Customs, Excise and Gold Tribunal - Mumbai
Kopran Chemicals Co. Ltd. vs Collector Of Central Excise on 3 November, 1989
Equivalent citations: 1990(48)ELT569(TRI-MUMBAI)
ORDER R. Jayaraman, Member (T)
1. This day only the stay application was listed for hearing and not the appeal. After hearing both sides, since the appeal can be disposed of within a short campus, with the consent of both sides, we decided to take up the appeal itself for disposal. It is observed that the appeal has been registered as Special Bench matter. After hearing both sides, we find that the issue involved does not relate to interpretation of notification or classification of the product. The issue involved is mainly whether the exemption is available or not on account of the fact that this has not been mentioned in the classification list. No allegation has been made in the show cause notice to the effect that the goods are not eligible for exemption in terms of the exemption notification. We, therefore, considered that this issue falls within the purview of the Regional Bench and hence took up the appeal for disposal.
2. Heard Shri V.K. Jain, the Chartered Accountant for the applicants/appellants. He contended that in this case, there is no allegation of any clandestine removal or suppression of facts. In the classification list, they have mentioned the physician samples with an abbreviation 'P.S.'. This is the most unfortunate part of their action, which have landed them in difficulty, otherwise for the five months for which the demand has been raised, they have clearly indicated in the RT-12 returns that the goods removed are Physician's free samples and also mentioned the Notification No. 106/80 dated 19-6-1980. Their claim for exemption as indicated in the RT-12 returns has been accepted by the assessing officer and the assessment has been completed on this basis. Subsequently the demand came to be issued by the Supdt. only on the ground of contravention of Rule 173B of the Central Excise Rules for not declaring them in the classification list. It is not the case of the department that there was any material suppression either in the RT-12 return or in the gate passes. Shri V.K. Jain contended that the demand has been worked out only on the basis of the figures relating to physician's samples mentioned in these documents. He, therefore, pleaded that the appeal itself may be disposed of only on the ground as to whether the exemption can be denied on the ground of contravention of Rule 173B of the Central EXcise Rules.
3. Heard Shri C.P. Arya, the learned SDR. He contended that since it is admitted that these goods were not declared in the classification list, exemption cannot be claimed as a matter of right but has to be established. In this view of the matter, he supported the order.
4. After hearing both sides, and perusing the show cause notice and the order of the Additional Collector, we observe that there is no allegation or finding to the effect that physician's samples removed free of duty in terms of Notification No. 106/80 are not eligible for exemption on the ground that clearance of samples has exceeded the prescribed limits or there was violation of any other condition of the exemption notification. Exemption has been denied only on the ground that this has not been specifically mentioned in the classification list. We also observe that there is no specific allegation of suppression of clandestine removal in the show cause notice. We also perused the relevant RT-12 returns and observe that physician's samples have been specifically mentioned and exemption claimed against the aforesaid notification. This claim has been accepted and assessment has been done on that basis. In the context of the aforesaid factual position, we do not find any justification for invoking the extended period, since there cannot be any wilful suppression of any material facts. Moreover, it is observed that the demand has been made for contravention of Rule 173B of the Central Excise Rules. Rule 173B no doubt requires detailed listing of the goods intended to be removed so that their classification could be decided before hand. If physician's samples are not declared in the classification list that alone cannot be a ground for denial of exemption, if the conditions of the notification are complied with. Rule 173B is a procedural requirement for declaring the goods sought to be removed for pre-determination of the rate of duty and eligibility for exemption. If there is a failure on this, that alone cannot disentitle the goods for exemption, if the conditions of the notification are otherwise fulfilled. Eligibility for exemption is to be determined on the merits of the notification. It is not the case of the department that because of non-declaration of physician's samples in the classification lists, the condition prescribed in the Notification has not been complied with. There is no discussion as to how the goods are not eligible for exemption, if considered on merits in terms of the exemption notification. In view of this, even on merits, apart from the question of time bar, the order of the Additional Collector is not sustainable. We, therefore, allow the appeal.