TMI Blog1990 (2) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... -1982. (2) Whether the demand of Central Excise duty on Phenol LB falling under item No. 68 of the erstwhile C.E. Tariff during the period from 1-3-1983 to 16-3-1985 is barred by limitation. 3. E/A 3197/88-C. - The facts of the case are as follows :- The appellant, a Govt of India Enterprise, is the manufacturer of Phenyl under the name Phenol LB in its factory in West Bengal under drug licence issued by the Directorate of Drug Control, Govt of West Bengal. After introduction of Tariff Item 68 in the I Schedule to CESA 1944, with effect from 1-3-1975, the appellants had filed classification lists from time to time, claiming classification of Phenol LB as drug and the benefit of exemption under Notification 55/75, dated 1-3-1975 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) dated 28-3-1988 confirming the order of the Assistant Collector dated 9-12-1987 approving classification of Phenol LB under T.1.68 but disentitling the appellants to the benefit of Notification 234/82, on the ground that the product is a disinfectant and not a drug. 7. We have heard Shri K.K. Banerjee, learned advocate for the appellants and Shri A.S. Sunder Rajan, learned JDR for the respondent. 8. Learned counsel takes us through the several classification lists filed by the appellants. When the matter was taken up for hearing on 12-9-89 the Bench felt that it should peruse the original of classification list No.1/83 effective from 1-3-83 filed by the appellants and on the record of the Department. In particular, the Bench wishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended by Notification 104/82, dated 28-2-1982 and Notification 234/82, dated 1-11-1982. In the classification list effective from 1-3-1984, for the very first time, a doubt arose as to exemption to Phenol and this doubt was raised by the Supdt. on 16-10-1985 and the Asst. Collector on 28-9-1987, endorsed that exemption under Notification 234/82 is not admissible vide adjudication order No. 80/C2/ICDH/87, dated 28-9-1987. 11. Shri Banerjee strenuously contends in view of the above, that there has been no suppression of facts or misdeclaration in the classification lists filed by the appellants and that the extended period of limitation under Section 11-A would not be applicable in this case. He cites a plethora of case law to support hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective . 13. The Supreme Court held in the case of CCE Baroda v. Kosan Metal Products Ltd. -1988 (38) E.L.T. 573) that there was no fraud, collusion or wilful misstatement or suppression on the part of manufacturer when the classification list was finalised and the longer period of limitation is not available to the Dept. In the case of Chemphar Drugs Liniments -1989 (40) E.L.T. 276), the Supreme Court has held that the extended period of 5 years is applicable only when something positive other than mere inaction or failure on the part of the manufacturer is proved and that there must be conscious or deliberate withholding of information by manufacturer. The Supreme Court has held that if the Dept. had full knowledge or manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of exemption from duty under various exemption Notifications. In the absence of suppression, and more so in view of the fact that the Dept. was fully aware of the facts, the extended period of limitation cannot be invoked in this case. 17. In the light of the above background, we hold that the demands in E/A No. 3197 and 3198/88-C are barred by limitation and hence these 2 appeals are allowed. 18. Turning now to the other issue, it would be useful to set out Notification No. 234/82. Notification No. 234/82, dated 1-11-1982 under which the appellants claim exemption reads as follows :- In exercise of the powers conferred by sub-rule(l) of Rule 8 of the Central Excise Rules, 1944 and in supersession of the notification of the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of Explanation I to Notification 234/82. 21. The Phenol manufactured by the appellants is not of pharmacopoeial standards so as to conform to the definition of bulk drug within the meaning of Explanation I to the notification. It does not fulfil the functions of diagnosis, treatment, mitigation or prevention of diseases in human beings or animals. It serves only a sanitation purpose, as it is a cleaning material even according to the appellants own nomenclature of the. product. Though the product manufactured has been certified to be a drug as defined under Section 3 (b) of the Drugs Cosmetics Act 1940, that would not automatically entitle the appellants to avail of the benefit of exemption under Notification 234/82, as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
