Customs, Excise and Gold Tribunal - Mumbai
Khatau Makanji Spg. And Wvg. Co. Ltd. vs Cce on 23 February, 1999
Equivalent citations: 1999(84)ECR420(TRI.-MUMBAI)
ORDER Lajja Ram, Member (T)
1. In this appeal filed by M/s. Khatao Makanji Spg. and Wvg. Co., the matter relates to the duty liability in respect of Punched paper dobby cards. The appellants were purchasing from the market unpunched dobby cards which were then cut to size, punched, pasted into a cylindrical form and then were used captively on the looms. It was alleged in the show cause notice dated 13.12.1990 issued by the Additional Collector of Central Excise, Bombay that the appellants had not filed at the proper time the classification list, price list and had cleared the excisable goods without proper gate passes and had also not filed RT-12 returns with the proper officer. It was alleged in the show cause notice that it amounted to the suppression of facts. The Additional Collector, Central Excise, Bombay who adjudicated the matter confirmed a demand of Rs. 629.64 and imposed a penalty of Rs. 200/-.
2. When the matter was called, no one appeared for the appellants. The notice for today's hearing had been duly issued to the appellants on 8.12.1998. There is no request for adjournment. As the matter is olddemand relates to the period 1986-87we proceed to deal with the matter on merits after hearing Shri Prabhat Kumar, SDR.
3. We have carefully considered the matter and have given due consideration to the submissions made by the Departmental Representative. We find that in the show cause notice cum demand dated 13.12.1990, it had been observed that the appellant had suppressed the facts and had not filed at the proper time the classification list and the price list. No other ground had been mentioned in the show cause notice to substantiate the charge of suppression. The appellants in reply to the show cause notice had submitted that they had a bona fide belief that the activity undertaken by them did not result in bringing into existence any new product. From the market they had purchased duty paid dobby cards which remains dobby cards after they were punched. It was under such bona fide belief that they had not filed classification list or price list. They had further submitted that the entire activity of punching duty paid dobby cards purchased from the market was done under the cognizance of the Department. The concerned Range Superintendent and Inspector were having their office situated in their premises.
4. Shri Prabhat Kumar, SDR submitted that it was the responsibility of the assessee to get a clarification if they had any doubt about the excisability of the product. Without any clarification from the department, on their own, they had suppressed the fact of manufacture and have removed the goods for captive consumption without payment of Central Excise duty. He referred to the Tribunal's decision in the case of KLN Engg. Products Pvt. Ltd. v. Collector of Central Excise, Bangalore reported in 1990 (30) ECR 99 (T) where it had been observed that it is not necessary that word 'suppression' should be specifically mentioned in the show cause notice if the facts are otherwise mentioned in the notice. He also referred to the Tribunal's decision in the case of Punjab Anand Lamp Industries v. Collector of Central Excise, Chandigarh reported in 1989 (23) ECR 218 (T) where it has been observed that under the self-removal procedure the manufacturer was responsible for bringing the goods manufactured for captive use, to the notice of the authorities. He also referred to the Indore Collectorate Trade Notice No. 85/91 dated 19.9.1991 wherein it has been clarified that the process of cutting to size and punching and pasting dobby cards which are used by the Textile Units on looms to cut, woven designs on cloth would amount to manufacture and the resultant product would appropriately be classifiable under sub-heading No. 4823.90 when made of paper and under sub-heading 3926.90 if made of plastic. The Trade Notice appears at page T-10 of the Volume 86 of the Excise Law Times.
5. We find that in this case that earlier a show cause notice had been issued on 19.2.1988 which had been adjudicated by the Assistant Collector, Central Excise and the appellants had filed appeal with the Tribunal which had been listed as appeal No. E/4087/89-CE dated 21.11.198 of The appellants had pleaded that the present show cause notice was received by them on 15.1.1991 after they had already filed appeal with the Tribunal being aggrieved by earlier decision of the Collector of Central Excise (Appeals). They had pleaded that when a matter had been decided already, a show cause notice cum demand invoking the extended period of limitation could not be justified. They had referred and relied upon the Tribunal's decision in Hindustan Development Corpn. v. CCE . Tribunal in that decision had observed that the extended period of limitation was not mvokable when the appellants had been contesting the earlier demands.
6. Keeping in vieiv the facts and circumstances of this case and keeping in view the nature of the dispute and the nature of items involved, we consider that the decisions referred to by the ld. SDR are not applicable and that there was no justification for invoking the extended period of limitation in this case particularly when the same issue had earlier been taken up by the department as early as in the year 1988.
7. Thus, without going into the merits of the case, we consider that the appellants had a case on limitation. We, therefore, set aside the impugned order in original on the limited ground of limitation only.
8. As a result, the appeal is allowed. Ordered accordingly.
(Pronounced in the Court).