TMI Blog2009 (12) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Usha Kiron Movies - Anajpur, M/s. Harmony, M/s. Maya, M/s. Parade etc., functioned within RFC. Each of these divisions/units is separately engaged in the development and maintenance of the location and landscapes and also for providing the necessary infrastructure services and facilities for the film making activity. (b) Based on the intelligence gathered, the officers of the DGAE, Regional [Unit, Hyderabad conducted investigations into the activities done at M/s. Harmony and M/s. Maya, Units of RFC. The investigations revealed that M/s. Harmony and M/s. Maya had engaged themselves in the manufacture and clearances of certain excisable goods without payment of Central Excise duties, for use in the HUF units and companies within the RFC. Based on these investigations, a show cause notice was issued in C.No. 53/99 (F.No.INV/DGAE/CHE/63/99) dated 16-2-99 by the Additional Director General, DGAE, Chennai. (c) The Show Cause Notice proposed to demand an amount of Rs. 3,76,82,201/- and also proposed to demand interest and levy of penalty under various provisions of the Central Excise Act, 1944 and the rules made thereunder. (d) The said show cause notice was contested by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SSI, Notfn, is to be determined. (g) Other issues are left open 2.2 Consequent to such remand order, the ld. Commissioner took the matter for disposal along with various other show cause notices which were issued subsequent to the first Order-in-Original. The ld. Commissioner after considering the submissions made before him, came to the conclusion that the respondents herein are manufacturers of furniture on job work basis for various divisions and there was no need to issue notices to directors and upheld on merits the demand of the duty liability on the furniture are correct. At the same time, he dropped the entire demand of duty of Rs. 1,78,031/- on limitation and also dropped the proceedings initiated by other various show cause notices. Revenue is in appeal against such an order only on the point dropping of demand of Rs. 1,78,031/- by the adjudicating authority. 3. Ld. Jt. CDR would submit that the adjudicating authority has erred in dropping the proceedings on the limitation. It is her submission that the plea of bona fide belief put forth by the respondent subsequent to the initiation of the proceedings against them by Central Excise department is merely a afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide belief regarding the excisibility of the furniture which was supplied to hotels/agencies. He would submit that 81% of liability of the demand raised by the Revenue was dropped on the ground that the products are not excisable. This would indicate that the respondent had entertained a correct view about non-excisability of the goods. 5. We have considered the submissions made by both sides and perused records. The issue involved in this case is regarding the dropping of demand of duty to the tune of Rs. 1,78,031/- on the respondent for the period 1997-98 and also regarding the 5 show cause notices issued subsequently as regards the FRP sections which were manufactured by M/s. Maya Harmony Inn. 6. As regards the entities emerging at M/s. Maya Harmony Inn i.e. FRP sections, we find that while remanding the matter to the adjudicating authority (reproduced at Para No. 2.1), we had very clearly held that FRP sections are not classifiable under 3925 and FRP/POP statues /or entities are not classifiable under chapter 9618 and they are found to be non-excisable. Revenue is not able to show that they have filed an appeal against such finding. In the absence of any appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances are brought out by the Dept., to show deliberate avoidance of payment of duty. The same ratio applies in this case also. There is nothing in the Excise Act or the Rules or Act framed therein that the authorities are bound to impose penalty the moment there is default in payment of duty. When there is a bona fide belief that goods are not liable to duty it would be rather harsh to impose penalty. The Supreme Court in the case of Pushpam Pharmaceuticals Co. v. CCE, Bombay - 1995 (75) E.L.T. 401 (S.C.) held that no rule could be pointed out requiring a manufacturer to disclose the turnover of exempted goods. Even assuming it was, the appellant could not be held guilty for suppression when the law itself was not certain. Proceedings therefore under the extended period of limitation should fail. Even the Tribunal in the case of Peejay Apparels (P) Ltd. v. CCE, Chandigarh - 2001 (135) E.L.T. 842 (T) held that in view of longstanding practice that no duty was payable there was a bona fide belief and therefore, the appellants cannot be held to have suppressed or mis-stated facts. The Supreme Court in the case of CCE v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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