1988 (7) TMI 188 - AT - Central Excise

Summary

Issues:
Classification of Rubber sheets and Rubber Hose pipes under Central Excise Tariff, Exemption under Notification No. 71/78, Suppression of facts, Mis-statement to evade duty, Time limit for duty demand.

Classification of Rubber sheets and Rubber Hose pipes under Central Excise Tariff:
The respondents filed a classification list claiming exemption under Notification No. 71/78 for Rubber Hose pipes. The Collector (Appeals) noted that the approved list included Rubber sheets exempted from duty. The department later demanded differential duty due to exceeding the exemption limit. The Tribunal observed that the exemption was conditional, limited to goods valued under Rs. 5 lakhs as per the notification. The onus was on the assessee to pay normal duty for clearances exceeding the limit, even if approved in the classification list.

Exemption under Notification No. 71/78:
The department argued that the respondents cleared goods over Rs. 5 lakhs without duty payment, including Rubber sheets. They alleged non-reporting of clearances at nil duty rate and failure to prepare gate passes, violating Central Excise Rules. The respondents contended that all manufactured items were included in the list and believed exempted goods did not require gate passes. They argued that any rule violation was technical and did not show intent to evade duty, thus claiming the duty demand was time-barred.

Suppression of facts, Mis-statement to evade duty:
The Tribunal found that the respondents cleared Rubber sheets without gate passes and did not report their value in returns. This deliberate omission suggested an intent to suppress information from the department to avoid duty payment. The Tribunal held that the Collector (Appeals) erred in concluding no suppression occurred, overturning the decision and allowing the department's appeal.

Time limit for duty demand:
The Tribunal ruled that the six-month limitation under Rule 10 of the Central Excise Rules did not apply due to the deliberate suppression of facts by the respondents. The failure to report clearances exceeding the exemption limit and not issuing gate passes indicated an intention to evade duty, justifying the department's demand beyond the time limit. The order was set aside, and the appeal was allowed in favor of the department.