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F. No. V.69/15-338/Adj/2011 OIO 78 /Commr/2013 M/s Flora Ceramic Pvt Ltd

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lhek “kqYd ,oa dsUnzh; mRikn “kqYd vk;qDrky;] dsUnzh; mRikn Hkou] jsl dkslZ] fjax jksM jktdksV-360001 CENTRAL EXCISE & CUSTOMS COMMISSIONERATE

CENTRAL EXCISE BHAVAN : RACE COURSE RING ROAD RAJKOT 360 001

Phone – (0281) 2442030, 2441980, 2441982 Fax – (0281) 2443313, 2452967 Email: [email protected] Qk- la- F.No. V.69/15-338/Adj/2011

By RPAD/HAND DELIVERY

vkns”k dh rkjh[k Date of order

17.07.2013 ewy vkns”k la- ORDER IN ORIGINAL NO. 78/COMMR/2013

tkjh djus dh rkjh[k Date of Issue

18.07.2013

vkns”kdrkZ Ordered by

वी प नाभन vk;qDr

ds-m-“kq- vk;qDrky; jktdksV V. Padmanabhan Commissioner,

Customs & Central Excise, Rajkot.

ds lanHkZ esa In the case of

M/s. Flora Ceramic Private Limited, 8-A, National Highway, Lakhdhirpur Road, Morbi 363642

dkj.k crkvks la- ,oa frfFk Show Cause Notice No. & Date

V.69/AR-MORBI-DIV.II /32/ COMMR./2013 dated 26.02.2013

1. जस य (य ) को यह ित भेजी जाती है, उसे य गत योग के िलए िनःशु क दान क जाती है। This copy is granted free of charge for private use of the person(s) to whom it is sent. 2. इस आदेश से असंतु कोई भी य इस आदेश क ाि से तीन माह के भीतर सीमा शु क, उ पाद शु क एवं सेवाकर अपीलीय यायािधकरण, अहमदाबाद पीठ को इस आदेश के व अपील कर सकता है। अपील सहायक र ज ार, सीमा शु क,

उ पाद शु क एवं सेवाकर अपीलीय यायािधकरण,O-20, मेघाणीनगर, यु मे टल हॉ पीटल क पाउ ड, अहमदाबाद-380 016 को स बोिधत होनी चा हए। Any person deeming himself aggrieved by this Order may appeal against this Order to the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad Bench within three months from the date of its communication. The appeal must be addressed to the Assistant Registrar, Customs, Excise and Service Tax Appellate Tribunal, O-20, Meghani Nagar, Mental Hospital Compound, Ahmedabad-380 016. 3. उ अपील ा प सं. इ.ए.3 म दा खल क जानी चा हए। उसपर के य उ पद शु क (अपील) िनयमावली, 2001 के िनयम 3 के उप िनयम (2) म विन द य य ारा ह ता र कए जाएंगे। उ अपील को चार ितय म दा खल कया जाए तथा जस आदेश के व अपील क गई हो, उसक भी उतनी ह ितयाँ


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संल न क जाएँ (उनम से कम से कम एक ित मा णत होनी चा हए)। अपील से स बंिधत सभी द तावेज भी चार ितय म अ े षत कए जाने चा हए।

The Appeal should be filed in form No. E.A.3. It shall be signed by the persons specified in sub-rule (2) of Rule 3 of the Central Excise (Appeals) Rules, 2001. It shall be filed in quadruplicate and shall be accompanied by an equal number of copies of the order appealed against (one of which at least shall be certified copy). All supporting documents of the appeal should be forwarded in quadruplicate.

4. अपील जसम त य का ववरण एवं अपील के आधार शािमल ह, चार ितय म दा खल क जाएगी तथा उसके साथ जस आदेश के व अपील क गई हो, उसक भी उतनी ह ितयाँ संलगन क जाएंगी (उनम से कम से कम एक मा णत ित होगी)।

The Appeal including the statement of facts and the grounds of appeal shall be filed in quadruplicate and shall be accompanied by an equal number of copies of the order appealed against (one of which at least shall be a certified copy.) 5. अपील का प अं ेजी अथवा ह द म होगा एवं इसे सं एवं कसी तक अथवा ववरण के बना अपील के कारण के प शीष के अंतगत तैयार करना चा हए एवं ऐसे कारण को मानुसार मां कत करना चा हए। The form of appeal shall be in English or Hindi and should be set forth concisely and under distinct heads of the grounds of appeals without any argument or narrative and such grounds should be numbered consecutively. 6. अिधिनयम क धारा 35 बी के उपब ध के अंतगत िनधा रत फ स जस थान पर पीठ थत है, वहां के कसी भी रा ीयकृत बक क शाखा से यायािधकरण क पीठ के सहायक र ज ार के नाम पर रेखां कत माँग ा ट के

ज रए अदा क जाएगी तथा यह माँग ा ट अपील के प के साथ संल न कया जाएगा। The prescribed fee under the provisions of Section 35 B of the Act shall be paid through a crossed demand draft, in favour of the Assistant Registrar of the Bench of the Tribunal, of a branch of any Nationalized Bank located at the place where the Bench is situated and the demand draft shall be attached to the form of appeal. 7. यायालय शु क अिधिनयम, 1970 क अनुसूची-1, मद 6 के अंतगत िनधा रत कए अनुसार संल न कए गए आदेश क ित पर 5.00 पया का यायालय शु क टकट लगा होना चा हए। The copy of this order attached therein should bear a court fee stamp of Re. 1.00 as prescribed under Schedule 1, Item 6 of the Court Fees Act, 1970. 8. अपील पर भी . 5.00 का यायालय शु क टकट लगा होना चा हए। Appeal should also bear a court fee stamp of Rs. 5.00.


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Brief facts of the case:

M/s. Flora Ceramic Private Limited, 8-A, National Highway,

Lakhdhirpur Road, Morbi 363642 (hereinafter referred to as Noticee)

registered as manufacturer of various excisable goods falling under

the First Schedule to the Central Excise Tariff Act, 1985, vide

Registration No: AABFF6275FXM001, are availing the benefit of

Cenvat credit on the inputs and input services used by them as per

provisions of the Cenvat Credit Rules, 2004, to be used in or in

relation with the manufacture of their various final products.

2.1 During the course of Audit under EA-2000, under taken by the

Officers of Internal Audit Department, Hq. Rajkot on 23.12.2010, it

was noticed that Noticee had earned an income on account of sale of

Body Clay Powder. It was further revealed that the said material i.e.

