TMI Blog1990 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... into various fractions. The samples were tested by the Dy. Chief Chemist, Central Excise, Bombay and his report showed that the products meet the specifications of the goods falling under Tariff Item 8 of Central Excise Tariff and one of the products, namely, scingin, met the specification of the goods falling under Tariff Item 10 of Central Excise Tariff. However, the appellants had filed a declaration on 5-1-1981 with the Central Excise department declaring the said product as speciality oil falling under Tariff Item 68 of Central Excise Tariff and had availed of the exemption from duty under Notification 46/81 on the ground that their unit was not a factory under the Factories Act, 1948. A Show Cause Notice was issued on 21-6-1985 charging the appellants that they had manufactured the goods without obtaining Central Excise licence and had cleared various quantities of the products mentioned above, classifiable under Tariff Items 8 and 10 of Central Excise Tariff, without payment of Central Excise duty thereon for the period 9-1-1981 to 17-10-1981. The charges and the demand for duty were resisted by the appellants on merits as also legally on a question of limitation. The Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to know whether it is a speciality oil, as explained under Board s letter dated 23-8-1978. This would show, according to the learned counsel, that the department had knowledge about the product manufactured by the appellants in 1981 itself and in such circuihstan-ces, there could be no charge of suppression of facts which was made for the first time in the Show Cause Notice issued in June 1985. The learned counsel relied upon the case reported in 1987 (31) E.L.T. 982 to say that the onus was on the department to substantiate the allegation of suppression of facts with intent to evade duty. He further relied upon the Supreme Court decision in the case of Nat Steel Equipment Corporation -1988 (34) E.L.T. 8, by which the Supreme Court confirmed the Tribunal s decision that where all particulars had been made available to the department, there would be no ground to allege suppression of facts. Reliance was also placed on the Supreme Court decision in the case of Collector of Central Excise v. Chemphar Drugs Liniments -1989 (40) E.L.T. 276 in which the Supreme Court observed that something positive other than mere inaction or failure on the part of the manufacturer or conscious or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector. The issue was, whether or not the products obtained by fractional distillation were refined diesel oil falling under Tariff Item 68-CET or was furnace oil under Tariff Item 10-CET. The learned counsel also relied upon the case law reported in 1983 (13) E.L.T. 1134 and 1985 (22) E.L.T. 3 (S.C.) for the arguments that unless it is shown that the product is derived from petroleum directly, it cannot be brought under Item 8 or 10 of Central Excise Tariff. Moreover, according to the appellants, the products falling under Items 8 and 10-CET must be those produced in a premises declared as a refinery. The appellants are a small scale unit and not a refinery. 3. The learned Departmental Representative, Shri Narasimha Murthy, appearing for the department, contended that speciality oil is not a specific item in the tariff. The Board s clarification relied upon by the appellants is not binding in quasi-judicial proceedings before an adjudicating authority. The question of classification under Item 68-CET will arise only if it is shown that the goods are not classifiable under Items 1 to 67-CET. There is no standard definition or specification of speciality oil. Therefore, wha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory. It is also not denied that the appellants had given the details of the inputs, process of manufacture and finished product and their use. A sample had been drawn on 30-5-1981 by the department and in the test memo, it has been indicated that the sample is to be tested for analysis and determination of correct tariff and classification and to know whether it is a speciality oil as explained under the Board s letter dated 23-8-1978. The appellants factory had been visited by the officers on 7-12-1981. Again, a second sample was drawn on 8-3-1982. In the background of the above, there has been no allegation of suppression of facts in the first Show Cause Notice issued on 19-4-1982. The second Show Cause Notice issued on 21-6-1985 for the first time alleges suppression on the ground that they had suppressed the detailed specification of their product. In this Show Cause Notice, duty was sought to be recovered for the period 9-1-1981 to 17-10-1981, which is clearly beyond six months period. In the circumstances and the evidence on record, it cannot be said that the department had no knowledge of the composition of the product, having drawn samples therefrom even as early as in 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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