JADAR VIBHAGIYA SAHAKARI PURCHASE & SALE UNION vs KANDLA

Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad REGIONAL BENCH- COURT NO.1 Customs Appeal No.

10073 of 2017 [Arising out of OIO-KDL-COMMR-PVRR-106-2016-17 passed by Principle Commissioner Customs, Excise and Service Tax-KANDLA] M/s Dhanlaxmi Pigments Pvt.

Ltd. ……..Appellant 3019-21, Gidc Phase-iii, Panoli-Bharuch-Gujarat.

VERSUS C.C.

Kandla …….Respondent Custom House, Near Balaji Temple, Kandala-Gujarat WITH Appeal Nos: 1.

Customs Appeal No.

C/10074/2017 (A One Chemicals) 2.

C/10115/2017 (Dhamdod Seva Sahakari Mandali Ltd.) 3.

C/10141/2017 (Raviraj Chemicals) 4.

C/10142/2017 (Malani Enterprises) 5.

C/10143/2017 (Suyog Dye Chemie Pvt.

Ltd.) 6.

Customs Appeal No.C/10144/2017 (Mahendra Dyes & Chemicals) 7.

C/10145/2017 (Ravichem Industries) 8.

C/10146/2017 (Shri Inshwarbhai B Marathe) 9.

C/10147/2017 (Ronak Chemicals) 10.

C/10148/2017 (Laxmi Enterprises) 11.

C/10149/2017 (Shree Sulphamic Chemicals) 12.

C/10150/2017 (Shreyas Intermediates Ltd.) 13.

C/10152/2017 (Bagadia Colourchem Ltd.) 14.

C/10153/2017 (Mahalaxmi Dye Chem) 15.

C/10154/2017 (Narayan Organics Pvt.

Ltd.) 16.

C/10155/2017 (Narayan Industries Ltd.) 17.

C/10156/2017 (Unity Organics Pvt.

Ltd.) 18.

C/10157/2017 (Yash Chemex Inc) 19.

C/10158/2017 (Swastik Industries) 20.

C/10159/2017 (Saraswati Pigments Pvt.

Ltd.) 21.

C/10160/2017 (Jay Chemical Industries Ltd.) 22.

C/10161/2017 (Shiv Dyestuff & Intermediates Industries) 23.

C/10162/2017 (Ramdev Chemical Industreis) 24.

C/10163/2017 (Harish Chemical Engineering Enterprises) 25.

Appeal No.

C/10164/2017 (Chandan Chemcial) 26.

C/10165/2017 (Deep Chem) 27.

C/10166/2017 (Shree Ganesh Pigments Pvt.

Ltd.) 28.

C/10167/2017 (Jahangirpura Group Co Operative Cotton Sale Society Ltd.) 29.

C/10168/2017 (Shri Kadod Seva Sahakari Mandali) 2 | P a g e c/10073-10074,10115,10141-10150,10152-10178,10208-10215,10221- 10231,10237-10242,10245,10248,10265,10274-10277,10302-10312,10332-10333,10344-10347,10359- 10362,10366,10415-10417,10619-10621,10725-10731,10917,11024,12095/2017 C/12196/2016 30.

C/10169/2017 (Idar Taluka Sahakari Kharid Vechan Sangh Ltd.) 31.

C/10170/2017 (Ankleshwar Taluka Co.

Op Purchase & Sales Union Ltd.) 32.

C/10171/2017 (Agriculture Business Centre) 33.

C/10172/2017 (The Himmatnagar Taluka Sahakari Kharid Vechan Sangh Ltd.) 34.

C/10173/2017 (Gothan Fruit & Vegetable Co Op Society) 35.

C/10174/2017 (The Malpur Taluka Co Op Purchase & Sale Union Ltd.) 36.

C/10175/2017 (Agriculture Business Center) 37.

C/10176/2017 (The Hathuran Group Sahakari Kapas Mandal ) 38.

C/10177/2017 (Hadiyol Group Vividh Karyalay Seva Sahakari Mandal) 39.

C/10178/2017 (Jadar Vibhagiya Sahakari Purchase & Sale Union) 40.

C/10208/2017 (The Satambha Vibhagia Khedut Sahakari Purchase Sale Sangh Ltd.) 41.

C/10209/2017 (Shiv Shakti Agro Chemicals) 42.

C/10210/2017 (Mandavi Taluka Kheti Pak Rupante Vechan Karnari Sahakari Mandal) 43.