Body Clay Powder emerged as an intermediate product during the

course of manufacture of their finished goods i.e. ceramic glaze tiles;

that the Body Clay Powder appears classifiable under Chapter Sub-

Heading No. 2530 90 99 of First Schedule to the Central Excise Tariff

Act, 1985 which attracts NIL rate of duty; that during the course of

manufacture of Body Clay Powder, the Noticee has availed Cenvat

credit on the inputs viz. Sodium Silicate, Soda Ash, etc. and has also

availed Cenvat credit of Service Tax paid on the inputs services viz.

Insurance and Goods Transport Agency Services used by them for

procurement of various raw materials viz. various types of clay,

Wallasonite, Dolomite powder, Feldspar powder, Talc powder, etc.;

that as per definition of exempted goods given in Rule 2(d) of the

Cenvat Credit Rules, 2004, the goods chargeable at NIL rate of duty

are to be considered as exempted goods.

2.2 The Noticee at the time of audit did not agree with the

departmental contention of reversal of an amount @ 5% / 10% of the

value of exempted goods. However they paid proportionate Cenvat

credit on inputs amounting to Rs. 2,29,494/- along with interest of

Rs. 21,815/- and Service Tax on input services. They also paid an

amount of Rs.4,87,521/- plus interest of Rs.99,500/- vide common

Challan No: 00010 dated: 12.05.2011.

3. The Superintendent of Central Excise, A. R. Morbi conducted a

survey in the backdrop of the facts that instances had come to the


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notice of the department that certain manufacturers of the Ceramic

Glazed Tiles were also engaged in the production of Body Clay Powder

classifiable under Chapter Sub-Heading No: 2530 90 99 of First

schedule to Central Excise Tariff Act, 1985 and were clearing the

same for home consumption. However the details of the said

production and clearance were not made available to the department

in their various statutory returns. As a part of survey, the

Superintendent of Central Excise, A. R. Morbi vide his letter dated

04.01.2011 requested the Noticee to confirm whether they are

engaged in production and sales for home consumption of Body Clay

Powder, whether they have availed Cenvat Credit on the inputs and

input services used in the manufacture of Body Clay Powder and if so

whether they have maintained separate account as stipulated under

Rule 6(2) of the Cenvat Credit Rules, 2004 or have filed option as per

Rule 6(3A) of the Cenvat Credit Rules, 2004. The Noticee was also

further requested to provide the details of the clearance effected from

2005-2006 to 2010-2011.

4. It appeared that body clay powder is prepared by mixing of

various types of clays and minerals in ball mill i.e. various

clays/minerals like ball clay, feldspar, quartz, kaolin, bentonite,

dolomite, talc powder, lime stone and wallastonite, etc; that these raw

materials are mixed with water in ball mill to form slurry/paste and

which is dried and then passed on to spray dryer. Thus, Ceramic

Body Clay Powder which is in powder granule form, can more or less

be described as a dried mixture of various materials used. Further two

additional items – STPP and Sodium Silicate are used in very small

quantities.

5.1 As per Note 1 of the Chapter 25 of Schedule to Central Excise

Tariff Act, 1985, which falls under Section V, Mineral Products

include Salt; Sulphur; earths and stone; plastering materials, lime

and cement and clearly covers the product which is:

(i) in crude state

(ii) has been washed

(iii) crushed and powdered

The body clay powder is a mixture of various types of clays and

minerals in ball mill, which are mixed with water to form slurry/paste


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and on being dried and passed to spray dryer, becomes Ceramic Body

Clay Powder, in powder granule form. Further two additional items –

STPP and Sodium Silicate are used in a very small percentage. The

said body clay powder appears appropriately classifiable under

Chapter 25 of first schedule to the Central Excise Tariff Act, 1985.

5.2 As per Note 4 of Chapter 25 of first schedule to Central Excise

Tariff Act, 1985, Heading No: 2530 covers the products which are

earth materials, whether or not calcined or mixed together. The body

clay powder is appropriately classifiable under Tariff Heading No:

2530 90 99 of the first schedule to Central Excise Tariff Act, 1985,

since, consequent to addition of two additional items – STPP and

Sodium Silicate and entire new product comes into existence.

Therefore it cannot be said that the inputs as such have been

removed. The inputs have been mixed to form the new product.

6. It further appeared that the Noticee are engaged in manufacture

and clearance of Body Clay Powder which emerges as an intermediate

product during the course of manufacture of their finished goods i.e.

ceramic glaze tiles; that some quantity of Body Clay Powder was

cleared for domestic consumption; that the Body Clay powder is

classifiable under Chapter Sub-Heading No: 2530 90 99 of First

schedule to Central Excise Tariff Act, 1985 and attracts NIL rate of

duty; that as per definition of exempted goods given at Rule 2(d) of

Cenvat Credit Rules, 2004, the goods chargeable to NIL rate of duty

are to be considered as exempted goods; that during the course of

manufacture of the Body Clay Powder, the Noticee has availed Cenvat

credit on the inputs viz. Sodium Silicate, Soda Ash, etc. and have also

availed Cenvat credit of Service Tax paid on the inputs services viz.

Insurance and Goods Transport Agency Services used by them for

procurement of various principle raw materials viz. various types of

clay, Wallasonite, Dolomite powder, Feldspar powder, Talc powder,

etc.

7. As per Rule 6(1) of Cenvat Credit Rules, 2004, CENVAT credit

shall not be allowed on such quantity of inputs and input services

used in or in relation to the manufacture of exempted goods except in

the circumstances mentioned in sub-rule (2) of Rule 6 of Cenvat

Credit Rules, 2004 which places onus on the manufacturer, who

avails CENVAT credit in respect of any inputs or input services and


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manufactures such final products which are chargeable to duty or tax

as well as exempted goods to maintain separate account. However,

the Noticee has not maintained separate account which is in violation

of the provisions of Rule 6(1) of Cenvat Credit Rules, 2004 and Rule

6(2) of Cenvat Credit Rules, 2004. They have also not exercised the

option under Rule 6(3A) of Cenvat Credit Rules, 2004 at the relevant

time. Therefore, as per provisions of Rule 6(3) (i) of Cenvat Credit

Rules, 2004 the Noticee are under an obligation to pay an amount

equivalent to 5% of the value of the exempted goods cleared after

07.07.2009 and 10% of the value of the exempted goods cleared prior

to 07.07.2009. It appeared that Noticee vide their letter dated

12.05.2011 themselves had reported that they had reversed the

amount to the extent of cenvat credit attributable to the proportionate

quantity of input/ input services used in production of Body Clay

powder along with interest till date. Since they have not exercised the

option available to them under Rule 6(3A) of Cenvat Credit Rules,

2004 at the relevant time, the said act of the noticee appeared not to

be in accordance with the provisions of Cenvat Credit Rules, 2004.

