TMI Blog1986 (1) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ring search the preventive officers of Excise on examining the appellants invoices found that between September 1977 and October 1982 the appellants had manufactured and cleared Hastelloys B C 14586.045 Kgs valued at Rs. 44,98,144.04. On these goods the appellants had paid duty at the rates applicable to Steel castings under Tariff Item 26-AA(v) when they ought to have paid duty on the aforesaid quantity of Hastelloys B C under Tariff Item 68. After usual investigation by notice dated 7-7-1983 the Collector of Central Excise called upon the appellants to show cause why differential duty of Rs.3,43,929.10 on goods afore-mentioned by not demanded from them applying the extended time limit under Rule 10 of the Central Excise Rules, 1944 in respect of clearances made up to 17-11-1980 and under Section 11A of the Central Excises and Salt Act, 1944 for clearances after this date and, further, why penalty be not imposed under Rule 173-Q for contravention of various provisions of the Act and the rules. The Appellants filed reply dated October 18 1983 which is described as a preliminary reply (pp. 10-17 of the paper Book). Apart from this reply there is no other reply on record. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut in para 1 of the order. He also imposed penalty as already set out. Aggrieved, appellants have filed appeal to the Tribunal. 3. At the hearing of the appeal on 31-5-1985 Shri Jagdeesan, learned Advocate for the appellants, stated that he did not dispute the classification of Hastelloys B C under Tariff Item 68 in view of the Tribunal decision in Messrs Precision Tools and Castings Pvt. Ltd., Lucknow v. C.C. Bombay - 1983 ECR 1024-D (CEGAT). He also did not address any arguments about penalty imposed. His entire arguments were addressed to showing that on the facts and circumstances of the case the time limit for raising demands for differential duty could only be six months and not five years. In that connection he submitted that it was well known that the appellants were engaged in the manufacture of Hastelloy castings as would be evident from letters dated 19-8-1977, 13-10-1980 and 3-2-1981 from Government of India addressed to the appellants (pp. 18, 22-27 and 28 of the Paper book). He also referred to number of dates when officers of Central Excise had checked RG-3 registers of the appellants and done stock-taking in the appellants factory between 14-3-1977 till the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stings manufactured with the aid of electric furnace from old iron or steel melting scrap. No details about the ingredients which had gone into manufacture of the two items were given in the classification lists or any document accompanying the same. This amounted to omission in mentioning essential matters in the classification lists and in such case time limit of five years for raising demand would be applicable. In support of the argument Shri Verma relied on the following two decisions of the Tribunal : M/s. Metal Extruders (I) Pvt. Ltd., Thane v. Collector of Central Excise, Bombay [1984 (16) E.L.T. 148 (Tribunal)]. M/s. V.S.T. Tillers Tractors Ltd., Bangalore v. Collector of Central Excise, Bangalore [1984 ECR 1333 (CEGAT)]. 5. During arguments Shri Jagdeesan submitted with reference to his arguments that the appellants R.T. 12 Returns had been assessed by the excise authorities from time to time and while doing so the authorities had occasion to go through the invoices of the appellants which described the goods as Hastelloys B C. The Bench called upon Shri Jagdeesan to tell the Bench from R.T. 12 Returns on which he strongly relied or any other documents that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to file the monthly R.T. 12 Returns since July 1977. However, on the advice of Superintendent, Central Excise, Ranipet vide letter dated 1-5-1979 by virtue of Government of India Notification No. 159/79-C.E., dated 9-4-1979, the appellants were filing periodical Returns since June 1979. Further averment in the application is that R.T. 12 Returns for the months of February 1980, June to August 1981, October 1981 to April 1982 and January 1983 to February 1983 (which is the period in dispute) were submitted to the office of the Superintendent of Central Excise Range-II, Ranipet within the time limit. They were completely assessed and no discrepancy was noticed. A certificate to this effect dated 5th July, 1985 given by the office of the Superintendent of Central Excise, Range-II, is also enclosed with the application dated 15-7-1985. After receipt of these papers the hearing of the appeal which had been reopened was fixed for 20-9-1985 when Shri N. Ramasubramanyan, Secretary of the appellants appeared for the appellants and Shri H.L. Verma, SDR for the respondent. They were again heard. 6. As already stated, Shri K.P. Jagdeesan learned advocate for the Appellants in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tariff Item and did not give precise description of the goods manufactured by them. This, however, in the facts and circumstances of the case, cannot have much importance because from the order of the Collector himself (para 19) it appears that the question of classification of alloy steel was under consideration of the Department and after taking into account the various aspects it was decided that Hastelloys B C among others cannot be considered as steel products and are not liable to be classified under Tariff Item 26AA. This led to clarification through Trade Notice of 170/79, dated 3-8-1979 in Madras Central Excise Collectorate. Even though the classification lists which the appellants had been filing for a number of years described Hastelloys B C as steel castings, there is overwhelming material on record which would show that the Department either knew that the appellants were manufacturing Hastelloys B C or could have known of the same. The documents accompanying R.T. 12 Returns leave no manner of doubt that the appellants had not hidden the fact of manufacturing Hastelloys B C. In fact, from the order of the Collector himself it appears that this was so and wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts in the classification list and to classify them also correctly. By not giving the full description of their products Hastelloys B C in the classification list as required they have withheld the relevant information deliberately and as such the application of proviso to Section 11A is justified. 8. From the foregoing extracts, it would be seen that the Collector held the appellants guilty of wilful mis-statement or suppression of facts because they did not file revised classification lists after issue of the Trade Notice on 3-8-1979. He also held that it was the appellants duty to have obtained a copy of the Trade Notice. In the earlier portion extracted he had also referred to various Court decisions holding that Trade Notice is binding on the trade so far as classification is concerned. It is unfortunate that the learned Collector did not refer to any particular decision of the High Court so that we could have looked into and applied the same if it were applicable. The Collector, in the extracts above, after stating that as the products are subjected to a specific rate of duty of Rs. 200 per MT, there was no need for the officer to refer to any invoice through the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 7-7-1983 and the surviving period of demand relates to 3-8-1979 to 31-10-1982. Relevant Date would be the date when the appellants under Clause A of Section 11A(3)(ii)(a) should have filed monthly return under Rule 173G(3) of the Central Excise Rules, 1944, which would be the provision applicable, in case of the appellants following self removal procedure. Return should have been filed within 7 days after close of each month. Under sub-clause (ii) of this provision, the filing of return could be extended by the Collector for a period not exceeding 21 days. Even making allowance for 21 days in each month during the aforesaid period, no part of the demand of Central Excise duty would survive against the appellants on the strength of show cause notice dated 7-7-1983 and the whole demand of duty would have to be set aside as time barred. During arguments it was not disputed by the Revenue that if six months time limit were applied to the demand of duty, no part of the demand of duty would survive against the appellants. 10. As for penalty, we have already said that no arguments were addressed by Shri Jagdeesan, Advocate for the appellants. It has also not been disputed th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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