TMI Blog1997 (3) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... hydrocarbons of ethylene, propylene and butadiene are covered under Chapter heading 2711.12 and also suppressed the purity particulars of these products and had contravened the rules with intent to evade duty. 3. Issues relating to classification, eligibility for exemption notification and time-bar have been raised. Since questions relating to classification and exemption will need consideration only if extended period of limitation will apply, that question is taken up first. 4. On the question of the extended period of limitation under proviso to Section 11A(1) the Collector had held as follows : From the Show Cause-Cum-Demand Notice issued to the assessee, I find that the proviso to Section 11A(1) is sought to be invoked on the grounds of suppression of facts and contravention of the rules with an intent to evade duty. I, therefore, proceed to examine the material to find out whether there has been any suppression. In this case, the ethylene, propylene, butadiene being cleared by the assessee, especially after the change in tariff brought out by Finance Act,1986, would required the filing of fresh classification list w.e.f. 13-5-86 under the provision of Rule 173B(4)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essees inter alia about the impugned changes effected in the Schedule to the Central Excise Tariff Act, 1985 through the Finance Bill. Therefore, the plea of ignorance and/or inadvertance cannot be raised. In view of this, I find that the assessee was required on 13-5-86 to file an amendment or a fresh Classification List to assist the proper officers so determined the correct classification of ethylene, propylene, butadiene cleared after 13-5-86. In this context, the decision of the Hon ble Tribunal in the case of M/s. Kiran Spinning Mills, Bombay - 1987 (30) E.L.T. 550 is very relevant. The Hon ble CEGAT in Para 17 have held that if no Classification List had been filed the obvious inference would be that the manufacture of the said goods has not been disclosed to the Department and the goods have been cleared without payment of duty in contravention of the Central Excise Rules. Therefore, the extended period of limitation would apply. In the case before me, though the goods have been cleared by determining of certain amount of duty which is not the proper duty, I have no hesitation to hold that the extended period of limitation would apply in this case. 5. When the matter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification list including the items under Chapter 27 and allowed the exemption under Notification No. 276/67. If the Department did not agree with the classification submitted by the appellants nothing prevented the authorities to ask the appellants to revise the same or to ask for submission of purity particulars. Having done no such thing, the Department could not, according to the ld. Counsel, invoke the longer period of limitation. It was his contention that the Apex Court, the High Courts and the Tribunal had, in a series of decisions laid down the circumstances in which the longer period of limitation would be invokable. He cited the following judgments among others in support of his contention :- (1) CCE v. Chemphar Drugs Liniments, 1989 (40) E.L.T. 276 (S.C.); (2) Padmini Products v. Collector of Central Excise, 1989 (43) E.L.T. 195 (S.C.); (3) Tata Iron Steel Co. v. Union of India, 1988 (35) E.L.T. 605 (S.C.); (4) Mac Laboratories v. CCE, 1985 (19) E.L.T. 307; and (5) CCE v Muzzaffarnagar Steels, 1989 (44) E.L.T. 552 7. Ld. D.R. on the other hand referred to the order-in-original passed by the Collector and submitted that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced in Parliament there was no proposal to make any amendments to Chapter Note 2(c) to Chapter Note 29. Third Schedule to the Bill in Part I proposed only one change to Chapter Note 2 which was to clause (b). However, when the Finance Bill, 1986 was enacted as the Finance Act, 1986 with effect from 13-5-86 a further amendment to Chapter Note 2(c) of Chapter 29 was adopted inasmuch as that it substituted the words Methane or Propane (Chapter 27) for the words Methane, propane, ethylene, propylene, butylene or butadiene (Chapter 27) . In other words, the latter four products, namely, ethylene, propylene, butylene or butadiene which were specifically excluded from Chapter 29 by Chapter Note 2(c) of that Chapter no longer applied to them. This change had repurcussions in the classification list earlier filed by the appellants inasmuch as, read with Chapter Note 1(a) to Chapter 29, the appellants products namely, ethylene, propylene and butadiene became classifiable under Chapter 29 if they were of a certain purity. Chapter Note 1(a) to Chapter 29 stated that where the context otherwise required, the headings of Chapter 29 would apply to separate chemically defined organic compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n possible for any person to come to a definite conclusion about the correct classification of the products in the peculiar set of circumstances obtaining then. He drew attention to the fact that the scheme and structure of excise tariff classification had undergone basic changes with the introduction of the Central Excise Tariff Act, 1985 which was brought into effect from 1-3-86. The old Tariff Scheme had been repealed. The structure of the new Act with its new Chapter Notes were yet to be fully understood by the trade. Even before the trade could familiarise themselves with the scheme of CETA, Finance Act, 1986 had made certain amendments to that Act by dropping certain items from Note 2(c) of Chapter 29. This had given rise to doubts and uncertainties. The appellants could not be faulted for this state of affairs. 10. We find some force in this argument. We find that the Finance Bill as introduced had not proposed any change in Chapter Note 2(c) to Chapter 29 of the Central Excise Tariff Act. There was also no clear indication about the nature of the amendment made to the said Chapter Note by the Finance Act when it was finally passed. If Chapter Note 2(c) of Chapter 29 was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself covered Mineral fuels, Mineral oils, etc. When the amendment dropped ethylene, propylene, butylene and butadiene from the coverage of clause (c) of Chapter Note 2 to Chapter 29, the effect of this, prima facie, was that these three products ceased to be covered by the exclusion clause 2 of Chapter 29. However, when it is read in the context of Note 1 to Chapter 29 which begins with the words except where the context otherwise requires, the headings of this Chapter shall apply only to - (a) separately chemically defined organic compounds, whether or not containing impurities , it would raise the question whether the products would become classifiable as organic compounds under Chapter 29 or it would still remain under chapter 27 since sub-heading 27.12 continued to mention them under the sub-heading Petroleum gases and other gaseous hydrocarbons . The resultant restricted scope of Chapter Note 2(c) had, according to the Department, brought these three products within the ambit of Chapter 2901.90 as residuary organic chemicals when read with Chapter Note 1(a) of Chapter 29 which said that the Chapter will apply to separate chemically defined organic compounds, whether or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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