Thus, it appeared that since the Noticee have not paid the amount in

terms of Rule 6(3) (i) of Cenvat Credit Rules, 2004, therefore, the same

is liable to be recovered under Rule 14 of the Cenvat Credit Rules,

2004.

8. The said Body Clay Powder was removed without payment of

the amount at the rates prescribed in Rule 6 (3)(i) of Cenvat Credit

Rules, 2004 as required as per Explanation-II of Rule 6 of Cenvat

Credit Rules, 2004 as it stood prior to 31.03.2011. Further, the fact of

emergence of the said body clay powder at the intermediate stage, its

sale by them without proper cover of valid Central Excise invoice,

availment of Cenvat credit on the inputs and input services used in or

in relation with manufacture of the said body clay powder, non

maintenance of separate records as per Rule 6(2) of Cenvat Credit

Rules, 2004 are in violation of Cenvat Credit Rules, 2004. This fact

came on records only when the audit and survey was conducted. Therefore, it appeared that the Noticee had deliberately suppressed

the material facts from the department with an intention to avoid

payment of an amount under rule 6 (3) of Cenvat Credit Rules, 2004

as amended. Hence, it appeared that this is a fit case for invoking the

extended period of five years under proviso to section 11A of the

Central excise Act, 1944 to recover the amount. It also appeared that


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by acting in the manner as aforesaid the said noticee has also

rendered themselves liable to penalty under rule 15 of Cenvat Credit

Rules, 2004 read with section 11AC of the Central excise Act, 1944.

9. Thus, the Noticee was called upon to Show Cause as to why:

(i) the said body clay powder should not be appropriately

classified under Tariff Item No: 2530 90 99 of first

schedule to the Central Excise Tariff Act, 1985;

(ii) The amount of Rs. 57,44,975/- (Basic Excise Duty: Rs.

55,77,647/- + 2% Education Cess: Rs. 1,11,552/- + 1%

Sec and Higher Secondary Edu. Cess: Rs. 55,776/-), as

calculated in Annexure “B” of the Show Cause Notice,

recoverable as per sub-rule 3 of rule 6 of the Cenvat

Credit Rules, 2004 should not be recovered from them

under rule 14 of the Cenvat Credit Rules, 2004 read with

proviso to Section 11A of Central Excise Act, 1944, by

invoking the extended period of limitation, alongwith

interest under Section 11AA (erstwhile section 11AB) ibid;

(iii) An amount of Rs. 7,17,014/- and Rs. 1,21,316/- paid

towards interest vide Challan No: 00010 dated:

12.05.2011 should not be appropriated/adjusted against

the demands proposed at (ii) above; and

(iv) Penalty under rule 15 of the Cenvat Credit rules, 2004

read with Section 11AC of the Central Excise Act, 1944

should not be imposed upon them.

DEFENCE AND SUBMISSION : 10. The Noticee vide letter dated 08.05.2013 submitted their

reply and stated that the issue revolves around classification of body

clay powder and applicability of provisions of rule 6 of CCR, 2004;

that if Body Clay Powder merits classifiable under tariff sub-heading

2530 90 99 which attracts NIL rate of duty, then the provisions of

Rule 6 of CCR, 2004 will come into the picture or otherwise; that


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they do not agree that body clay powder is falling under CETH

25309099; that the Notes contained in Chapter clearly define that:

'1. Except where their context or Note 4 to this Chapter

otherwise requires, the headings of this Chapter cover only

products which are in the crude state or which have been

washed (even with chemical substances eliminating the

impurities without changing the structure of the product),

crushed, ground, powdered, levigated, sifted, screened,

concentrated by flotation, magnetic separation or other

mechanical or physical processes (except crystallization), but not

products that have been roasted, calcined, obtained by mixing or

subjected to processing beyond that mentioned in each heading.

The products of this Chapter may contain an added anti-

dusting agent, provided that such addition does not render the

product particularly suitable for specific use rather than for

general use.'

Note 4 of Chapter 25 reads as under:

'4. Heading 2530 applies, inter alia, to: vermiculite, perlite and

chlorites, unexpanded; earth colours, whether or not calcined or

mixed together; natural micaceous iron oxides; meerschaum

(whether or not polished pieces); amber; agglomerated

meerschaum and agglomerated amber, in plates, rods, sticks or

similar forms, not worked after moulding; jet; strontiantie

(whether or not calcined), other than strontium oxide; broken

pieces pottery, brick or concrete’

The above clarifactory notes imply that body clay powder does

not fall under CETH 2530 90 99. The said product is not in crude

form nor it is falling under other criteria listed in Note 1 of the

Chapter notes. It is rather a product that has been roasted, calcined,

obtained by mixing or subjected to processing beyond that

mentioned in each heading. They, therefore, strongly believe that

the product 'Body Clay Powder is not excisable product as it is not

falling either under CETH 2530 90 99 or in any of the other heading

of the Central Excise Tariff Act, 1985. Accordingly, 'Body Clay Powder

may not be classified under CETH 25309099, as proposed in the


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notice and, this also proves that it is not ‘excisable goods’ and hence

cannot be termed as ‘exempted goods’.

11. They submitted that preparation of 'Body Clay Powder’ by

any means does not amount to manufacture within the meaning of

Section 2(f) of the Central Excise Act, 1944. Body clay powder is one

of the input materials and it is mainly prepared from natural clay,

Rajasthani clay, local red clay etc. As such, body clay powder is

mainly containing natural clay and it may please be appreciated

that mixture of different clays does not form a new excisable

product. The final product still remains clay. It is well settled law that

if the character of material does not change by mixture and if a new

product is not emerged, such a process would not change tariff

heading of the product and may not be considered as 'manufacture’

within the definition envisaged under Central Excise Act, 1944. To levy

Central Excise duty, it is necessary that a new article should come

into existence as a result of manufacturing activity; unless there is a

finding of manufacture, excise duty is not attracted. The activity or

process in order to amount to "manufacture" must lead to emergence

of new commercial product, different from the one with which the

process started. In other words, it should be an article with different

name, character and use. Thus, a process which simply changes the

form or size of the same article or substance would not ordinarily

amount to manufacture and no excise duty would be payable unless

in a particular case by Section Note or Chapter Note of the Tariff or

by wording of the relevant heading or subheading the said process

has been specified as amounting to manufacture. They relied upon

the following cases of Hon'ble Supreme Court who also held the

same.

