TMI Blog1988 (4) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... 77-C.E. dated 18.6.77. They also did not file declaration claiming exemption from licensing control as required under Notification No. 111/78-C.E. dated 9.5.78 for such goods. On verification of the accounts the Department found that the aggregate value of clearances of all excisable goods during the years 1979-80, 1980-81 and 1981-82 effected by the appellants exceeded Rs. 20 lakhs in each year. Moreover, the value of excisable goods falling under T.I. 68 during each of the aforesaid three financial years exceeded Rs. 20 lakhs. A show cause notice was issued by the Assistant Collector of Central Excise, Division K-1, Bombay on 2.6.83 alleging that the appellants contravened the provisions of Rules 173-B, 173-F, 173-I read with Rule 9(1) of the Central Excise Rules, 1944 in as much as (i) they had not filed classification lists of all the products manufactured by them as required under Rule 173-B, (ii) they had not determined Central Excise duty on the excisable goods valued at Rs. 3,82,045.00 falling under Tariff Item 14 during the year 1980-81 and on goods valued at Rs. 83,318.75 falling under Tariff Item 14 during 1981-82 before removal of the goods as required under Rule 173-F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .79 (copy of the letter is at page 18 of the paper book), intimated to the appellants as follows : Please refer to your letter No. Fax/79-80, dated 9.5.79. In this connection I wish to inform you that the goods manufactured by you without aid of power (which are covered under T.I. 68) are entitled for exemption under Notification No. 179/77-C.E., dated 18.6.77." Shri Deshpande has argued that in view of this letter of the Superintendent of Central Excise, the appellants did not furnish the details of Tariff Item 68 goods in the classification lists filed before the Central Excise authorities. Tariff Item 68 goods were exempted from Central Excise duty. Those were not, therefore, excisable goods and should not be added to the aggregate value of clearances for the purpose of clause 2(ii) of the Notification No. 80/80-C.E., dated 19.6.80 and accordingly no duty was payable, in terms of the said notification, on the paints and varnishes manufactured by the appellants. He has also argued that there was no suppression of facts by the appellants. As early as in May, 1979 they intimated to the Superintendent of Central Excise that they were manufacturing Tariff Item 68 goods and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res excisable goods falling under more than one Item number of the said first schedule and the aggregate value of clearances of all excisable goods by him or on his behalf, for home consumption, from one or more factories, during the preeceding financial year, had exceeded Rs. 20 lakhs." Following the decision of Madras High Court in the case of Tamil Nadu Handloom Weavers Co-operative Society Ltd. v. Assistant Collector of Central Excise, Erode (1974-E.L.T.-J-57) and relying on the definition of excisable goods in Section 2(d) of the Central Excises Salt Act, the Additional Collector has held that Tariff Item 68 goods are subject to duty as per the First Schedule to the Central Excises Salt Act, 1944 and they remain excisable even after exempted from duty by Notification. There are several decisions of High Courts and of this Tribunal in which it was held that the goods which are excisable under the First Schedule to the Central Excises and Salt Act continue to be excisable goods even after they are exempted from Central Excise duty by Notification issued under Rule 8(1) of the Central Excise Rules, 1944. Those decisions were considered and the above ratio was followed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty was, therefore, justified. The quantum of penalty is also not considered to be excessive. Penalty is, accordingly, upheld. 7. In view of the foregoing discussions, we uphold the impugned order and dismiss the appeal. [Contra per : V.P. Gulati, Member (T)] : I agree with the conclusion of Brother Mandal so far as it relates to eligibility criteria for the benefit of the exemption Notification No. 80/80, dated 19.6.1980. However, I do not agree with the findings in regard to the applicability of longer time limit as held in para 6 of the Order. I observe that under Section 11 A of the Central Excises and Salt Act the Department would be entitled to invoke the larger period of limitation if they are able to establish that there had been fraud or collusion or wilful misstatement or suppression of facts or contravention of the relevant provisions with intention to evade payment of duty. The words fraud, collusion, wilful misstatement, suppression etc., all indicate that the acts must have been done with a guilty intent. They should not have been done without the necessary malafide intention. This intension is spe.l.t. out in the later part of the Section as the intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of invoking longer time limit have specifically brought in the intent to evade payment of duty as motivating factor. For invoking the longer time limit therefore, there has to be first a conclusion that intention on the part of the assessee was there for evading payment of duty and for this there has to be something more on record to show that the failure to furnish a particular piece of information was, indeed, due to ulterior motive of evading payment of duty. In a case where an assessee has brought on record information about a relevant activity and made authorities aware of that, it cannot be said that the person harboured any intention to evade payment of duty by holding back information from a declaration furnished by him. While ignorance of law is no excuse, at the same time, an omission due to ignorance or understanding of the law in a particular manner cannot lead to the inference of malafide intent. For that inference to be drawn there should be some evidence to that effect on record or some circumstances pointing to that effect. In my view there is no such evidence or circumstances in the present case to warrant the conclusion that there was misstatement or suppression ..... X X X X Extracts X X X X X X X X Extracts X X X X
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