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2015 (4) TMI 1087

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..... n the base fabrics under Chapter 52, if not already paid”. From this mention it is clear that department is under belief that base fabric used by the appellant is falling under Chapter 52 whereas the appellant used the base fabric which is falling under Chapter 60, therefore, this is a clear misdeclaration of the fact. As regards to submission of ld. Counsel that stock was verified physically by the departmental officer, we are of the view that though the stock of the goods was verified but from the stock verification officer cannot ascertain whether the base fabric used in the product is falling under Chapter 52 or Chapter 60. Therefore, we do not agree with the submission of the ld. Counsel on this count. We, therefore, are of the view that there is clear suppression of facts and misdeclaration on the part of the appellant therefore, extended period was rightly invoked. during the period 1-3-1986 to 31-1-1989 the appellant has suppressed and misdeclared facts therefore, show cause notice for the said period can be issued up to five years. Only because show cause notice for the extended period was issued subsequently, nature of suppression and misdeclaration does not get exting .....

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..... he tariff rate on the product falling under Chapter Heading 5903.19. In the classification filed by the appellant effective from 1-3-1986, 1-3-1987 and 1-3-1988 under the column for rate of duty, the appellant declared the rate of duty applicable under exemption notification and plus the duty for the time being leviable on the base fabrics under the Chapter 52, if not already paid . In the show cause notice the main contention of the Revenue is that since the product on which appellant claimed the exemption notification, the base fabric used is falling under Chapter 60 and not under Chapter 52 as prescribed under the notification. In the first round of adjudication the then Commissioner vide Order No. 35/CEX/1991, dated 28-9-1991 confirmed the demand of ₹ 1,17,52,675.40 and penalty of ₹ 25 lakhs was imposed and on account of confiscation of land, building, plant, machinery, etc., redemption fine of ₹ 5 lakhs also imposed. Aggrieved by the said adjudication order dated 28-9-1991, appellant filed appeal before CEGAT. CEGAT vide it s Order Nos. 157 158/95-D, dated 28-2-1995 remanded back the matter to the original authorities for de novo adjudication. In the said .....

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..... submits that show cause notice for extended period, i.e., 1-3-1986 to 31-1-1989 was issued on 26-2-1991 whereas the show cause notice for the period Feb. 89 to 11-6-89 was issued on 18-7-1989. It is his submission that one of the show cause notice dated 18-7-1989 was issued for the normal period, thereafter issuance of show cause notice for the period 1-3-1986 to 31-1-1989 on 26-2-1991 is clearly time-barred. He submits that as regard the goods manufactured by the appellant which is subject matter of the case the fact was known to the department. He also submits that at the time of new tariff coming into force the Superintendent verified the stock physically therefore, for this reason also suppression of fact or misdeclaration does not exist and therefore, the demand for the period 1-3-1986 to 31-1-1989 is clearly time-barred. 3. On the other hand, Shri Ashutosh Nath, ld. Asst. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that the impugned order was passed in de novo adjudication as per this Tribunal Order Nos. 157 158/95-D, dated 28-2-1995 (Bhor Industries Ltd. v. Collector of Central Excise, Pune [1995 .....

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..... the said goods at the tariff rate specified for sub-heading No. 5903.19. 11.2 The demand relates to the period from 1-3-1986 to 31-1-1989 with the enactment of the Central Excise Tariff Act, 1985 and its enforcement with effect from 1-3-1986, Notification No. 141/86-C.E., dated 1-3-1986 was also issued. For the sake of easy reference, the text of Heading No. 59.03 is reproduced below :- Heading No. Sub-heading Description Rate of duty Basic Additional 5903 Textile fabrics, impregnated with plastics other than those of Heading No. 59.02 - Of base fabrics of cotton (Chapter 52) - 5903.11 -- Coated or laminated with preparation of low-density polyethylene Nil Nil 5903.19 -- Other 30% plus Rs. 6 per square metre plus the duty for the time being leviable on t .....

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..... s under Chapter 54 or Chapter 55, as the case may be, if not already paid - 10. 5903.99 Textile fabrics impregnated, coated, covered or laminated with plastics Rs. 8 per square metre - 11.4 From the Tariff description of Chapter Heading 59.03, as reproduced above and the text of the exemption Notifn. No. 141/86-C.E., dated 1-3-1986, the following facts came to light :- (a) Textile fabrics, impregnated, coated, covered or laminated with plastics, get classified under tariff sub-headings 5903.11 and 5903.19 only if such goods are manufactured by using cotton fabrics falling under Chapter 52 as the base fabrics. Similarly, such fabrics get classified under tariff sub-headings 5903.21 and 5903.29 only if such goods are manufactured by using man-made textile materials falling under Chapter 54 or 55 as the base fabrics. If such fabrics are manufactured by using any textile materials, other than cotton fabrics (Chapters 54 and 55), as base fabrics, they get classified under tariff sub-heading 5903.91 or 5903.99. (b) All coated fabrics get classified under the He .....

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..... ) Textile fabrics, impregnated, coated, covered or laminated with plastics, get classified under tariff sub-headings 5903.11 and 5903.19 only if such goods are manufactured by using cotton fabrics falling under Chapter 52 as the base fabrics. Similarly, such fabrics get classified under tariff sub-headings 5903.21 and 5903.29 only if such goods are manufactured by using man-made textile materials falling under Chapter 54 or 55 as the base fabrics. If such fabrics are manufactured by using any textile materials, other than cotton fabrics (Chapters 54 and 55), as base fabrics, they get classified under tariff sub-heading 5903.91 or 5903.99. (b) All coated fabrics get classified under the Heading 59.03 and depending upon the base fabrics used, they get classified under the sub-heading 5903.19, 5903.29 or 5903.99. (c) There is no dispute on the fact that the goods in question, namely, coated fabrics manufactured by M/s. BIL were manufactured by using cotton hosiery cloth (knitted fabrics) classifiable under Chapter 60 of the Central Excise Tariff as base fabrics. Since the base fabrics used is other than cotton fabrics falling under Chapter 52 or man-made textile mate .....

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..... ty as indicated in para 12.1 are applied to the goods in question manufactured and cleared by M/s. BIL, the actual amount of duty payable by them worked out as follows :- Period Quantity cleared in Sq. Metres Effective rate of duty Actual amount of duty payable - Rs. 1-3-86 to 28-2-87 676304 Rs. 8/- per sq. Metre 54,10,432 1-3-87 to 28-2-88 573414 Rs. 9/- per sq. Metre 51,60,726 1-3-88 to 31-1-89 356955 Rs. 8.50 per sq. Metre 30,34,117 (BED) 1,51,706 (SED) 12.3 From the above, the amount of duty short paid by M/s. BIL can be worked out as follows :- Period Actual amount of duty payable - Rs. Amount of duty paid Rs. Amount of duty short paid - Rs. 1-3-86 to 28-2-87 54,10,432 40,57,824 13,52, 608.00 1-3-87 to 28-2-88 51 .....

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..... n that exemption provided to the goods of Chapter 5903.99 is admissible therefore, the judgments cited by the ld. Counsel are distinguished on this ground. As regards to the submission of the ld. Counsel that the show cause notice issued for the period 1-3-86 to 31-1-89 is time-barred as appellant had been filing their classification list from time to time and same were approved, hence, there was no suppression of facts and misdeclaration. We observed that in the classification list the appellant admittedly mentioned rate 6 per sq. mtr. plus the duty for the time being leviable on the base fabrics under Chapter 52, if not already paid . From this mention it is clear that department is under belief that base fabric used by the appellant is falling under Chapter 52 whereas the appellant used the base fabric which is falling under Chapter 60, therefore, this is a clear misdeclaration of the fact. As regards to submission of ld. Counsel that stock was verified physically by the departmental officer, we are of the view that though the stock of the goods was verified but from the stock verification officer cannot ascertain whether the base fabric used in the product is falling under Cha .....

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