• Hawkins Cooker Ltd. V. Collector - 1997 (96) ELT 507 (SC)

• Delhi Cloth and General Mill Co. Ltd. V. UOI - 1977 (1) ELT (J.199) (SC)

• UOI V. Parle Products Ltd. - 1994 (74) ELT 492 (SC)

• Ujagar Prints V. UOI - 1988 (38) ELT 535 (SC)

They also relied upon the following case laws of Hon'ble Tribunal:

(i) COLLECTOR OF C. EX., PATNA Versus WAXPOL INDUSTRIES LTD-1996(85) ELT 132(T)


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Manufacture - Grinding of calcined bauxite and calcined

china day does not amount to manufacture as mere change

in form is not sufficient to hold an article to be a new

commercial commodity - Section 2(f) of Central Excises and

Salt Act, 1944 - Chapter 26 of Central Excise Tariff, [para 7}

Calcined bauxite powder and calcined china clay powder

obtained by the process of grinding the calcined bauxite and

calcined china clay respectively not liable to duty as no

process of manufacture involved in changing the physical

form of an article by grinding - Section 2(f) of Central Excises

and Salt Act, 1944 - Chapter 26 of Central Excise Tariff, [para

7]

(ii) WOLKEM INDIA LIMITED Versus COLLECTOR OF CENTRAL EXCISE, JAIPUR-1997 (92) E.L.T. 219 (Tribunal) [maintained by Hon'ble Supreme Court - 1998 (102) E.L.T. A224 (S.C)]

Manufacture - Mere powdering of lumps not amounts to

manufacture as no new commodity having come into existence

~ Section 2(f) of Central Excise Act, 1944.

- Undisputedly, the minerals are obtained by mining

operations in the form of lumps and all that is done is to crush

them into powder. The appellant has shown with the help of

the test report and affidavit also that the material remains

the same before and after grinding or crushing and its

character, composition and use remains basically the same. In

other words, no new commodity had come into existence.

[1996 (85) E.L.T. 132 (Tribunal) relied on], [paras 16, 18]

Thus, preparation of Body Clay Powder does not amount to

manufacture within the meaning of Section 2(f) of the Central Excise

Act, 1944. Therefore, it is not excisable goods.

12. As per the provisions of Rule 6 of CCR, 2004, following

are the prerequisites that-

(i) No CENVAT credit of input and input service is allowed which

is used in the manufacture of exempted goods except in the

circumstances mentioned in sub-rule (2).


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(ii) If manufacturer avails of CENVAT Credit in respect of inputs

and input services used in manufactures of final products

chargeable to duty as well as exempted goods have to

maintain separate accounts and take CENVAT Credit only on

that quantity of input and input service which is intended for

use in the manufacture of dutiable goods.

(iii) The manufacturer of exempted goods shall pay an amount

equal to ten per cent /five percent (as applicable for the

relevant period) of the total price charged by the manufacturer

excluding sales tax and other taxes.

In the instant case, for the purpose of applicability of Rule 6,

it is required to be examined whether two mischief’s of said rule viz.

"manufacture" and "exempted goods" are existing or otherwise. In

other words, it has to be checked whether emergence of "Body Clay

Powder" was result of manufacture? Whether "Body Clay Powder"

can be considered as exempted goods? The said two words viz.

"manufacture" and "exempted goods" are defined under Section 2(f)

of the Central Excise Act, 1944 and under Rule 2(d) of the CCR, 2004

respectively. It may be seen that 'Body Clay Powder' does not fall

under both the definitions. Thus, it can be summarized that sub-

rule (3) of Rule 6 applies when common inputs are used by a

manufacturer in the manufacture of dutiable goods as also in the

manufacture of exempted goods. For applicability of Rule 6(3), it is

essential that the exempted goods referred to in the rule must arise

from 'manufacture’ as defined in the Central Excise Act. To put it

differently, even if a manufacturer produces 'exempted' goods or Nil-

rated goods but the process of production does not satisfy the test of

'manufacture', it cannot be said that the provisions of Rule 6(3) are

attracted. They also submit that even if any goods are specified as

excisable goods in the Schedule to the Central Excise Tariff Act, the

duty does not get attracted unless the goods arise as a result of

'manufacture'.

13. They submitted that provisions of Rule 6 of CCR, 2004 are

applicable to manufacturer who is engaged in manufacture of

excisable goods chargeable to duty as well as exempted goods and

not to manufacturer engaged in manufacture of excisable goods

chargeable to duty as well as non excisable goods. Since they are

engaged in manufacture of dutiable and non excisable goods,


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provisions of Rule 6 are not applicable to them. They relied upon the

following decisions of Hon'ble Tribunal.

(i) UP STATE SUGAR CORPORATION LTD. Versus COMMISSIONER OF C. EX., MEERUT - 2000 (120) E.L.T. 454 (Tribunal)

(ii) COMMISSIONER OF C. EX., LUCKNOW Versus KESAR ENTERPRISES LTD. - 2001 (130) E.L.T. 93 (Tri. - Del.)

(iii) TATA IRON & STEEL CO. LTD Versus COMMISSIONER OF C. EX., MUMBAI-V 2007 (209) E.L.T. 392 (Tri. - Mumbai)

(iv) GANGA RASAYANIE Versus COMMISSIONER OF CENTRAL EXCISE, 2002 (147) E.L.T. 186 (T) Para 6.

14. They submitted that body clay powder is mainly

containing natural clay and other ingredients were in very

negligible quantity and mixture of different clays does not form

a new excisable product and the final product still remained

clay. It is well settled law that if the character of material does

not change by mixture and if a new product is not emerged,

such a process would not change tariff heading of the product.

In such a situation, even if it is considered that body clay

powder was removed as such, provisions contained in sub rule

(5) of Rule 3 of the CCR, 2004 are attracted as it was removal

of input as such and not a different product. According to the

provisions of Rule 3(5) ibid, they were required to pay amount

equal to the credit availed in respect of

such inputs. Accordingly, they worked out proportionate credit

availed on such inputs (i.e. soda ash & sodium silicate)

contained in body clay powder removed as such amounting to

Rs.2,29,494/- + interest of Rs.21,815/- under Challan No.

00010 vide e-payment receipt dated 12.05.2011.

