9911796707
TMI Blog1992 (10) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... and penalty imposed on them vide Collector of Central Excise, Bhubaneswar s Order-in-Original dated 31-1-1992, as a condition for the hearing of their appeal. Shri Bhowmick submitted that the notice is barred by limitation and the allegation of misstatement, suppression and mala fide intention to evade duty has been made only to justify the invoking of the longer time limit for the issue of the notice. They are manufacturers of cement and for packing the same they receive HDPE fabrics from which they make bags by cutting and stitching them. The HDPE bags are exempt from duty in terms of exemption Notification No. 223/86. Initially the notification was applicable subject to the condition that woven sacks are manufactured on flat knitting lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edabad. 3. Shri Bhowmick then submitted that the show cause notice issued on 28-8-1991 covering alleged short payment of duty during the period from 2-12-1986 to 31-12-1989 was clearly hit by limitation and only to get over the said handicap allegation of suppression etc. has been made for applying the extended period of limitation. The officers were regularly visiting their factory and they had seen their manufacturing activity including the production of HDPE bags. What they had stated in their declarations for claiming exemption was correct and truthful according to their understanding. They had bona fide believed that HDPE bags manufactured by them were eligible for exemption. As laid down by the Supreme Court in Collector of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only classificatory. He referred to the circular dated 18-11-1988 issued by the Central Board of Excise and Customs regarding HDPE/PP woven fabrics in circular from a copy of which has been included as Annexure-12 in the enclosures to the appeal submitted by the petitioners themselves. It has been clarified that the materials manufactured in circular looms are in tubular form and are not flat in nature but still they are known as fabrics. He contended that the petitioners had suppressed vital facts while applying for exemption from licensing control vide their application dated 1-1-1987 (Annexure -2 to their appeal). They had referred in this application to exemption from duty under Notification No. 223/86 dated 3-4-1986 and in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has been correctly applied by the Collector. Shri Dutt Majumder pleaded that the stay prayed for may be refused. 5. Shri Bhowmick, learned Consultant gave a rejoinder to the arguments advanced by the learned S.D.R. While reiterating the point already made by him that they had disclosed the facts as known to them, he invited our attention to the letter dated 19-4-1989 wherein they had stated that if the Department have any comments on their declaration, they may be intimated immediately so that they can take action as required to avoid any legal complication in future. This letter was addressed to the Assistant Collector and copy endorsed to the Superintendent. The letter had been duly received on 20-4-1989. They did not get any reply f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide declaration of the facts in their knowledge and had committed no suppression or misstatement. They had specifically sought instructions if the Department had any comments vide their letter dated 19-4-1989. The manner in which they had sought Department s comments to be intimated to them so that they can take action as required to avoid any legal complication in future is rather unusual and not a simple declaration for claiming exemption from licensing consequent to exemption from duty. In their own previous declarations dated 1-1-1987, 13-4-1987 and 11-4-1988 they had given simple declarations. The unusual declaration vide their letter dated 19-4-1989, possibly points to some doubt in their mind. All the same, they had specifically ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not have been unknown to the Department in view of the circulars and instructions. It is not that they gave a declaration that they manufactured sacks from fabrics not woven on circular looms. But their staking a claim for exemption under the relevant Notification impliedly constituted a claim that they did not manufacture the woven sacks on circular looms. The question will be whether such an implied claim would constitute a misdeclaration or suppression. We feel the element of doubt present in the circumstances of the case would justify the grant of stay. We, accordingly, grant waiver of pre-deposit of the disputed amounts for the hearing of the appeal and stay of recovery of the said amounts during the pendency of the appeal. 7. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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