TMI Blog2004 (9) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28-2-99 for the post-Budget period. These clearances covering the period April, 1994 to September, 2000 were taken up by the department for an investigation. It appeared to the department from verification of the appellants' records and allied enquiries that the goods had been misclassified by the party with intent to claim undue benefit of the above Notifications. Therefore, the department issued the following three show-cause notices to the party: (i) Show-cause notice dated 11-10-1999 issued by the Commissioner of Central Excise demanding differential duty on concrete blocks for the period 1994-1995 to 1998-1999. (ii) Show-cause notice dated 4-11-1999 issued by the Superintendent demanding similar duty for the period April to September, 1999. (iii) Show-cause notice dated 20-11-2000 issued by the Superintendent raising similar demand for the period November 99 to September, 2000. The above show-cause notices proposed to recover differential duty from the assessee by denying the benefit of concessional rate under the aforesaid Notifications. The first show-cause notice invoked the extended period of limitation in terms of the proviso to Section 11A(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings except in respect of the assessee's claim for abatement of duty under Section 4(4)(d)(ii). Case law was profusely cited from both sides to buttress their respective standpoints. We shall consider the submissions in relevant contexts in the course of our discussion vide infra. 3. Ld. Counsel has raised a jurisdictional objection with regard to the show-cause notices issued by the Superintendent. These show-cause notices which demanded duty for the normal period of limitation did not invoke the proviso to Section 11A(1) of the Central Excise Act, 1944. They, however, alleged that AEON'S misdeclared their commodity viz. "solid concrete blocks" under tariff sub-heading 6807.20 (as blocks used in pre-fabricated buildings) attracting lesser rate of excise duty. Counsel has argued that, on account of this allegation, the notices should have been issued by the Commissioner. According to him, the Superintendent had no jurisdiction to issue any show-cause notice containing allegation of misdeclaration against the noticee. In this connection, ld. Counsel has relied on the Supreme Court's judgment in the cases of Collector v. ONGC [1998 (103) E.L.T. 3 (S.C.)] and Collector v. Alcobex M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting lesser rate of duty can be equated with fraud, suppression etc. which are expressions with the element of mens rea inbuilt therein. We further observe that, in the case of Rubber Complex (supra), the show-cause notice was accompanied by a corrigendum whereby adjudication of the case was transferred from the Assistant Commissioner to the Additional Commissioner, from which fact it is obvious that the Revenue had envisaged the notice as one under the proviso to Section 11A(1) ibid. For the aforesaid reasons, ld. Counsel's argument that, on account of the allegation of misdeclaration in the subject show-cause notices the Superintendent was not competent to issue the notices, cannot be accepted. We hold that the Superintendent was competent to issue the show-cause notices. 4. Turning to the merits of the case, we notice that AEON'S claimed the benefit of concessional rate of duty for the subject goods in terms of clause (b) of Sl. No. 1 under Notification No. 36/94-C.E., dated 1-3-1994 for the period up to 28-2-1997 and in terms of Clause (2) of Sl. No. 117 under Notification No. 5/97-C.E., dated 1-3-1997. The Revenue was of the view that the goods attracted Sl. No. 2 under No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 36/94-C.E. 1 and the expression "of a kind used in prefabricated buildings" in Sl. No. 117(2) of Notification No. 5/97-C.E. have to be read disjunctively by virtue of the comma occuring just before "Concrete beams and stairs" in each entry. According to ld. Counsel, the said expressions are meant only to qualify "concrete beams and stairs" and are not intended to qualify the "blocks" etc. The purport of this argument is that the blocks mentioned at in Sl. No. 1(b) of Notification No. 36/94-C.E. for the period prior to 1-3-97 and in sub-heading 6807.20 (equivalent to Sl. No. 117 (2) of Notification No. 5/97-C.E.) for the subsequent period need not be intermediates/components of prefabricated buildings for the former period and need not be of a kind used in such buildings for the latter period. In other words, the blocks manufactured and cleared by the appellants are per se eligible for concessional rate of duty in terms of Sl. No. 1(b) of Notification No. 36/94-C.E. as well as Sl. No. 117(2) of Notification No. 5/97-CE for the respective periods. Ld. Counsel has pointed out that the appellants had taken such a view as early as in 1996 in a letter sent to the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under Notifications No. 36/94-C.E. and 5/97-C.E., without there being any obligation for the appellants to show that the blocks constituted intermediates and components of pre-fabricated buildings or that they were of a kind used in pre-fabricated buildings cannot be accepted. Ld. Counsel has relied on the Tribunal's decision in Vinayaka Impex (supra), wherein the description of goods covered by Sl. No. 1 of Notification No. 30/95-Cus. had arisen for interpretation. This description reads as under :- "Woven pile fabrics, chenille fabrics, terry towelling and similar woven terry fabrics, including narrow woven fabrics of width not exceeding 30 cm. and not containing elastomeric yarn or rubber thread." The Tribunal held that the expression "narrow woven fabrics" could not be read in conjunction with the preceding expressions such as woven pile fabrics as there was a comma after each expression. We notice that the expression "narrow woven fabrics" which accompanies the word "including" belongs to an inclusive clause and nothing contained in the inclusive clause is applicable to the outlying expressions such as "woven pile fabrics". Obviously, there is nothing in common between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any need of evidence. The characteristics of the Blocks, stated by the Counsel, are that :- (i) They have interlocking devices for easy fabrication of building. (ii) Cement mortar is not required to bond the blocks, which are laid on a compacted sand bed with a gap of 3 mm. between blocks, which is filled with fine sand, (iii) Blocks are suitable for speedy fabrication of building as they are easy to be assembled. Obviously, the Counsel's argument is for paving blocks which are paved on open floor/ground. But any such floor/ground paved with concrete blocks is not a building capable of being prefabricated. For this very reason, we also think that the Counsel's, argument that a floor or ground paved with concrete blocks, appurtenant to any building, should be treated as '"building" is not relevant. Notifications 36/94 and 5/97 required that the blocks be actually used as components of prefabricated buildings for the period prior to 1-3-1997 or be of a kind used in such buildings for the subsequent period. This requirement could be met only through positive evidence, which is missing in the instant case. Therefore, following the ratio of the decision rendered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification which attracted 10% duty. Copies of the aforesaid classification lists and the correspondence between the assessee and the department are available on record and we have perused the same. We find that the above submissions of the Counsel are factually correct and have not been disputed. It is particularly noticed that, in their reply dated 19-7-1996, AEON'S had explicitly stated their standpoint in the following words :- "We may further like to add that it is our Understanding that the said notification prescribed effective rate of 10% on slabs, lintels, blocks other than goods covered by item 'a' of the said notification without any requirement that they should constitute an intermediate and components of prefabricated building and only beams and stairs should constitute as intermediate components of pre-fabricated building to be entitled to the exempted rate." There is nothing on record to show as to how the Revenue reacted to the above argument of the assessee. Obviously, on the part of the Revenue, there was complete silence in the matter for over a period of three years between the above letter of the assessee and the show-cause notice in question. We have n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th intent to evade payment of duty. The non-payment of duty was on account of the fact that the assessee interpretated and understood the Notifications in the way they did in a bona fide manner without any mens rea. Hence no penalty is warranted under Rule 173Q either. 9. In the Revenue's appeal, the appellant has challenged the abatement of duty allowed by the Commissioner, in the valuation of the goods, under Section 4(4)(d)(ii). We find that the Commissioner was granting a benefit which was due to the assessee in terms of the said provision of law read with the Tribunal's Larger Bench decision in the case of Srichakra Tyres Ltd. [1999 (108) E.L.T. 361 (Tri. - Del.)]. We note that the Larger Bench decision has been affirmed by the Supreme Court in the case of Maruti Udyog Ltd. [2002 (141) E.L.T. 3 (S.C.)], the appellant-Revenue has no case. 10. In the result it is ordered as under :- (i) The demand of duty raised on the assessee for the period 1994-1995 to 1998-1999 and the penalties imposed on them under Section 11AC and Rule 173Q are set aside; (ii) The demand of duty on the assessee for the period from April, 1999 to September, 2000 is affirmed. It is, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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