount equal to the aggregate of the duties of excise leviable under section 3 of the central excise act or under any other law for the time being in force on like goods produced in india. the proviso bars the benefit of notification in respect of finished goods if such finished goods manufactured by any unit other than 100% eou is wholly exempt or chargeable to nil rate of duty. the impugned product, as per the process of manufacture mentioned by the learned chartered accountant and not controverted by the revenue, is obtained by grinding and.....

Full Judgment

1. In this Appeal, filed by Revenue, issue involved is whether the benefit of exemption under Notification No. 8/97-C.E., dated 1-3-97 is available in respect of Churi Korma.

2. Shri Atul Dixit, learned SDR, submitted that M/s. Neelkanth Polymers, a hundred per cent Export Oriented Undertaking, manufacture 'Guar Gum Powder' from guar' seeds; that during the said process, a byproduct namely 'Churi Korma' is also obtained; that the Deputy Commissioner, under Adjudication Order No. 1/2001, dated 24-7-2001 denied the benefit of Notification No. 8/97-C.E. on the ground that Churi Korma, being a by-product is also a finished product which is being sold by the Respondents in the market and the proviso to Notification No. 8/97-C.E. is attracted; that the Commissioner (Appeals), however, under the impugned Order, set aside the Adjudication Order holding that the benefit of Notification would be available to the Respondents so long their finished product, i.e., Guar Gum Powder is not chargeable to Nil rate of duty and that rejects and waste or scrap would not be affected by the Proviso to Notification.

The learned SDR, further, submitted that Churi Korma, being a by-product is also a final product as the Respondents sell the same without any further processing; that as Churi Korma, falling under Heading 23.02 of the Schedule to the Cen tral Excise Tariff Act attracts Nil rate of duty, the proviso to Notification 8/97 is attracted which reads as under : "Provided that nothing contained in this Notification shall apply where such finished products, if manufactured and cleared by a unit other than a hundred per cent export-oriented undertaking or a unit in a free trade zone, are wholly exempt from the duties of excise or are chargeable to Nil rate of duty." 3. On the other hand, Shri O.P. Agrawal, learned Chartered Accountant, submitted that guar seeds are grounded and screened in Chhalnas'; that during screening, the waste material, which is locally known as "Guar Churi korma" is separated from the main product; that Churi Korma is nothing but waste and by no stretch of imagination, it can be called a finished product so as to fall within the mischief of the Proviso to Notification No. 8/97-C.E.; that Department of Industrial Policy and Promotion vide letter dated 28-10-97 has recognized Churi Korma as a waste.

4. We have considered the submissions of both the sides. Notification No. 8/97-C.E. exempts the finished products, rejects and waste or scrap produced in a 100% EOU wholly from the raw materials produced or manufactured in India and allowed to be sold in India under and in accordance with the provisions of specified Paras of the Export and Import Policy 1997-2002 from so much of the duty of excise as is in excess of an amount equal to the aggregate of the duties of excise leviable under Section 3 of the Central Excise Act or under any other law for the time being in force on like goods produced in India. The Proviso bars the benefit of Notification in respect of finished goods if such finished goods manufactured by any unit other than 100% EOU is wholly exempt or chargeable to Nil rate of duty. The impugned product, as per the process of manufacture mentioned by the learned Chartered Accountant and not controverted by the Revenue, is obtained by grinding and screening of guar gum seed. During the process of screening in Chhalnas i.e. sieve, waste material is separated. This waste material is sold as Churi Korma in the market. We agree with the Respondents that the impugned material is only a waste product and not a finished product. The mere fact that it is sold as such in the market without any further processing would not make the impugned product a finished product. It is well known fact that generally the waste products are sold as such only without any further processing. Further as held by the Apex Court in Union of India v. Indian Aluminium Co. Ltd. - 1995 (77) E.L.T. 268 (S.C.) even rubbish can be sold and everything which is sold is not necessarily a marketable commodity. Accordingly, the fact of selling of Churi Korma will not make it a finished product. Thus the mischief of Proviso to Notification No. 8/97-C.E., dated 1-3-97 is not attracted in respect of Churi Korma as it is a waste product and the proviso is applicable only to 'finished product'. Accordingly we find no reason to interfere with the impugned Order and reject the Appeal filed by the Revenue.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Commissioner of Central Excise vs Neelkanth Polymers Same Subject Land Acquisition Same Judge S Kang, a T V.K.