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2005 (11) TMI 144 - AT - Central ExciseClassification of 'Calcined China Clay' - Demand - Limitation - Extended period - Suppression - Penalty - HELD THAT:- By the proposals of 1995-96, completely exempted all goods falling under Heading 25.05 eliminating need for separate enumeration of various sub- headings. The tariff rate of duty was given as nil for the Heading 25.05. Consequently there was no need to have a separate sub heading for the calcined china clay under Heading 25.05. Thus, the purpose of deleting the sub heading 2505.10 was not to classify the calcined china clay out of Heading 25.05. HSN Heading 25.07 specially covers kaolin and other kaolinic clays, whether or not calcined. In fact the relevant portion of the sub-heading 2505.10 of the tariff as it stood after enactment of Finance Act, 1990 and before enactment of Finance Act, 1995 was pari materia with Heading 25.07 of HSN. Thus, the calcined china clay will fall under Heading 25.05 of Central Excise Tariff attracting nil rate of duty being the tariff rate applicable to that If heading. Note 2 to chapter 25, no doubt, indicates that the Heading 25.05 does not apply to products that have been calcined. However chapter note begins with the expression "except where the context otherwise requires" this expression was introduced by the Finance Act, 1990 simultaneously with the specific enumeration of calcined china clay in heading 2505.10. If the interpretation were to be that any calcined product were outside heading 25.05, then the specific enumeration of calcined china clay, under heading 2505.10 would be an exercise in futility. It is settled law that no interpretation should be adopted that renders an legislation redundant and nugatory. In fact to put this principle on a firm statutory basis, note 2 itself appears to be amended by addition of the expression, except where the context otherwise requires. Therefore the requirement of chapter note 2 that calcined product would be outside the scope of heading 25.05 would not be applicable to the present case. The plea that in any event, the demand made pursuant to the show cause notice for the period 7th February, 2000 to 6th October, 2001 is barred u/s 11A of the Act & the only ground on which the larger period is invoked is that the appellants did not declare in the declaration that they manufacture calcined china clay and only declared the china clay has to be upheld &. limitation bar is to be applied. In any event, the issue involved in the present appeal relates to the classification of calcined china clay and therefore, the proviso to Section 11A(1) cannot be invoked and penalties cannot be imposed as no intent to evade by incorrect classification can be established. The duty demands are not upheld. Therefore as arrived imposition of penalty cannot be upheld. The order is therefore set aside & appeal allowed.
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