TMI Blog2001 (5) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... d are leviable to duty. On 19-8-95, they received a Show Cause Notice dated 26-7-95 demanding duty of Rs. 40,754/- for the clearance affected from 1-4-93 to 31-3-94, under Rule 9(2) of the Central Excise Rules, 1944 read with Proviso to Section 11A of the Central Excises and Salt Act, 1944 and also proposing as to why a penalty under Rule 173Q(1) of the Central Excise Rules should not be imposed on them as it was observed that the sales turnover after considering the turnover of Rice Husk Boards during the year 1993-94 was Rs. 41.74 lakhs which had exceeded the exemption limit prescribed in Notification No. 1/93 dated 28-2-93 for Small Scale Units. 2. The assessees were manufacturing different types of Boards viz. (1) Plain Husk Board, (2) Plain Husk Board (Smooth), (3) Veneerd Board, (4) Jute Fabric Natural Board, (5) Jute Fabric Brown (6) Bamboo Mat Decorative Board. The process of the manufacture is that Rice Husk is winned or wind shifted to remove dust, paddy and grain, if any. The cleaned and dried Husk particles are fed to adhesive applicator where the glue mix is sprayed maintaining a pre-determined weight ratio between glue mix and particles. After the completion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to chapter notes, HSN Notes and common parlance test. As per HSN Notes the Rice Husk Board is to be classified under Chapter Heading 44.06. Hence classifying the product under Chapter 68 does not arise. I have also perused Notification No. 37/93-C.E., dated 28-2-1993. This Notification is applicable for Cement bonded particle board. As per Rule 3(b) of the Rules for the Interpretation of the Schedule, Mixtures, Composite goods consisting of different materials or made up of different components and goods put up in sets, which cannot be classified by reference to (a) shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. In the present case the material that gives the essential character to the particle board is rice husk and not cement, hence the particle board of rice husk has to be classified under Chapter Heading 44.06 and not under Chapter 68. Para 23 - The learned consultant also submitted that the fact of manufacture of rice husk board was within the knowledge of the Department. In support of this, he has submitted that the Superintendent of Central Excise, Hqrs. Preventive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar goods. Therefore if Boards manufactured out of Cereal straw is particle Board it can also be manufactured out of Rice Husk . (iii) Assuming but not accepting the words used such as mean only illustrative and not exhaustive, then HSN Note should have contained the word etc. , after the words or from flex or hemp shieves to support the contention of the adjudicating authority. Missing of the word etc. only indicates that HSN Notes refers only to that specific four materials viz. Bagasses, Bamboo, Cereal Straw and flex or hemp shieves. The words such as is also used only to mean the said four materials and nothing more. To presume what is not there is only subversion of truth. (iv) Further the adjudicating authority has tried to bring similarly between Cereal Straw and Rice Husk. By common man s view also cereal straw is not similar to Rice Husk . As per Oxford Dictionary Straw means Dry Cut stalks of grain and Stalks means the main stem of a Herbaceous plant, the slender attachment or support of leaf, flower, fruit or seeds . Thus the view taken by the adjudicating authority is not correct in law as there is no similarity between cereal straw and Rice Husk. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event of our voluntary letter dated 5-9-94 to the Department seeking clarification of Rice Husk Boards manufactured by us, we are to be charged for suppression of facts. Does it not reflect transparency of our activities? Therefore the charge of suppression of facts is not sustainable and invocation of Proviso to Section 11A is also not sustainable and the demand is time barred on this count also. (iv) Filing to file declaration as per Notification No. 13/92-C.E.(N.T.) has only happened inadvertently due to lack of guidance of Central Excise Officers who visited our factory and moreover we were also well within the exemption limit of 30 lakhs up to the year 1993-94. As clearance exceeded this exemption limit during the year 1993-94, we ourselves approached the Department seeking clarification to enable us to pay duty if any as per law. The Department itself were not sure about the classification of Rice Husk Boards as there was inordinate delay on their part to reply to our letter dated 5-9-94. There were clear 25 days available to them to issue show cause notice within the time limit of six months after we sought clarification. Invoking proviso to Section 11A to cover up Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dealing with it. HSN Notes are relevant when the chapters of Central Excise Tariff are aligned. There is no argument or material placed as to why HSN Notes in this case should not be applied. The interpretation being placed on the HSN Notes by learned Consultant is not acceptable to us, since it is artificially restricting the meaning of the HSN Notes, which we cannot appreciate. We therefore find no merits in the appeal as regards the challenge to classification under Heading 44.06. The same is confirmed. (c) We have considered the plea of suppression of facts being advanced before us. We find that the Collector has given a definite finding on the same in Paras 23 24 of his impugned order (as extracted here-in-above). The appellants have contested the same points which they took up before the Collector, but before us also they did not produce any details of the records alleged to have been taken by Preventive Staff nor have they produced details of the visit of Range Staff. Therefore, reliance of the case law as made out by the learned Consultant does not help the appellants case. Without this evidence being produced, the case law cannot be appreciated and relied. (d) I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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