Customs, Excise and Gold Tribunal - Mumbai
Zenith Tin Works Pvt. Ltd. vs Collector Of C. Ex. on 21 March, 1990
Equivalent citations: 1990ECR139(TRI.-MUMBAI), 1990(47)ELT295(TRI-MUMBAI)
ORDER
R. Jayaraman, Member(T)
1. For hearing the applicants appeal on merits, they are required to deposit a sum of Rs. 16,85,176.35 towards duty and Rs. 5,00,000/- toward penalty. Their plant and machinery have been confiscated but allowed redemption on payment of fine of Rs. 1.00 lac.
2. Shri K. Parasrampuria, the learned advocate for the applicants, contended that invoking of extended period alleging suppression of material facts is totally unjust and uncalled for, because of the fact they are removing the metal containers in un-asembled condition under Chapter X procedure for captive use and was known to the department since long. Earlier these were classified under T.I. 68 and they were availing exemption for captive use. Consequent on the change in Tariff effective from 28-2-1986, the department contended that, that was classifiable as parts of metal containers and in absence of any contention for captive use, they are liable to duty, though the metal containers manufactured and supplied for use for packing baby food etc. which are totally exempted. The department sought to deny the exemption by imposing levy on the parts of metal containers. Moreover, the department alleged suppression for invoking the extended period in respect of the demands for April 86 February 87 by issuing a show cause notice on 23-8-1988. He also invited out attention to the departments own show cause notice dated 30-7-1987 demanding duty in respect of the very same item restricting the demand to six months without alleging suppression. The show cause notice itself show that the department is well aware of the fact as early as on 30-7-1987 but chose to raise a demand in 23-8-1988 invoking the extended period alleging suppression of facts.
3. Heard Shri C.P. Arya, the learned SDR. He contended that the situation changed after 28-2-1986 and parts of metal containers were not eligible for any exemption and this fact was known to the assessees but they have not disclosed the same to the department and thus there was suppression. He also contented that in the absence of any exemption available to the parts of metal containers they are liable to pay duty even though the final products are exempted.
4. After hearing both sides, we find that in this case, it is an undisputed fact that the applicants were removing metal containers in unassembled condition since long under Chapter X procedure and hence the position of manufacture of parts can be well within the knowledge of the Department. In this view of the matter, we are not prima facie satisfied about the allegatin of suppression for invoking the extended period, particularly when our attention was drawn to the shown cause notice issued as early as on 30-7-1987 without alleging suppression. Only the subsequent show cause notice dated 23-8-1988 specifically alleges suppressioon. Prima facie this appears to seek to recover the duty in respect of the past period having missed the earliest opportunity to issue the demand in time. In view of this prima facie satisfaction, we grant unconditional stay and waiver of recovery of the duty and penalty amounts. We also direct the department not to dispose of the plant and machinery of the factory and not to interfere with the normal process of production, till the disposal of the appeal.