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TMI Blog1991 (6) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 4,62,034.36 for the period 1-3-1986 to 4-5-1986. The Additional Collector confirmed the demand by invoking the extended period of 5 years under the proviso to Section 11A of the Act. Hence, this appeal. 3. We have heard both sides only on the issue of time barring aspect. 4. Shri Prasad, learned Advocate, appearing for the appellants, submitted that apart from the merits of the case the entire demand is barred by limitation as show cause notice was issued on 15-6-1988 by the Additional Collector for the period 1-3-1986 to 4-5-1986. There was no suppression or mis-statement of facts to invoke larger period under Sec. 11A of the Act. He said that first show cause notice dated 3-12-1987 after more than one year of the approval of the classification list was issued by the Superintendent calling upon the appellants to pay differential duty of 3% for the same period for the same amount. There was no allegation of suppression in the show cause notice but intended to recover short levy beyond the period of six months. The show cause notice was duly answered by the appellants questioning the jurisdiction in issuing show cause notice after six months period, but without passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty and relevant notifications mentioned in the classification of the refractory ceramic constructional goods which is under dispute." which clearly shows that the Department was not clear about the classification of the goods in question. At last this classification list was approved by the Assistant Collector on 6-11-1986 modifying the classification of these items from 6901 to 3801.90 chargeable to 15% duty. He argued that non-mentioning the correct rate of duty in classification list cannot be considered to be a mis-statement of facts. This short payment was due to confusion in decision on the part of the Department itself. Further detail of manufacturing process of items in question was indicated in the RT-12 return which was duly assessed by the Department. The Department was fully aware of these goods regarding their nature, manufacturing and use etc. Hence, it cannot be considered a question of mis-statement of facts if they had paid 12% duty under bona fide impression. Further, the appellants themselves brought to the notice of the Department that these goods may fall under heading 3801.19, having learnt from I.R.M.A. (other concerns manufacturing similar goods) and, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e confusion regarding the classification of the items in question in view of the fact that New Tariff came into force from 1-3-1986 and further, remarks made by the Inspector on 10-6-1986 on the classification list filed by the appellants substantiates this prevailing confusion. When once it was brought to the notice of the Department by giving clear description of the goods in RT-12 and since the goods were cleared after being duly assessed, it was for the Department to take proper steps for the recovery of short levy under the changed circumstances at the appropriate time. Having failed to take action well in time for recovery of short levy, the Department was not justified in raising demand by invoking larger period under Section 11A on the ground of wilful suppression of facts for non-filing the classification list well in time and what was stated in RT-12 was wrong. We do not see that there is any proof of wilful suppression on the part of the appellants in evading duty to invoke larger period. Therefore, we are of the opinion that normal limitation period is applicable for the recovery of short levy, if any. 8. In the result, we set aside the impugned order and allow the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of Excise Duty also differs from 5th May 1986 we are charging these items under 3801.19 and paying Excise Duty accordingly till classification is approved and classification is given by the department". 18. From the above it is clear that both the sides considered the matter under dispute. Hence, it was no longer open to the appellants to claim the benefit of time-bar at this stage. 19. In view of the above position, I hold that the demand was not time barred. Hence the matter is required to be fixed for hearing on merits. 20. It is ordered accordingly. CEGAT, NEW DELHI 21. In view of the difference of opinion between Hon'ble Member (Judicial) and myself, matter is submitted to the Hon'ble President for reference to a third Member on the following point: Whether the demand was time-barred? Hon'ble President. 22. This point of difference is referred to Member Shri K.S. Venkataramani for hearing and disposal in accordance with law. 23. [Order per : K.S. Venkataramani, Member (T)]. - The difference of opinion between the Member (Judicial) and the Member (Technical), as he then was, is on the question whether the demand for duty on ceramic construction goods for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al duty. It was urged that when the Assistant Collector has consciously struck off the paras relating to provisional assessment in the Memorandum of Approval, such assessment cannot be taken to be provisional. The show cause notice issued in this regard also, according to the appellants, did not indicate that the assessment was provisional. Therefore, the appellate forum like the Tribunal, cannot justifiably treat the assessment as provisional, but has to judge the correctness or otherwise of the impugned order without going into extraneous grounds not taken even by the lower authorities. Provisional assessment, the Ld. Counsel contended, must be as a result of application of mind by the Assessing Officer to order provisional assessment and it should be in terms of Rule 9B of Central Excise Rules and Procedures prescribed thereunder should be followed. If the approval of the classification list in November, 1986, in this case, was provisional, there was nothing on record to show when it was finalised, and in that case raising of the demand, itself, becomes premature. Sh. S.K. Sharma, Ld. D.R. contended that the reasoning adopted by the Ld. Member (Technical), as he then was, was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the assessments of these goods shall be made by the Central Excise Officer-in-Charge provisionally under Rule 9B of the Central Excise Rules, 1944, is struck off. In such a context, the question whether the approval is to be treated as provisional or not is well settled by the Madras High Court decision in the case of Indian Organic Chemicals (supra) .The facts of the case have been discussed which are of relevance for the issue, herein, before us in para 9 of the judgment. In that case, it was noted that by the High Court, on perusal of the classification list, in that case, that paragraph 1 of the Memorandum of Approval by the Assistant Collector/Superintendent of Central Excise states that tariff classification and rate of duty leviable in respect of goods at item No. 4 above, was approved until further orders. Paragraph 2 and 3 of the Memorandum, which deal with provisional approval and assessment of goods under Rule 9B have been struck off. After noting this, the High Court observed further that Memorandum of Approval clearly shows that the respondents were conscious of the fact the approval was not provisional in terms of Rule 9B as the relevant paragraph which referr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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