15. As regards input services (GTA), they submitted that Rule

3(5) of the CCR, 2004 does not require reversal/ payment of

Cenvat credit of Service tax on GTA service used for

procurements of inputs. There are number of judicial

pronouncements holding that the law does not prescribe

reversal of Cenvat credit of input services (Service tax)

used for such inputs. However, to avoid undue litigation,


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they worked out proportionate use of input services i.e. GTA

in body clay powder for the period from 2007-08 to 2010-11 which

was removed as such amounting to Rs.4,87,521/- plus interest

of Rs. 99,500/- and paid under Challan No. 00010 dated 12.05.2011.

They further submitted that reversal/payment of proportionate

Cenvat credit amounts to non-availment of Cenvat credit in view of

the following decisions.

(i) CHANDRAPUR MAGNET WIRES (P) LTD. Versus COLLECTOR OF C. EXCISE, NAGPUR-1996 (81) E.L.T. 3 (S.C.)

(ii) HELLO MINERALS WATER (P) LTD. Versus UNION OF INDIA, 2004 (174) E.L.T. 422(All.)

(iii)COMMISSIONER OF CENTRAL EXCISE Versus ASHIMA DYECOT LTD. 2008 (12) S.T.R. 701 (Guj.)

16. Without admitting anything, they submitted that

government to overcome from the above situation had amended

retrospectively provisions of erstwhile Central Excise Rules, 1944,

CENVAT Credit Rules, 2001, CENVAT Credit Rules, 2002 and present

CCR, 2004 with effect from 01.09.1996. In the instant case Section 73

read with 8th Schedule of the Finance Act, 2010 amending Rule 6 of

CCR, 2004 is relevant and accordingly they had paid an amount

equal to CENVAT Credit attributable to 'Body Clay Powder' and no

further amount is required to be paid. They referred to the judgment

in the case of BURN STANDARD CO. LTD. Versus COMMISSIONER

OF CENTRAL EXCISE, SALEM, 2010 (262) E.L.T. 786 (Tri. -

Chennai), wherein Hon'ble Tribunal held that when the credit

attributable to 'exempted' goods had been reversed by an assessee,

there is no liability to pay the amount specified in rule 6(3) of the

CCR, 2004 and that the amendments made by the Finance Act 2010

were actually to clarify what was always intended and therefore

retrospective in nature. They also relied upon the judgment in the case

of COMMISSIONER OF C. EX., MANGALORE Versus KUDREMUKH

IRON & STEEL CO. LTD., 2011 (271) E.L.T. 172 (Kar.).

17. Without admitting anything, they submitted that even if it is

considered that they are required to pay an amount as per the

provisions of Rule 6(3) of CCR, 2004 then also it may be seen that the

specified rate for calculation of amount to be paid under Rule 6(3) of

CCR, 2004 was changed from 10% to 5% of the value of exempted

goods/exempted service w.e.f. 07.07.2009. However, while


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demanding the said amount in the impugned show cause notice,

rate of 10% on the value of 'body clay powder' sold after 07.07.2009

and upto 31.07.2009 has been applied, which requires correction. It

is on record that in the month of July 2009, out of five bills issued in

that month, four bills for an amount of Rs.18,11,603/- were issued

after 07.07.2009 and accordingly the demand ought to have been

reduced by Rs.90,580/-. Similarly, demand of Education cess and

Secondary and Higher Education cess on the amount of 5% and

10% is beyond the provisions of said rule. Thus, addition of amount

of Rs.1,11,552/- (2% Education Cess) and Rs.55,776/- (1%

Secondary and Higher Education Cess) in demand is totally wrong

and as such there is an excess demand of Rs.1,67,328/-.

18. The Noticee submitted that they have been clearing "Body Clay

Powder" for home consumption and for captive consumption since

April, 2008. The fact that they were availing credit in respect of

input services was on record as the details were submitted through

periodical returns and the department was aware of these facts. In

this eventuality, they cannot be held guilty of suppression of facts.

Therefore, demand beyond normal period is time barred.

19. The Noticee submitted that the question arises whether

payment of an amount contemplated in rule 6(3) of the CCR, 2004

or under similar rule in the predecessor rule was called for when

the credit attributable to the inputs services has already been

reversed. In the wake of different interpretations, the Government

amended the relevant rules with retrospective effect by the Finance

Act 2010. They submitted that when the law was not settled and in

several cases the Hon'ble Tribunal and High Courts had held that no

amount as contemplated in rule 6(3) of the Cenvat Credit Rules or

similar earlier rule was payable, there cannot be any deliberate

attempt to evade payment of duty and as such the longer period of

limitation cannot be invoked. The decision of the Larger Bench of the

Hon'ble Tribunal in the case of Nicholas Piramal (I) Ltd. Vs

Commissioner of Central Excise, Thane-I — reported in 2008 (232)

ELT refers to the differing views on the subject. This decision was

delivered on 12.8.2008 and was reversed by the Bombay High Court

vide CC v. Nicholas Piramal India Ltd., 2009 (244) E.L.T. 321 (Bom). It

is well settled that in such circumstances it cannot be justified that

an assessee indulged in suppression of facts. In the case of


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Pushpam Pharmaceuticals Company reported in 1995 (78) ELT 401

(SC), the Supreme Court has held:

4. Section 11A empowers the Department to re-open proceedings if

the levy has been short-levied or not levied within six months from

the relevant date. But the proviso carves out an exception and

permits the authority to exercise this power within five years from

the relevant date in the circumstances mentioned in the proviso, one

of it being suppression of facts. The meaning of the word both in law

and even otherwise is well known. In normal understanding it is

not different that what is explained in various dictionaries unless

of course the context in which it has been used indicates otherwise,

A perusal of the proviso indicates that it has been used in company

of such strong words as fraud, collusion or wilful default. In fact it

is the mildest expression used in the proviso. Yet the

surroundings in which it has been used it has to be construed

strictly, It does not mean any omission. The act must be deliberate. In

taxation, it can have only one meaning that the correct information

was not disclosed deliberately to escape from payment of duty.

Where facts are known to both the parties the omission by one to do

what he might have done and not that he must have done, docs not

render it suppression.

In CCE Raigad Vs. Echjay Forging Pvt Ltd. reported in 2011-TIOL-

1413-CESTAT-Mum, the Hon'ble Tribunal has held that extended

period of limitation cannot be upheld when there were differing

opinions on interpretation. As such, extended period is not available

for demand of the said amount.

20. Since Tariff Rate on Body Clay Powder claimed to be

classifiable under 2530 90 99 attracts "nil" rate of excise duty as

claimed by the notice, they are not liable to pay any amount under

Rule 14 read with Section 11A or any amount under Rule 6(3) of CCR,

2004 on clearance of 'Body Clay Powder. Therefore, question of recovery

of interest does not arise. In the same way, they are also not liable to

penalty under Rule 15 of CCR, 2004 read with Section 11 AC of the

Central Excise Act, 1944.


