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TMI Blog2025 (3) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same order, he also decided the follow up statement demand dated 08.05.2019 covering the period 01.04.2017 to 30.06.2017. The entire period in the statement of demand was within the normal period. 2. The issue in dispute is regarding the classification of goods namely Student Almanac and teacher planner, Diaries, Workbook, Calendars, Note-Pads and Scrap books. The appellant printed these goods and removed them at nil rate of duty classifying them under Chapter 49 of the Schedule to the Central Excise Tariff Act, 1985 [CETA], which Chapter covers printed books, newspapers, pictures and other products of printing industry. 3. The case of the Department is that these goods fall under Chapter 48 as "Articles of Paper or of Paper Board" and attract duty @ 12.5% ad valorem. It is also the case of the department that the assessee had wrongly not paid duty and, therefore, the extended period of limitation was invokable and that Shri Kishore Mittal, the Director of the assessee was liable to penalty under Rule 26 of the Central Excise Rules, 2002 [the Rules]. 4. The details of the goods and the duty demanded are as follows :- Sl. No. Item/rate of duty 1st SCN - duty involved (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain same as before". 9. We have heard learned counsel for the assessee and learned authorized representative for the Revenue and perused the records. Submissions by the assessee :- 10. Learned counsel for the assessee made the following submissions :- (i) The assessee is a printer who prints on paper and manufactures various articles of printing and was paying central excise duty on certain goods, such as, exercise books classifiable under Chapter 48 and on certain other products, such as, calendars, drawing books, diaries which are classifiable under Chapter 49. It was not paying duty on letter pads and note pads, note books, Student Almanac and teacher planner and scrap book. These are correctly classifiable under Chapter 49 as articles of printing and therefore no duty was chargeable. In the impugned order, the Commissioner (Appeals) gave only part relief to the assessee upholding the demand of duty on Student Almanac and teacher planner only. Both these are classifiable under Chapter 49. (ii) As per Chapter Note 12 to Chapter 48, except for the goods of Central Excise Tariff heading 4814 or 4821, paper, paper board, cellulose wadding and articles thereof, printe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on Shri Kishore Mittal, Director of the assessee. (ii) The assessee neither declared the sale of all types of goods nor paid duty on them in its ER-1 returns nor informed the department about these products in any manner. Had the enquiry not been conducted and had the officers not visited the place of the assessee, the fact that the assessee was manufacturing Student Almanac and teacher planner would not have come to light at all. Quite clearly, the assessee intentionally suppressed the fact with an intent to evade payment of duty on these goods. Suppression of facts with an intent to evade under section 11A (4) is clearly evident in this case. The Commissioner (Appeals), therefore, erred in dropping the demand for the extended period of limitation. (iii) Considering the intention of the assessee, its Director Shri Kishore Mittal was liable to penalty under Rule 26 which has also been wrongly dropped by the Commissioner (Appeals) in the impugned order. (iv) As far as the assessee's appeal is concerned, the distinction between Chapter 48 and Chapter 49 of the Central Excise Tariff is that while Chapter 48 deals with paper and paper boards, Chapter 49 deals with products o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinted on them and on the cover etc. Similarly, even products of printing industry, such as, books may have some blank space to write one's name, etc. or extra pages to make additional notes. What needs to be seen is what is primary purpose of the good. Is it primarily meant for a person to read, such as a text book which may have some extra space to make notes, or is it primarily something meant to be used as an article of paper, with some material also printed in it. 15. Chapter Heading 4820 of the Central Excise Tariff reads as follows :- 4820 Registers, account books, note books, receipt books, letter pads, memorandum pads, diaries and similar articles, excise books, blotting pads, binders (loose-leaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paper board; albums for samples or for collections and book covers, of paper or paper board". 16. Student Almanac, undisputedly, is meant to help the students record details of assignments to be completed, etc. and for the teachers and parents to put their signatures. This helps the student keep track of his home work and assignments. However, these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Text books, Printed work text books etc., which are similar to the impugned items in the present appeals. Therefore, I note that classification of the impugned items under Chapter 48 and 49 was not unambiguous and remained under continuous litigation during the period under dispute. I further find that the Student Almanac and teacher planner were being mentioned by the appellant M/s Sona Printers in their VAT declarations, and it is not the case of the department that these were being clandestinely removed by M/s Sona Printers. From the above discussion & judicial pronouncements, I note that the appellants stopped paying the Central Excise duty on Student Almanac/teacher planner under Chapter 4820, under the bona fide belief that the same is not required to be paid, not realizing that the same should have been paid by them. I find that it is not the case, where prescribed returns have not been filed or the appellants suppressed some material facts, but the appellants under bonafide belief classified the impugned products under heading 4911 due to various judgments before the period of dispute and prevailing during the period of dispute and that there were no clear-cut instructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides and have perused the records. 23. We agree with the finding of the Commissioner (Appeals) in the impugned order that there was no evidence of intention to evade payment of duty and suppression of facts because it was possible for the assessee to have entertained the belief that the Student Almanac and teacher planner were not exigible to duty and, therefore, to have NOT declared them in their excise returns. 24. In view of the above, we find that the question of limitation in favour of the assessee and against the Revenue and the impugned order needs to be upheld in so far as this limitation is concerned. Consequently, we find that the penalty under section 11AC was also correctly set aside by the Commissioner (Appeals) in the impugned order. Penalty under Rule 26 of the Central Excise Rules of the Central Excise Rules on Shri Kishore Mittal, Director of the assessee. 25. Revenue is aggrieved by the fact that the penalty on Shri Mittal under Rule 26 of the Rules has been set aside by the Commissioner (Appeals). This rule reads as follows :- "RULE 26. Penalty for certain offences. - (1) Any person who acquires possession of, or is in any way concerned in transporting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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