BORAX MORARJI LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) APPEALS No. E/1436/2011, E/85312 and 85315/2013 are filed by the appellant M/s. Borax Morarji Ltd. and the Appeal No. 1103/2011 is filed by the Revenue. As the issue involved in all these appeals is common, therefore, all are taken up together for consideration and disposal. Brief facts of the case are that M/s. Borax Morarji Ltd. (BML in short) are manufacturer of boric acid which have been cleared on payment of Central Excise duty. The appellant procured two inputs namely LBU 30 and LBU 60 which are required for manufacturing of boric acid. Prior to March, 2006, both the inputs were exempted from payment of all duties. With effect from March, 2006 these inputs were required to pay 4% SAD on the import of the said inputs. The appellant paid SAD @ 4% and taken the credit as a manufacturer. These inputs namely LBU 30 and LBU 60 were also cleared by BML after sieving and repacking into local market without reversing any credit or on payment of any duty. A case has been made against BML as they are manufacturing excisable goods as well as exempted goods therefore as per Rule 6(2) they are required to maintain separate accounts of inputs for both the exempted as well as excisable goods. As BML is not maintaining separate account of inputs as per Rule 6(2) of Cenvat Credit Rules, 2004, therefore, they are required to pay 5%/10% of the value of exempted goods which they have not paid. Accordingly, proceedings were initiated against BML. During the course of investigation, BML paid duty which was appropriated. BML filed an appeal before the Commissioner (Appeals) who in the case of Appeal No. E/1103/2011 held that the goods which are called as exempted goods are not exempted goods as inputs have been cleared as such without any manufacturing activity, therefore, BML is only required to reverse 4% SAD availed by them as credit.

(2.) SHRI Prakash Shah, learned Advocate appearing for BML submits that the sieving and repacking is not a manufacturing activity as per Chapter 25 of the Central Excise Tariff Act. Therefore, they are not a manufacturer of the exempted goods. They are manufacturer of boric acid which is an excisable goods. They have cleared the inputs as such without reversing the credit availed by them. At the most, they have to reverse the credit availed on such inputs. He further submitted that they have paid substantial amount during the course of investigation and the same can be appropriated against the amount of reversal of credit availed of 4% SAD on these inputs. To support his contention he relied on the decision in the case of S.D. Fine Chem Ltd. v. CCE, Thane -I : (2011 (271) E.L.T. 308 (Tri. -Mumbai) : 2012 (27) S.T.R. 106 (Tribunal)).

(3.) CONSIDERED the submissions made by both the sides.