C/10211/2017 (Vansda Taluka Purchase & Sale Union) 44.

C/10212/2017 (Vav Grahak Sahakari Mandal) 45.

C/10213/2017 (Ramdev Grahak Sahakari Bhandar) 46.

C/10214/2017 (Sharad Agro Centre) 47.

C/10215/2017 (Sanand Taluka Sahakari Kharid Vechan Sangh Ltd.) 48.

C/10221/2017 (The Sendhiyar Group Co.

Op.

Cotton Board Association Ltd.) 49.

C/10222/2017 (Ishan Dyes & Chemicals Ltd.) 50.

C/10223/2017 (Industrial Solvents & Chemicals Pvt.

Ltd.) 51.

C/10224/2017 (Narmada Krushi Seva Vikas Mandal) 52.

C/10225/2017 (Prashant Industries) 53.

C/10226/2017 (Shri Sarjil Khan Baluchi) 54.

C/10227/2017 (Sahada Taluka Sahakari Kharid Vikri Sangh Ltd.) 55.

C/10228/2017 (Chintan Agro Services) 56.

C/10229/2017 (Mazda Colours Ltd.) 57.

C/10230/2017 (Vapi Pigments Pvt.

Ltd.) 58.

C/10231/2017 (Nirbhay Rasayan Pvt.

Ltd.) 59.

C/10237/2017 (Jetpur Paavi Taluka Kharid Vechan Sangh Ltd.) 60.

C/10238/2017 (Krushi & Gramin Vikas Mandal) 61.

C/10239/2017 (Lona Industries Ltd.) 62.

C/10240/2017 (Shri Jignesh Amrutlal Parmar) 63.

C/10241/2017 (Laksh Venture Pvt.

Ltd.) 64.

C/10242/2017 (Navin Chemicals) 65.

C/10245/2017 (Asahi Songwon Colors Ltd.) 3 | P a g e c/10073-10074,10115,10141-10150,10152-10178,10208-10215,10221- 10231,10237-10242,10245,10248,10265,10274-10277,10302-10312,10332-10333,10344-10347,10359- 10362,10366,10415-10417,10619-10621,10725-10731,10917,11024,12095/2017 C/12196/2016 66.

C/10248/2017 (Meghmani Organics Ltd.) 67.

C/10265/2017 (Riverside Industries Ltd.) 68.

C/10274/2017 (Pooranmal Laxminarayan) 69.

C/10275/2017 (Vasundhara Kisan Seva Mandal) 70.

C/10276/2017 (Bhagvad Fertilizers) 71.

C/10277/2017 (Hemant Pravinbhai Jariwala) 72.

C/10302/2017 (Arbuda Transport) 73.

C/10303/2017 (S I Alam) 74.

C/10304/2017 (S C Patel) 75.

C/10305/2017 (Narmada Transport) 76.

C/10306/2017 (Sundaram Roadlines) 77.

C/10307/2017 (Jay Somnath Transport Co) 78.

C/10308/2017 (Satyam Roadways) 79.

C/10309/2017 (Naaz Coprporation) 80.

C/10310/2017 (Sanand Krushi Utpadan Sahkari Mandali Ltd.) 81.

C/10311/2017 (Shrih M Patel) 82.

C/10312/2017 (Shri Arunkumar Babulala Patel) 83.

C/10332/2017 (Jain Transport Service Gujarat) 84.

C/10333/2017 (Shri Dipal R Sheth) 85.

C/10344/2017 (Jalaram Krushi Seva Mandal) 86.

C/10345/2017 (Parswanath Krushi Vikas Seva Mandal) 87.

C/10346/2017 (V Parsuram And Co.) 88.

C/10347/2017 (Shree Janta Grahak Sahakari Bhandar Ltd.) 89.

C/10359/2017 (Rakesh Kumar Jain) 90.

C/10360/2017 (Raj Laxmi Fertilizer) 91.

C/10361/2017 (Hitesh Modi) 92.

C/10362/2017 (Dhaval Modi) 93.

C/10366/2017 (Hiren M Soni) 94.

C/10415/2017 (New Gupta & Co.) 95.

C/10416/2017 (Salimkhan M Pathan) 96.

C/10417/2017 (Bahiyal Group Seva Sahakari Mandali Ltd.) 97.

C/10619/2017 (Sardar krushi Mandal Trust) 98.

C/10620/2017 (Tamsa Anaj Utpadan Sahakari Mandali Ltd.) 99.

C/10621/2017 (Sardar krushi Mandal Trust) 100.

