TMI Blog1993 (1) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise, Rajapalyam and the petitioner was informed that the sample is calcium hydroxide in powder form and it is not cement based water paint. In 1981, the petitioner was called upon to submit his profit and loss account from the year 1974 to 1980 to the Superintendent of Central Excise, Rajapalyam. On 30-4-1982 the petitioner wrote to the Superintendent of Central Excise that the production was eligible for exemption under Notification No. 5/70 and it was not to be classified under Tariff Item No. 68. The petitioner furnished details of investment like machinery, building etc., in August 1982. In September 1982, the petitioner was called upon to furnish a certified copy of the total sales of its products for the year 1981-82 duly certified by the auditor of the company so as to enable the department to determine the duty liability of its product under Tariff Item No. 68. The petitioner sent a reply that the product would fall under Tariff Item No. 23 and not under Tariff Item No. 68 and it was entitled to exemption as stated already. In October 1982, samples were drawn by the department to find out whether it was Sagol cement and eligible for exemption under the aforesaid notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentations. 4. The aggrieved petitioner preferred appeals to the Collector. The latter passed an order on 31-3-1986 setting aside the orders of the Assistant Collector and remanding the matter for fresh consideration. The Collector held that the question could be decided only after the result of the test samples drawn already was communicated to the party and the market name of the item, as distinct from the name used by the manufacturers should also be considered. Hence, the Collector directed de novo enquiry into the matter and has directed the authorities to make enquiries in the market and collect trade enquiry reports. 5. By virtue of Section 8 of the Central Excise Amendment Act of 1985, the power to issue show cause notice invoking the extended period of five years stood transferred to the Collector of Central Excise. Hence, the Collector issued a final show cause notice on 17-9-1988 in continuation of the two earlier show cause notices. By that time, the market enquiries had also been made and it is the case of the department that 'Janatha Cem' was used for white-washing the walls. The Collector held an enquiry and ultimately passed an order on 31-3-1989 confirming th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section viz., clause (1) of Section 11A of the Act. The question is whether the petitioner is guilty of misstatement of fact or suppression of fact or contravention of any of the provisions of the Act. Inasmuch as the petitioner has not chosen to challenge the classification in these proceedings, I have to proceed on the footing that the petitioner's product will fall under Tariff Item No. 68 and not Tariff Item No. 23 as claimed by the petitioner. I have also to proceed on the footing that the petitioner's product cannot be claimed to be Sagol entitled to the exemption from duty under the notification of 1970. 9. In those circumstances, the only question will be whether there was misstatement of facts by the petitioner. There is no doubt about the same as the petitioner has throughout been making a claim before the Department that his product is nothing but Sagol and is entitled to exemption under Notification of 1970. The said contention having been found against and not challenged in these proceedings, I have to hold that there was a misstatement of facts on the part of the petitioner and consequently, the proviso to Section 11A(1) of the Act can be invoked by the Department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944 in raising the demand for the period November 1979 to March 1985. As already mentioned above the party was manufacturing and clearing lime powder right from 1974 onwards. It was classified as sagol in 1979, solely for the purpose of availing the exemption contained in Notification No. 5/70. This was done by manipulation of the records through correction in the partnership deed and misrepresentation of the facts before the Departments relating to the correct classification of the product manufactured by them. Under the self removal procedure scheme, manufacturers of excisable goods are bound to declare the correct nature, description and classification of the product manufactured by them in their classification list under Rule 173C of the Central Excise Rules, 1944. In this case the party manipulated the records to show the department that what they manufactured and cleared is 'Sagol' whereas it was well known to them that sagol and lime powder are not the same. This clever misrepresentation of fact was carried out with the sole intention to evade payment of duty on the lime powder manufactured by them." 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
