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Commissioner of C. Ex., Mumbai V/S Pudumjee Agro Industries Ltd.


Company & Directors' Information:- R K B AGRO INDUSTRIES LIMITED [Active] CIN = L17100KA1979PLC003492

Company & Directors' Information:- J R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15342UP1982PTC005792

Company & Directors' Information:- B M AGRO INDUSTRIES LIMITED [Active] CIN = U74899DL1992PLC049988

Company & Directors' Information:- R S AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15319DL1998PTC097025

Company & Directors' Information:- S N T AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U01122DL1997PTC086925

Company & Directors' Information:- D D AGRO INDUSTRIES LIMITED [Active] CIN = U24219PB1999PLC022487

Company & Directors' Information:- S S D AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100MH1998PTC113744

Company & Directors' Information:- S. A. B. INDIA AGRO INDUSTRIES LIMITED [Active] CIN = U01403UP2009PLC038365

Company & Directors' Information:- U K AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15114UP2003PTC028107

Company & Directors' Information:- R. K. AGRO INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U15410WB2012PTC180269

Company & Directors' Information:- R J AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15311KA2005PTC035485

Company & Directors' Information:- S O I AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U15310GJ2010PTC059966

Company & Directors' Information:- S I P AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01403WB2012PLC188362

Company & Directors' Information:- S. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15490PN2013PTC146574

Company & Directors' Information:- J J AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15130MH1980PTC023302

Company & Directors' Information:- A R AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC050526

Company & Directors' Information:- G S AGRO INDUSTRIES PVT LTD [Active] CIN = U01132WB1990PTC049960

Company & Directors' Information:- D V AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC051892

Company & Directors' Information:- P AND G AGRO INDUSTRIES P LTD [Strike Off] CIN = U99999UP1985PTC007509

Company & Directors' Information:- R. K. G. S. AGRO INDUSTRIES PRIVATE LIMITED [Active] CIN = U15100UP2017PTC097391

Company & Directors' Information:- V G AGRO INDUSTRIES LIMITED [Strike Off] CIN = U01400DL1993PLC051666

Company & Directors' Information:- T S AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U15209UP1987PTC008974

Company & Directors' Information:- B AND P AGRO INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U01110MH1972PTC015574

Company & Directors' Information:- P V R K AGRO INDUSTRIES PVT LTD [Strike Off] CIN = U01119AP1988PTC008395

Company & Directors' Information:- K R P AGRO INDUSTRIES PVT LTD [Active] CIN = U01110MH1991PTC062304

    Final Order Nos. A/86048-86050/2017-WZB/EB in Appeal Nos. E/841-843/2006-Mum

    Decided On, 23 February 2017

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai

    By, THE HONORABLE JUSTICE: RAMESH NAIR
    By, MEMBER AND THE HONORABLE JUSTICE: RAJU
    By, MEMBER

    For Petitioner: Ashutosh Nath, Asstt. Commissioner (AR)



Judgment Text


1. The appellants, M/s. Pudumjee Agro Industries are engaged in the manufacture of paper and paperboards. The appellants were availing exemption under Notification No. 3/2001-C.E., dated 1-3-2001. The said notification provided exemption to :

(i) Paper & Paperboard or articles made therefrom manufactured, starting from the stage of pulp, in a factory and such pulp contains not less than 75% by weight of pulp made from materials other than bamboo, hard wood, softwoods, reeds (other than Sarkhanda) or rags.

(ii) Paper & Paperboard or articles made therefrom cleared from a factory in a financial year, up to first clearances of an aggregate quantity not exceeding 3500 MTs.

The appellant availed exemption of the entire 3500 MTs of products and did not restrict itself to first clearance of 3500 MTs. Consequently, demands were raised and confirmed by the lower authorities. Aggrieved by the said, the appellants are before the Tribunal.

2. The appellants submitted written submissions. In the written submission, it was stated that in the case of Pudumjee Pulp & Paper Mills Ltd. against whom also demand was confirmed by the same impugned order on identical facts Tribunal vide Order No. A/545/2007/C-II/EB, dated 13-8-2007 has granted relief. The appellants sought reliance on the same grounds.

3. Learned AR relies on the impugned order. He argued that in the first clearance has to be considered in the light of the decision of Hon'ble High Court of Madhya Pradesh in the case of B.K. Rubber Industries (P) Ltd : 1993 (68) E.L.T. 575 (M.P.) and the decision of Larger Bench of Tribunal in the case of Marutham Textiles Pvt. Ltd : 2003 (153) E.L.T. 219.

4. We have considered rival submission. We find that the Tribunal in its earlier order in the case of Pudumjee Pulp & Paper Mills Ltd. has observed as follows while granting relief:

"We have considered the submissions. We find that the whole exercise is revenue neutral, as the appellant will be entitled to the refund of duty of equivalent amount or more which has been paid by them on clearances within the limit of first 3500 MTs and once there is a clear finding by the adjudicating authority that there was no intention to evade duty, as the exemption has been availed on the maximum quantity of low priced products, the demand of duty will not be sustainable on the ground of revenue neutrality as per the Apex Court's decisions in the cases of Punjab Tractors Ltd. v. CCE, Chandigarh : 2005 (181) E.L.T. 380 (S.C.) and CCE & C v. Narmada Chematur Pharmaceuticals Ltd. - 2005 (179) E.L.T. 276 (S.C.).
5. It is seen that the Tribunal did not have the benefit of observations of decision of Hon'ble High Court of Madhya Pradesh in the case of B.K. Rubber Industries (P) Ltd. (supra) and the decision of Larger Bench of the Tribunal in the case of Marutham Textiles Pvt. Ltd. (supra). The observations of the Tribunal's order dated 14-8-2007 that it is a revenue neutral situation is misplaced. The Notification provides exemption to first clearance of 3500 MTs and only the goods which qualify for exemption and which are part of the first clearance of 3500 MTs would be eligible for exemption, all other goods would be chargeable to duty as per law. Thus, it is not a Revenue neutral situation. The Hon'ble High Court of Madhya Pradesh in the case of B.K. Rubber Industries (P) Ltd. has interpreted the term as follows:

4. The intention of the Government was clearly to exempt first clearances i.e. the clearances in the chronological order up to the aggregate value of Rs. 75 lacs. The intention is not to grant a total concession of Rs. 75 lacs on the goods cleared at any time during the financial year. The logic is understandable. The exemption was meant to Units whose aggregate clearances in the previous year were below two crores, which shows that the Government wanted the benefit to be taken only by small manufacturers. The exemption was to be given on first clearances i.e. in the serial order of clearances. As soon as the aggregate came to Rs. 75 lacs, the concession would automatically stop. The intention was not to give a concession of Rs. 75 lacs straightaway. The suggestion of the petitioner that he could simultaneously clear the goods on full rate of duty would militate against the plain language of the Notification. It would convert an exemption granted to first clearances in the chronological order into a concession granted on the aggregate sale during the entire financial year to be taken on such clearances as the manufacturer deems fit.

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This was not the intention of the Government in issuing the Notification. The Large Bench of the Tribunal has also followed the said decision of the Hon'ble High Court of Madhya Pradesh. In the light of that we are unable to agree with the decision of the Tribunal dated 14-8-2007 in the case of Pudumjee Pulp & Paper Mills Ltd., which was passed without benefit of observation of Hon'ble High Court of Madhya Pradesh and the Larger Bench of the Tribunal. The appeals are consequently dismissed.
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