ORIENTAL CARBON AND CHEMICALS, Vs. CCE

JUDGEMENT

(1.) The issue involved in these three appeals, filed by M/s. Oriental Carbon and Chemicals Ltd. and Ors., is whether the duty of excise is payable by them and penalty is imposable on the extra quantity of carbon black filled by them in the bags cleared by them.

(2.) Shri A.R. Madhav. Rao, learned Advocate, mentioned that the Appellants manufacture carbon black; that the duty has been demanded on the ground that they removed the excess quantity of carbon black deliberately filled in each bag of carbon removed by them. The learned Advocate submitted that the nature of Carbon black in such that it sticks to almost all surfaces with which it comes into contract; that they were dispatching a slightly excess quantity of carbon black than the quantity in M.Ts for which the customer was being charged to avoid any complaints later on of short supply; that for example in an invoice for clearing 10 M.T. of carbon black, the net weight shown in private record 10.240 M.Ts; that as per Department 0.240 M.T. was additional carbon black cleared clandestinely; that in the invoice, the packing material was shown as 0.160 M.Ts. @ 1.6% of the weight of carbon black; that thus slightly excess quantity, namely, 0.080 M.Ts was despatched; that the Department has demanded duty both on 0.160 M.Ts. of packing material as also on 0.080 M.T. of excess carbon black filled in the bags; that the Commissioner under Order -in -Original No. 1/99 dated 5.11.99 confirmed the demand of duty and imposed penalty holding that excess quantity over the standard excess weight was not packing material but carbon black; that this finding has been affirmed by the Tribunal vide Order Nos. A/907 -909/2000 -NB(DB) dated 19.10.2000; that, however, the Tribunal remanded the matter for de novo adjudication, inter alia, on the grounds that the Commissioner has to ascertain the trade practice of putting slightly more carbon black i.e. in regard to the excess weight; that in de novo proceedings, the Appellants have contended that the standard excess weight was the packing material at 1.6% and in regard to the excess weight held to be carbon black, the same was filled so as to avoid any disputes with the buyers; that the Commissioner in the impugned Order, has relied upon two Reports from M/s. Hi Tech Carbon and M/s. Philips Carbon Black of which copies have not been furnished to the Appellants.

(3.) The learned Advocate submitted that the Tribunal had confirmed, vide Final Order dated 19.10.2000, the findings in the earlier Adjudication Order to the extent that the quantity was not the weight of bags and wagon liners but was that of carbon black; that thus the Tribunal has no where upheld the finding that the standard excess quantity was not packing material but also carbon black; that once the earlier Adjudication Order was set aside and the matter was remanded, the entire issue was open and the Commissioner was directed to conduct the trade enquiry; that excess carbon was being filled as a trade practice; that in the impugned Order, the Commissioner has shut out their contention that the standard excess weight was packing material. He, further, submitted that the demand of duty is unsustainable inasmuch as the duty has been discharged on ad -valorem basis and even if they have supplied excess carbon black, they have not charged or realized any excess amount in regard to the excess quantity supplied; that as the Department has nowhere shown that any additional amount has been realized by the Appellant, the confirmation of the demand is totally unsustainable. He relied upon the following decisions: