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2015 (4) TMI 1087 - CESTAT MUMBAI

2015 (4) TMI 1087 - CESTAT MUMBAI - 2015 (328) E.L.T. 403 (Tri. - Mumbai) - Concessional rate of duty as per the Notification No. 141/86-C.E., dated 1-3-1986 - whether the appellant is not entitled to the concessional rate of duty prescribed in the above said notification as the base fabric used is falling under Chapter 60 and not under Chapter 52 as prescribed under the notification - Held that:- In the present case since the coated fabric manufactured by the appellant is not made of base fabri .....

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ved 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 .....

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as 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 extinguished. We, therefore, do not agree with this submission of the ld. Counsel. - Decided against assessee - E/864/2005-Mum - Final Order No. A/974/2015-WZB/EB .....

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sed penalty of ₹ 10 lakhs under Rule 173Q(1) of the Central Excise Rules, 1944. The fact of the case is that the appellant M/s. Bhor Industries Ltd. are engaged in the manufacture of goods falling under Chapter 59 of the Schedule to the Central Excise Tariff Act, 1985. They are also manufacturing PVC coated/laminated cotton fabrics falling under C.S.H. 5903.19 of the Central Excise Tariff. On the said product they are availing concessional rate of duty as per the Notification No. 141/86-C. .....

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d/laminated) were manufactured by appellant using cotton hosiery (knitted cloth) falling under Chapter 60 of the Central Excise Tariff as base fabrics. Since the knitted cloth (base fabric) was classifiable under Chapter 60 and not under Chapter 52 as found out from the supplier s documents like consignment note, it was contended that in the show cause notice that the appellant is not entitled to the concessional rate of duty prescribed in the above said notification. On this observations show c .....

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lus 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 ₹ 1,17,52,6 .....

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siduary entry at different serial number which neither canvassed nor suggested in the proceedings before the Commissioner. In the de novo adjudication the impugned order was passed wherein ld. Commissioner considering the observations of the CEGAT held that classification of the product in question is correctly under 5903.99 which covered under exemption Notification No. 141/86-C.E., dated 1-3-1986. (Sr. No 10 of the table) and Notification No. 63/86, dated 1-3-1987 (Sr. No. 5 of the table). As .....

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mption to the product falling under Chapter 5903.19 on the ground that in the rate column it is mentioned that base fabric should be under Chapter 52. He submits that subsequently in the judgment in the case of Natson Laminates v. Collector of Central Excise, Bombay [2000 (115) E.L.T. 444 (Tribunal)] and the Larger Bench judgment of this Tribunal in the case of CCE v. Entremonde Polyecoaters Ltd. [2000 (122) E.L.T. 700 (Tribunal LB)] it has been held that even though the base fabric is falling u .....

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he submits that appellant has filed the classification list from time to time wherein they claimed exemption under aforesaid notification and the said classification list is approved therefore, there is no suppression of facts or any misdeclaration on the part of the appellant, therefore, demand is time-barred. He further 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 issu .....

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, 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 .....

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remand order correctly held that product of the appellant is classifiable under sub-heading No. 5903.99 and accordingly exemption available to such sub-heading as provided under Notification Nos. 141/86-C.E. and 63/87-C.E. was extended to the appellant. Accordingly the demand was reduced from ₹ 1,17,52,675.40 to ₹ 32,52,451/- therefore, ld. Commissioner s order is legal and correct which deserve to be upheld. 4. We have considered the submissions made by both the sides and peru .....

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of the table). Following said observations in the de novo adjudication the ld. Commissioner passed the order giving following findings : 11.1 It is seen from the records of the case that M/s. BIL were engaged in the manufacture of PVC coated/laminated and the said fabrics were manufactured by using cotton hosiery cloth (knitted cloth) falling under Chapter 60 of the Central Excise Tariff as base fabrics. M/s. BIL were however, availing of the benefit of concessional rate of duty as per Noti .....

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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 fabric .....

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e metre plus the duty for the time being leviable on base fabrics under Chapter 54 or Chapter 55, as the case may be, if not already paid. 5% plus Rs. 2.50 per square metre - Other : 5903.91 - Coated or laminated with preparations of low-density polyethylene Nil Nil 5903.99 - Other 30% plus Rs. 8 per square metre. 11.3 From the above, it is seen that the textile fabrics, impregnated, coated, covered or laminated with plastic falling under Tariff Heading No. 59.03 are brought under three cat .....

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s the duty for the time being leviable on the base fabrics under Chapter 52, if not already paid. - 9. 5903.29 Textile fabrics, impregnated, coated, covered or laminated with plastics Rs. 7.50 per square metre plus the duty for the time being leviable on base fabrics 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 .....

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factured 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 fa .....

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means, the correct classification of the coated fabrics in question manufactured by M/s. BIL is tariff sub-heading 5903.99 of the Central Excise Tariff. (d) Notification No. 141/86-C.E., dated 1-3-1986 covers all coated fabrics falling under Heading 59.03, i.e., Sl. No. 8 of the Table covers the coated fabrics classifiable under 5903.19; Sl. No. 9 covers the coated fabrics classifiable under 5903.29 and Sl. No. 10 covers the coated fabrics classifiable under 5903.99. (e) When the coated fabrics .....

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ons are identical. 12.1 The demand covered by the show cause notice in question relates to the period from 1-3-1986 to 31-1-1989. The rates of duty applicable to the goods in question, namely, coated fabrics manufactured by using cotton hosiery cloth (knitted fabrics) as base fabrics and classifiable under Chapter sub-heading 5903.99 of the Central Excise Tariff when read with Notifn. No. 141/86-C.E., dated 1-3-1986 which was subsequently replaced by exemption Notifn. No. 63/87-C.E., dated .....

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ied 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 t .....

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ot be classified under 5903.19 or 5903.29 of the Central Excise Tariff. That means, the correct classification of the coated fabrics in question manufactured by M/s. BIL is tariff sub-heading 5903.99 of the Central Excise Tariff. (d) Notification No. 141/86-C.E., dated 1-3-1986 covers all coated fabrics falling under Heading 59.03, i.e., Sl. No. 8 of the Table covers the coated fabrics classifiable under 5903.19; Sl. No. 9 covers the coated fabrics classifiable under 5903.29 and Sl. No. 10 cover .....

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t of Notifn. No. 63/87-C.E., 1-3-1987 also as the text of both the notifications are identical. 12.1 The demand covered by the show cause notice in question relates to the period from 1-3-1986 to 31-1-1989. The rates of duty applicable to the goods in question, namely, coated fabrics manufactured by using cotton hosiery cloth (knitted fabrics) as base fabrics and classifiable under Chapter sub-heading 5903.99 of the Central Excise Tariff when read with Notifn. No. 141/86-C.E., dated 1-3-198 .....

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duty 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 d .....

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xcise duty short paid as indicated above, i.e., Rs. 32,16,593.00 (BED) + Rs. 35,858.00 (SED) = Rs. 32,52,451.00. 6. We find that in the product, i.e., PVC coated and laminated fabric manufactured, the appellant use the base fabric cotton Hosiery Cloth (Knitted cloth) falling under Chapter 60 as base fabric. From the tariff entry it is very clear that under Chapter Heading 5903 the coated fabric of base fabric of cotton of Chapter 52 is classifiable under 5903.11 or 5903.19. Coated fabric ma .....

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5903.99 and therefore, correctly extended the benefit of Notification No. 141/86-C.E., dated 1-3-1986 under Sr. No. 10 of the table and Notification No. 63/87, dated 1-3-1987 under Sr. No. 5 of the table appended thereto. As regard the judgment of Natson Laminates (supra)., Asian Leather Cloth Mfg. Co. (supra), and CCE v. Entremonde Polyecoaters Ltd. (supra). It is observed that in all these judgments the issue involved was that if the base fabric falls under Chapter 60 whether exemption Notific .....

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ter 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. plu .....

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