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21. Personal Hearing in the matter was held on 10.07.2013,

wherein Shri R.C. Prasad, authorized representative of the noticee

appeared and reiterated the submissions made by them in their letter

dated 08.05.2013. Shri Prasad also submitted copy of the following

citations:

(i) Union of India Vs. Delhi Cloth and General Mills Co. Ltd. – 1997 (1) E.L.T. (J 199) (S.C.),

(ii) Commissioner of C. Ex., Lucknow Vs. Kesar Enterprises Ltd.-

2001 (130) E.L.T. 93 (Tri.-Del.) (iii) UP State Sugar Corporation Ltd. Vs. Commissioner of C.Ex.,

Meerut- 2000 (120) E.L.T.454(Tribunal) (iv) Wolkem India Limited Vs. Collector of Central Excise,Jaipur-1997

(92) E.L.T. 219(Tribunal)

DISCUSSION AND FINDINGS:

22. I have carefully gone through the facts of the case and the show

cause notice under adjudication. I have also considered the written

and oral submissions advanced by the Noticee in reply to the show

cause notice as well as at the time of personal hearing.

23. The limited issue under consideration in the present show

cause notice is as to whether:-

(i) the said ‘body clay powder’ can be appropriately classified

under Tariff Item No: 25309099 of first schedule to the

Central Excise Tariff Act, 1985;

(ii) the amount of Rs.57,44,975/- (Basic Excise Duty: Rs.

55,77,647/- + 2% Education Cess : Rs. 1,11,552/- + 1%

Sec and Higher Edu. Cess: Rs. 55,776/-) can be

recoverable under sub Rule(3) of Rule 6 of the Cenvat

Credit Rules, read with Rule 14 of the Cenvat Credit

Rules, 2004 and Section 11A of Central Excise Act, 1944

by invoking the provisions of extended period along with

interest under Section 11AA (erstwhile Section 11AB) ibid;

(iii) penalty under Rule 15 of the Cenvat Credit Rules, 2004

read with Section 11AC of Central Excise Act, 1944 can

be imposed upon them.

24.1 The Noticee has argued that as per Notes 1 & 4 to Chapter 25,

'Body Clay Powder’ will not be classifiable under CETH 2530 90 99


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and is not an excisable product; that preparation of 'Body Clay

Powder’ by any means does not amount to manufacture within the

meaning of Section 2(f) of the Central Excise Act, 1944. They relied

upon the decisions in the case of (i) Hawkins Cooker Ltd. Vs.

Collector - 1997 (96) ELT 507 (SC), (ii) Delhi Cloth and General Mill Co.

Ltd. Vs. UOI - 1977 (1) ELT (J.199) (SC), (iii) UOI Vs. Parle Products Ltd.

- 1994 (74) ELT 492 (SC), (iv) Ujagar Prints Vs. UOI - 1988 (38) ELT 535

(SC), (v) Collector of C. Ex., Patna Vs. Waxpol Industries Ltd.-

1996(85) ELT 132(T) and Wolkem India Limited Vs. Collector of

Central Excise, Jaipur-1997 (92) E.L.T. 219 (Tribunal) [maintained by

Hon'ble Supreme Court - 1998 (102) E.L.T. A224 (S.C)].

24.2 I find that body clay powder is prepared by mixing of various

types of clays and minerals i.e. various clays/minerals like ball clay,

feldspar, quartz, kaolin, bentonite, dolomite, talc powder, lime stone

and wallasonite etc. These raw materials are mixed with water in ball

mill to form slurry/paste. After drying slurry/paste, it is passed to

spray dryer where dried mixture of various clays/minerals i.e.

Ceramic Body Clay Powder is formed. Further two additional items –

STPP (Sodium Tripolyphosphate) and Sodium Silicate are also used in

the mixture, on which the Noticee has availed Cenvat credit. The new

emerged product is a well known product called ‘body clay powder’ in

the manufacturing sector of Ceramic tiles and a number of units are

manufacturing it independently and selling it to Ceramic tile units.

The product is not simply a mixture of different clays but after under

going a number of processes, it has got characteristics of a

marketable product. In fact, the Noticee is earning income on account

of sale of Body Clay powder to its customers. I rely on the decision in

the case of Commissioner of Central Excise, Jaipur Versus

Hindustan Zinc Ltd.- 2004 (166) E.L.T. 145 (S.C.) wherein the Hon’ble

Apex Court held that “so long as a new and distinct commodity known

in the market has come into existence there is manufacture.” The

Hon’ble Supreme Court in the case of Moti Laminates Pvt. Ltd.

Versus Collector of Central Excise, Ahmedabad - 1995 (76) E.L.T. 241

(S.C.) held as under.

“7. The duty of excise being on production and manufacture

which means bringing out a new commodity, it is implicit that

such goods must be useable, moveable, saleable and marketable.

The duty is on manufacture or production but the production or


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manufacture is carried on for taking such goods to the market for

sale. The obvious rationale for levying excise duty linking it with

production or manufacture is that the goods so produced must be

a distinct commodity known as such in common parlance or to the

commercial community for purposes of buying and selling.”

I find that the impugned goods viz, ‘Body Clay Powder’ is well known

in trade parlance as a distinct commercial commodity and is being

sold and purchased in the market.

24.3. I find that Note 1 to Chapter 25 of Schedule to Central Excise

Tariff Act, 1985, which falls under Section V – Mineral Products,

includes Salt; Sulphur; earths and stone; plastering materials, lime

and cement, clearly covers the product that:

(i) is in crude state

(ii) has been washed

(iii) crushed and powdered

Further, Note 4 to Chapter 25 of first schedule to Central Excise Tariff

Act, 1985, clearly stipulates that Heading No: 2530 covers the

products which are earth materials, whether or not calcined or mixed

together. As body clay powder is prepared by mixing various

clays/minerals and also containing two Cenvatable inputs - STPP and

Sodium Silicate, I am of the opinion that the said body clay powder

has emerged as an excisable goods appropriately classifiable under

Chapter Sub-Heading No: 25309099 of first schedule to Central

Excise Tariff Act, 1985. I also find that various case laws cited by the

noticee as mentioned in para supra with regard to manufacturing do not

embrace any aspect of the present case.

