AKAY ORGANICS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal is directed against order -in -appeal No. BR(67)/Th -II/06 dt. 27.3.2006.

(2.) THE relevant facts that arise for consideration are appellants are manufacturers of Sodium Carboxy Methyl Cellulose (SCMC) of different grades falling under Chapter Sub -Heading No. 3912.31 of CETA, 1985. Appellants cleared on payment of appropriate duty quantity of 9000 kgs. of SCMC (Akaylose TM) Grade to their purchasers. The purchasers of this SCMC grade Akaylose rejected the same on the grounds of not confirming to the standards. The appellant filed D -3 declaration showing the receipt of this 9000 kgs of rejected SCMC Akaylose TM Grade. After the verification of the said goods by the authorities, the appellants consumed these 9000 kgs of rejected SCMC by blending it with another grade of SCMC AKAYLOSE SD. Subsequently the appellants cleared 27000 kgs of SCMC AKAYLOSE SD Grade but paid duty only on 18000 kgs of SCMC and claimed benefit of provisions of Rule 173H for the 9000 kgs of SCMC AKAYLOSE TM Grade used in the re -making of Such AKAYLOSE SD Grade. Show cause notice was issued to the appellant for the demand of the duty on the ground that the 9000 kgs. of AKAYLOSE TM Grade are different than the AKAYLOSE SD Grade which was cleared by them and there was a question of remanufacture hence the provisions of Rule 173H of Central Excise Rules, 1944 were not applicable. The demand of the duty got confirmed and the adjudicating authority also imposed penalty. On an appeal Ld. Commissioner (Appeals) upheld the order -in -original.

(3.) THE Ld. Advocate appearing on behalf of the appellants submits that provisions of Rule 173H are clearly applicable in this case and they had manufactured SCMC of different grades. It is his submission that the case is squarely covered by the decision of this Tribunal in the case of Commissioner of Central Excise, Mumbai -I v. Camlin Ltd. as reported at , Enfield India Ltd. v. Commissioner of central Excise, Madras are reported at 1996 (88) E.L.T. 773 (Tribunal) and Collector of Customs, Meerut v. J.G. Glass Ltd. .