TMI Blog2003 (11) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... s been filed against the impugned order-in-appeal dated 24-12-2002 passed by the Commissioner (Appeals) vide which he has reversed the orders-in-original. Since the issue involved in both the appeals is common regarding the availability of the benefit of Notification 25/97-C.E., dated 7-5-97 to the respondents and as such are being disposed of through this common order. 2. The learned SDR has contended that the benefit of Notification No. 25/97-C.E., dated 7-5-97 is not available to the respondents as they had cleared sewing thread in the form of hanks and that the Commissioner (Appeals) has wrongly observed that the said notification is applicable to such clearances of the sewing thread. Therefore, the impugned orders passed by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad. The respondents in the instant case, had cleared the thread/yarn in the form of hanks only and as such it cannot be concluded that it had been put on support before clearing the same from the factory by the respondents. The observations of the learned Commissioner (Appeals) that it did not matter if the respondents were not putting the thread on support like reels and tubes as the same had been mentioned in Section Note 3 of Section XI of the Schedule by way of example, cannot be taken to be legally correct. Section Note 3 of Section XI prescribes the conditions, which must be satisfied before any thread can be declared as sewing thread and one of the most important conditions laid down is that the thread must have been put on support e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be dressed for use as sewing thread. This condition in the present case, does not stand satisfied as the thread had been cleared in the form of hanks, by the respondents. Therefore, the benefit of the Notification No. 25/97, dated 7-5-97 for claiming concessional rate of duty is not available to the respondents. The duty demand in both the appeals with penalty was rightly confirmed against the respondents by the adjudicating authority through the orders-in-original. The Commissioner (Appeals), in our view, has erroneously reversed those orders, by misinterpreting the definition of sewing thread provided by Section Note 3 of Section XI of the Schedule appended to the CETA. Therefore, the impugned orders passed by him in both the appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain whether thread manufactured and cleared by the respondents and in respect of which they have claimed concessional rate of duty under the exemption notification, as a sewing thread or not, reference has to be made to the provisions of Chapter Heading 55.09 and Section Note 3 of Section XI appended thereto. The thread cleared by the respondents as observed above, does not satisfy the definition of the sewing thread as given in Section Note 3 of Section XI of the Schedule. The ratio of law laid down in (i) Keltron Power Devices Ltd. v. Collector of Customs - 1987 (28) E.L.T. 93, (ii) Khoday Brewing Distilling Industries Ltd. - 1997 (90) E.L.T. 336, (iii) S.S. Appliances (P) Ltd. v. Collector of Customs - 1998 (100) E.L.T. 429, (iv) CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/methods and processes and must not be restricted to the kind of support mentioned as example. But in the present case, the thread manufactured and cleared by the respondents does not fall within the definition of sewing thread as prescribed by Section 3 Note of Section XI as observed above. 7. In appeal No. E/1383/03, the issue of limitation is also involved. In this appeal the duty demand has been raised for the period May, 97 to April, 98 and show cause notice was served on the respondents on 31-5-2000. The learned Counsel has contended that the respondents filed declaration under Rule 173B with the Department from time to time since 7-5-97 and claimed the benefit of Notification 25/97 and the correctness of that declaration was never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contested the imposition of penalty under Section 11AC. He has contended that the respondents acted under a bona fide belief that the thread cleared by them was covered by the exemption notification in question and as such, no penalty could be imposed on them. But we are unable to subscribe to the contention of the learned Counsel. The respondents had suppressed the material facts from the Department and the extended period has been rightly invoked against them. Therefore, for the purpose of imposing penalty, the provisions of Section 11AC stands attracted. The respondents cannot be said to have acted in a bona fide manner. Rather, they acted with a mala fide intention with a view to evade payment of duty and claimed exemption under the no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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