25.1 The Noticee has contended that since 'Body Clay Powder' does

not fall under the definitions of Section 2(f) of the Central Excise Act,

1944 and Rule 2(d) of the CCR, 2004, therefore, Rule 6 of CCR,

2004 is not applicable to them. Accordingly, they have

reversed credit availed on inputs/input services contained in

‘Body Clay Powder’ under sub rule (5) of Rule 3 of the CCR,

2004.

25.2 The discussions hereinabove has established that the

Noticee has manufactured ‘Body Clay Powder’ classifiable under


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Chapter Sub-Heading No: 25309099 of First schedule to Central

Excise Tariff Act, 1985, which attracts NIL rate of duty. Therefore, it is

evident that ‘Body Clay Powder’ is not cleared by the Noticee as

such, hence, case on hand is not covered under Rule 3(5) of Cenvat

Credit Rules, 2004. Further, I find that the Rule 6(1) of Cenvat Credit

Rules, 2004 stipulates that CENVAT credit shall not be allowed on

such quantity of input and input services used in or in relation to the

manufacture of exempted goods except in the circumstances

mentioned in sub-rule (2) of Rule 6 of Cenvat Credit Rules, 2004,

which places the onus on the manufacturer who avails of CENVAT

credit in respect of any inputs or input services and manufactures

such final products which are chargeable to duty or tax as well as

exempted goods to maintain separate account. I find that by not

maintaining separate account under provisions of Rule 6(2) of Cenvat

Credit Rules, 2004, the Noticee has rendered themselves under an

obligation to pay an amount equivalent to 10% of the value of the

exempted goods cleared prior to 07.07.2009 and 5% of the value of

the exempted goods cleared after 07.07.2009 in terms of Rule 6(3) (i)

of Cenvat Credit Rules, 2004. I find that the Noticee had not exercised

the option as provided under Rule 6(3A) of Cenvat Credit Rules, 2004.

Therefore, the Noticee has no option except to pay amount at the

prescribed rate of 10%/5% of the value of exempted goods under Rule

6(3) (i) of Cenvat Credit Rules, 2004. As the Noticee did not discharge

their liability as per provisions of Rule 6 (3)(i) of Cenvat Credit Rules,

2004, the same is liable to be recovered under Rule 14 of the Cenvat

Credit Rules, 2004 read with Section 11A of the Central Excise Act,

1944 alongwith interest under Section 11AA (erstwhile 11AB) of the

Central Excise Act, 1944.

26. Further, I find that the said Body Clay Powder was removed

without payment of the amount at the rates prescribed in Rule 6 (3)(i)

of Cenvat Credit Rules, 2004, as required as per Explanation-II of

Rule 6 of Central Excise Rules, 2004 as it stood prior to 31.03.2011,

hence, there is violation of provisions of Rule 4 and Rule 11 of Central

Excise Rules, 2002. Also, the Noticee has failed to assess the goods as

per provisions of Rule 6 of Central Excise Rules, 2002. Since the

goods were removed in contravention of the provisions of Rule 4 and

Rule 6 of Central Excise Rules, 2002, therefore, the amount at the

rates prescribed in Rule 6(3)(i) of Cenvat Credit Rules, which is a

Cenvat Credit (and in accordance with Section 2A of Central Excise


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Act, 1944, is a duty of Central Excise required to be paid under Rule 8

of Central Excise Rules, 2002) has not been paid. The fact of

emergence of the said body clay powder at the intermediate stage, its

sale by them without cover of valid Central Excise invoices, availment

of Cenvat credit on the inputs and inputs services used in or in

relation with manufacture of the said body clay powder, non

maintenance of separate records as per Rule 6(2) of Cenvat Credit

Rules, 2004 and not intimating the fact of non maintenance of

separate records to the department is in violation of Rule 12 of

Central Excise Rules, 2002. This fact came on record only when the

audit was conducted. Therefore, I find that the Noticee had

deliberately suppressed the material facts from the department with

an intention to evade payment of an amount under rule 6(3) of Cenvat

Credit Rules, 2004, as amended. Hence, I find that this is a fit case for

invoking the extended period of five years under proviso to Section

11A of the Central Excise Act, 1944 to recover the government-dues

not paid. I also find that by acting in the manner as aforesaid, the

said Noticee is also liable to penalty under Rule 15 of the Cenvat

Credit Rules, 2004 read with Section 11AC of the Central Excise Act,

1944.

27.1 The Noticee submitted that the government, to overcome

the above situation, had amended retrospectively provisions of

erstwhile Central Excise Rules, 1944, CENVAT Credit Rules, 2001,

CENVAT Credit Rules, 2002 and present CCR, 2004 with effect from

01.09.1996. In the instant case, Section 73 read with 8th Schedule of

the Finance Act, 2010 amending Rule 6 of CCR, 2004 is relevant and

accordingly the Noticee had paid an amount equal to CENVAT Credit

attributable to 'Body Clay Powder’ and no further amount is

required to be paid.

27.2 I find that Section 73 of the Finance Act, 2010 amended rule 6

of the Cenvat Credit Rules, 2004 in the manner specified in column

(3) of the Eighth Schedule with retrospective effect, on or from and

upto the date specified in column (4) thereof, so as to provide for

payment by manufacturer of an amount equal to CENVAT credit

attributable to inputs or input services used in or in relation to

manufacture of exempted goods or goods chargeable to nil rate of duty

before or after clearance of such goods along with interest at the rate of 24% per annum. I find that the said amendment applies to the


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cases in respect of which a dispute relating to adjustment of credit on

inputs in or in relation to exempted final products relating to the

period beginning on 10th day of September, 2004 to 31st day of

March’2008 (both days inclusive) was pending on the date on which

the Finance Bill, 2010 received the assent of the President. In the

present case, the Noticee has failed to take recourse to such

amendment and from the plain reading of amendment made vide

Finance Act, 2010, it was one time opportunity and the noticee has

failed to avail the same. Also, these changes have taken effect from

8th May, 2010 on enactment of the Finance Bill, 2010 and it is

expressly provided that these provisions apply only to such cases

where the disputes are pending as on the day the Finance Bill, 2010

is enacted. For brevity and to be more specific, I reproduce the

amendments made vide Finance Act, 2010:

The Eighth Schedule to the Finance Act, 2010 is as follows:

THE EIGHTH SCHEDULE

[See Section 73(1)]

S. No.

Provisions of CENVAT Credit Rules, 2004 to be amended

Amendment Period of effect of amendment

(1) (2) (3) (4)

Rule 6 of the Cenvat Credit Rules, 2004 as published vide notification no. G.S.r. 600(E), dated the 10th Septemeber, 2004 [23/2004-CE(NT), dated the 10th Septemebr’2004]