C/10725/2017 (Kukarwada Group Co Operative Multi Purpose Society Ltd.) 101.

C/10726/2017 (Deesa Taluka Purchase & Sales Union Ltd.) 102.

C/10727/2017 (Gujarat State Co.

Operative Marketing Federation Ltd.) 103.

C/10728/2017 (Dhanera Taluka Purchase & Sales Union Ltd.) 104.

Ltd.) 104.

C/10729/2017 (Vijapur Taluka Purchase & Sales Union Ltd.) 105.

C/10730/2017 (Bhabhar Taluka Purchase & Sales Union Ltd.) 106.

C/10731/2017 (Gujarat State Co.

Operative Marketing Federation Ltd.) 107.

C/10917/2017 (Phthalo Colours & Chemicals India Ltd.) 4 | P a g e c/10073-10074,10115,10141-10150,10152-10178,10208-10215,10221- 10231,10237-10242,10245,10248,10265,10274-10277,10302-10312,10332-10333,10344-10347,10359- 10362,10366,10415-10417,10619-10621,10725-10731,10917,11024,12095/2017 C/12196/2016 108.

C/11024/2017 (Khadiya Nagrik Consumer Co.

Operative Stores Ltd.) 109.

C/12095/2017 (Indian Potash Limited) 110.

C/12196/2016 (Gnfc Ltd.) [Arising out of OIO-KDL-COMMR-PVRR-106-2016-17 passed by Principle Commissioner Customs, Excise and Service Tax-KANDLA] APPEARANCE: Present For the Appellant : Sh.

S.R.

Dixit, Sh.

A.

Nainawati (Advocate), Sh.

S.

Suriyanarayanan (Advocate) , Sh.

R.

Subramanya (Advocate), Sh.

Deepak Kumar, Sh.

N.K.

Tiwari (Consultant) , Sh.

P.P.

Jadeja (Consultant) Present For the Respondent : Sh.

Sameer Chitkara (AR) CORAM: HON’BLE MR.

RAMESH NAIR, MEMBER (JUDICIAL) HON’BLE MR.

RAJU, MEMBER (TECHNICAL) Final Order No.

A/ 11258-11368 /2019 DATE OF HEARING: 08.07.2019 DATE OF DECISION: 08.07.2019 RAMESH NAIR The brief facts of the case are that M/s Indian Potash Ltd is engaged in import and trading of various fertilizer products including Urea (for industrial and agriculture use), falling under chapter 31 of the first schedule to Customs Tariff Act, 1975 and imported Urea are cleared to different co-operative society/consignee.

The applicable duty structure for import of Urea during the period from 27.02.2010 to 21.05.2013 was as under: Period Basic Custom Duty (BCD) CVD Edu.

Cess on CVD Sec. & Hsec.

Edu.

Cess on CVD Edu.

Cess on BCD Sec. & Hsec.

Cess on BCD Addl.

Duty 27.02.2010 to 16.03. to 16.03.2012 5% 10% 2% 1% 2% 1% 4% 17.03.2012 to 21.05.2013 7.5% 12% 2% 1% 2% 1% 4% 2.

The Central Excise duty on fertilizer was levied @ 1% ad-valorem w.e.f.

01.03.2011 in the Union Budget for 2011-12.

Thereafter, vide the 5 | P a g e c/10073-10074,10115,10141-10150,10152-10178,10208-10215,10221- 10231,10237-10242,10245,10248,10265,10274-10277,10302-10312,10332-10333,10344-10347,10359- 10362,10366,10415-10417,10619-10621,10725-10731,10917,11024,12095/2017 C/12196/2016 Notification No.

1/2011-CE dated 31.03.2011, the central excise duty was imposed on all goods of chapter 31, other than those which are clearly not be used as fertilizers @ 1% when no cenvat credit on inputs or input services is availed.

The same duty exemption has continued vide the Notification No.

12/2012-CE dated 17.03.2012.

Accordingly, the CVD payable on imported Urea is 10 or 12% supra, if the Urea are clearly not to be used as fertilizers and if the Urea used as fertilizer, the CVD is exempted in excess of 1%.

The case of the department is that M/s Indian Potash Ltd imported Urea by declaring agriculture grade, the said Urea was diverted to industrial user.

Accordingly, the condition of use of Urea for agriculture purpose was not fulfilled.

Consequently, the exemption Notification No.

12/12-CE is not admissible to the appellant M/s Indian Potash Ltd, accordingly, the demand of differential amount of CVD was raised.

