TMI Blog2006 (1) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... old, nor could it be bought and sold being unstable and having a small shelf life as claimed by the appellant. 1.2 The appeal also involves determination of the question whether the extended period of limitation could be invoked when the department was in full knowledge of the factum of appellants activity for manufacturing of the toys and also the activity of obtaining the said mixture termed as plastisol . 1.3 Then also involves determination of a question whether the reports of Deputy Chief Chemist and Chief Chemist could be relied upon by the Commissioner, in light of the cross examination results before him that the said reports of the two officers were contradictory and they had failed to carry out tests essential which requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department and sent to the Chemical Examination, whose report was supplied to the appellant on 11-9-1998. 2.4 Another Notice dated 4-7-1997 was issued demanding duty for the period December, 1996 to March 1997 and a Corrigendum was issued on 16-6-1998 which altered the basis of the demands. 2.5 Reply was sent to Notice dated 5-6-1997 and 4-7-1997 by a joint reply dated 20-11-1998 and bar of limitation was claimed. On merits, the plea was made that mere mixture of few duty paid raw materials result in a liquid paste and such a liquid paste cannot be called plastisol, as such liquid paste has extremely short shelf life and was not ordinarily marketable. The product to be marketable was required viscose depressant and any absence of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mands therein were determined vide Order-in-Original dated 3-11-2004 issued on 6-12-2004 by holding the product plastisol as excisable having essential characteristics of a stable product plastisol and duty demands were confirmed for the period April 1992 to October 1999 along with penalties and interest. Hence the present appeal. 3.1 After hearing both sides and considering the materials on record, it is found and held : (a) The Show Cause Notices relied upon the report of Laxmi Narayan Institute of Technology. Nagpur and the correctness of the same was challenged and cross examination demanded of the author of the said report. The said request has not been complied which renders the order to be vitiated. (b) Since the ana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the same. (c) There is force in die submission made before us that the Commissioner has arrived at the classification of the Plastisol under Heading 3904.22 when the Show Cause Notice had proposed it Under 3911.10. In doing so the Commissioner has traversed beyond the proposal in the Notice and such an order requires to be set aside on that ground itself. (d) The proposal in the Show Cause Notice was based on the report of Laxminarayan Institute of Technology and even that report as relied upon, is not fully followed and onus discharged as regards the contents to establish marketability and stability of the product. The subsequent test report results received on 11-9-1998 and 9-9-1999 of the Deputy Chief Chemist and Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding out and ascertaining as to what was the exact position in the mixture of the said product, as also the role of the viscosity depressant as were being claimed by the appellant have to be rejected. There is no viscosity depressant not a finding therein. No test having been carried out also the evidence produced by the appellant as regards the essential presence of viscosity depressant that to be the main factor to be rendering the goods a shelf life and consequent marketability, as rendered in the affidavit relied upon by the appellants as per the Reader of Polymer Technology of Mumbai University by these test reports of the Deputy Chief Chemist and the Chief Chemist. (f) There is force found in the plea of the appellant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ingredients of proviso to Section 11A(1), to be applicable in the facts of this case, no penalty under Section 11AC and or interest under Section 11AB or penalty under Rule 173Q can be upheld. The joint penalty under Section 11AC and under Rule 173Q as ordered also cannot be upheld. In view of the decisions in the cases of Lauls Ltd v. CCE - 2003 (158) E.L.T. 711 and Agarwal Pharmaceuticals v. CCE - 2002 (146) E.L.T. 190. In view of the matter, even interest under Section 11AB when no duty demands on the goods plasticol could be determined, inasmuch as the said product cannot be found to be having a shelf life and or marketable and hence excisable. The entire duty demands, penalty and interest demands cannot be sustained. 3.2 The ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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