In the CENVAT Credit Rules, 2004, in rule 6, after sub-rule (6), the following sub-rule shall be inserted, namely: ‘(7) Where a dispute relating to adjustment of credit on inputs used in or in relation to exempted final products relating to the period beginning on 10th day of September, 2004 and ending with the 31st day of March’2008 (both days inclusive) is pending on the date on which the Finance Bill, 2010 receives the assent of the President, then notwithstanding anything contained in sub-rule (1) and (2), and clauses (a) and (b) of sub-rule (3), a manufacturer availing CENVAT credit in respect of any inputs or input services and manufacturing final products which are chargeable to duty and also other final products which are exempted goods, may pay an amount equivalent to CENVAT credit attributable to inputs or input services used in, or in relation to the

10th day of September, 2004 to 31st day of March, 2008 (both days inclusive)


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manufacture of , exempted goods before or after the clearance of such goods: Provided that the manufacturer shall pay interest at the rate of twenty-four percent per annum from the due date till the date of payment of the said amount. Explanation – For the purpose of this sub-rule, “due date” means the 5th day of the month following the month in which goods have been cleared from the factory.’

27.3 It is evident from the above that the said changes by way of

insertion of sub-rule (7) to rule 6 of the Cenvat Credit Rules, 2004

were effective only for the period upto 31.03.2008 (column (4) of the

Eighth Schedule to the Finance Act, 2010 as aforesaid refers). Hence,

the provisions of sub-rule (3) to rule 6 of the Cenvat Credit Rules,

2004 are applicable for the period from 01.04.2008 onwards. In

accordance with the said provision, the noticee in the given situation

was liable to pay an amount equal to 10%/5% of the value of the

exempted goods so manufactured and cleared by them during the

notice period. Also, they would have had the option to pay amount

equivalent to the Cenvat credit attributable to inputs and input

services used in, or in relation to, the manufacture of exempted goods

as per rule 6(3)(ii) of the said rules, had they intimated the

jurisdictional Superintendent of Central Excise as envisaged in rule

6(3A)(a) of the said rules. The Noticee failed in complying with the said

requirement of rule 6(3A)(a) of the said rules. Hence, they are left with

no other option than to comply with rule 6(3)(i) of the said rules, i.e.,

to pay an amount equal to 5%/10% of the value of the exempted

goods.

28.1 The Noticee has requested for correction in demand of duty in

the impugned show cause notice as rate of 10% instead of 5% on

the value of 'Body clay powder' sold after 07.07.2009 and upto

31.07.2009 has been applied. They submitted that in the month of

July 2009, out of five bills issued in that month, four bills for an

amount of Rs.18,11,603/- were issued after 07.07.2009 and

accordingly the demand ought to have been reduced by Rs.90,580/-.

These details have been confirmed by the Range Superintendent. I,

therefore, drop the demand of amount of Rs.90,580/- .


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28.2 The Noticee’s contention that even if it is considered that

they are required to pay an amount as per the provisions of Rule 6(3)

of CCR, 2004, the demand of Education Cess and Secondary

and Higher Education Cess on the amount of 5% and 10% is

beyond the provisions of said rule and addition of amount of

Rs.1,11,552/- (2% Education Cess) and Rs.55,776/- (1%

Secondary and Higher Education Cess) in demand, is totally wrong.

I find that Rule 6(3) of CCR, 2004 is very much clear and the

manufacturer is required to pay an ‘amount’ equal to 10%/5% of the

exempted goods. Thus, the demand of ‘amount’ should be to the extent of

10%/5% of the value of exempted goods only and demand of 2% E.Cess

& 1% HSEC is required to be dropped. As regards, Service tax paid by

the Noticee of Rs.4,87,521/- on input services along with interest of

Rs.99,500/- has no relevance with the demand of amount under Rule

6(3) of CCR, 2004.

29. In view of the above, I pass the following order:

: ORDER :

(i) I order to classify ‘body clay powder’ under Tariff Item No:

25309099 of first schedule to the Central Excise Tariff Act,

1985;

(ii) I confirm the demand of the amount of Rs.54,87,067/- (Rupees

Fifty Four Lac Eighty Seven thousand Sixty Seven only) under

sub Rule (3) of Rule 6 of the Cenvat Credit Rules, 2004 and

under Rule 14 of the Cenvat Credit Rules, 2004 read with

Section 11A of Central Excise Act, 1944. As an amount of

Rs.7,17,014/- already paid by the noticee towards reversal of

amount vide Challan No:00010 dated: 12.05.2011, I order to

appropriate the same;

(iii) I drop the excess demand of Rs.90,580/- as discussed above at

para 28.1.

(iv) I drop the demand of Rs.1,11,552/- (2% Education Cess) and

Rs.55,776/- (1% Secondary and Higher Education Cess) as

discussed above at para 28.2.


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(v) I order to recover the interest at appropriate rate under Section

11AA (erstwhile 11AB) ibid. As an amount of Rs.1,21,316/-

already paid towards interest, I order to appropriate the same;

and

(vi) I impose a penalty of Rs.54,87,067/- (Rupees Fifty Four Lac

Eighty Seven thousand Sixty Seven only) upon them under

Rule 15 of the Cenvat Credit Rules, 2004 read with Section

11AC of Central Excise Act, 1944. The said noticee can avail the

option of payment of 25% of Central Excise Duty as penalty

under Section 11AC of the Central Excise Act, 1944, if the

Central Excise Duty determined under Section 11A and interest

at applicable rate under Section 11AA of the Central Excise Act,

1944 is paid within 30 days from the date of receipt of this

order. The benefit of reduced penalty shall be available only if

the amount of penalty so determined has also been paid within

the period of 30 days from the receipt of this order.

Show Cause Notice No. V.69/AR-MORBI-DIV.II/32/COMMR./2013

dated 26.02.2013 is decided accordingly.

F. No:V.69/15-338/Adj/2011 (V.Padmanabhan) Date :18.07.2013 COMMISSIONER, Central Excise and Customs , RAJKOT.

To,

M/s. Flora Ceramic Private Limited, 8-A, National Highway, Lakhdhirpur Road, Morbi 363642

Copy to: 1. The Chief Commissioner, Central Excise, Ahmedabad 2. The Deputy Commissioner, Central Excise, RRA, Rajkot 3. The Assistant Commissioner, Central Excise, Audit, Rajkot 4. The Assistant Commissioner, Central Excise, Division-II, Rajkot. 5. The Superintendent, Central Excise, AR-Morbi. 6. Guard File

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