For issuance of SCN, detailed investigation was conducted by the department, wherein statements of appellant, buyers, transporters and various other persons who are related to transaction of this Urea were recorded and the same were used as evidence by the adjudicating authority.

3.

Sh.

Nainawati, Sh.

Suriyanarayanan Sh.

Tiwari, Sh.

Jadeja (Consultant) appeared on behalf of the appellants.

R. ts.

Subramanya appearing for M/s Indian Potash Ltd argued on legal issue that there is no fault on the part of the appellant.

The appellant have sold the goods to various distributors who were authorized buyers of Urea.

In that process, if any goods have been diverted, the appellant is not responsible.

He further submits that the notification does not prescribe any actual user condition.

The Urea so imported was with intention for use in fertilizer and the supplies were also made to the authorized distributors, therefore there was no intention that the imported Urea shall be used for any other purpose.

4.

Dixit Ld.

Counsel appearing for some of the co-appellant at the outset submits that out of many parties involving in the case, one party Sh.

Vijay Chandrakant Mulchandani, who was considered to be kingpin of entire case, moved to High Court.

The High Court vide order dated 27-28/11/2017 remanded the matter to the adjudicating authority 6 | P a g e c/10073-10074,10115,10141-10150,10152-10178,10208-10215,10221- 10231,10237-10242,10245,10248,10265,10274-10277,10302-10312,10332-10333,10344-10347,10359- 10362,10366,10415-10417,10619-10621,10725-10731,10917,11024,12095/2017 C/12196/2016 on the ground that the cross examinations of witnesses were not permitted.

He along with other advocates appearing for various parties have submitted that in other cases also, though the cross examination of various persons were asked for but the adjudicating authority has not granted the cross examination, therefore, order passed relying on said statements is illegal and incorrect.

Subramanya further submits that in M/s Indian Potash Ltd case, the appellant moved petition before Hon’ble Gujarat High Court challenging order in original dated 30.09.2016 which is impugned order in the present case. sent case.

The Hon’ble High Court has disposed of and not entertained particularly for the reason that order was appealable to this Tribunal and liberty was granted to file the appeal before Tribunal, therefore, this appeal.

5.

Sameer Chitkara Ld.

Additional Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.

He also submits, if at all matters is remanded, the same may be done on the line of Hon’ble High Court order.

6.

We have carefully considered the submission made by both the sides.

We find that in case of one of the party Sh.

Vijay Chandrakant Mulchandani, the matter was remanded to the adjudicating authority by Hon’ble Gujarat High Court vide order dated 27-28/11/2017 on the ground that the adjudicating authority has not granted the cross examination of the witnesses.

In these circumstances, we are of the view that the issue of cross examination in the case of Vijay Chandrakant Mulchandani will have bearing on the overall case as the department has relied upon the statements in case of Vijay Chandrakant Mulchandani also.

Moreover, in case of other parties, the Ld.

Counsels raised issue that the cross examinations of the witnesses were not allowed by the adjudicating authority.

Therefore, taking observation of the Hon’ble High Court in order dated 27-28/11/2017 and facts that the adjudicating authority has not granted the cross examinations of witnesses whose statements were relied upon in deciding the case, we are of the view that the cross examination of witnesses is primary requirement for fair adjudication as per the statutory provision of Section 9D of Central Excise Act and pari-materia provision in the Customs Act.

In the case of Indian Potash Ltd, the Hon’ble High Court 7 | P a g e c/10073-10074,10115,10141-10150,10152-10178,10208-10215,10221- 10231,10237-10242,10245,10248,10265,10274-10277,10302-10312,10332-10333,10344-10347,10359- 10362,10366,10415-10417,10619-10621,10725-10731,10917,11024,12095/2017 12095/2017 C/12196/2016 vide order dated 06.12.2017 did not entertain the petition, however once on the issue of cross examination, the matter was remitted to the adjudicating authority which involves the same statements which were relied upon in other all cases, it is not just and proper to decide the case in piecemeal for the very simple reason that all the evidences including the various statements were relied upon for issuing the common SCN.

7.

Therefore, in our view, the entire matter needs to be re- considered by the adjudicating authority after allowing the cross examination of various witnesses as requested by the appellant.

Accordingly, we set aside the impugned order and remand the matter to the adjudicating authority for passing de-novo adjudication order after following the principles of natural justice. (Operative portion of the order pronounced in the open court) Ramesh Nair Member (Technical) (Raju) Member (Technical) Seema