Customs, Excise and Gold Tribunal - Delhi
Blue Star Industries vs Collector Of Central Excise on 4 August, 1989
Equivalent citations: 1990ECR537(TRI.-DELHI), 1990(47)ELT86(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. In this stay application, the applicants have sought for stay of imposition of duty amount of Rs. 1,11,081.22 P. passed by the respondent Collector in order dated 22-9-1988 by classifying the goods stove burner parts manufactured by the applicants under the erstwhile Central Excise Tariff Item 26A(3)(ii) from 1-8-1984.
2. The applicants contention is that the stove burner parts manufactured by them are to be classified under Tariff Item 68. They have further contended that many manufacturers of identical stove burner parts are being classified under Item 68. They have further contended that the respondent Collector has confirmed the demand retrospectively under Section 11A of the Act and the said confirmation of the demand is time-barred.
3. Shri B.B. Gujral, Advocate appearing for the applicants, strongly contended that the applicants have a storage prima-facie case in as much as that the goods manufactured by them, have all along been classified under Item 68. The applicants are a small scale industry and had at no point of time, exceeded the turnover of Rs. 20 lakhs. They have submitted that in the Trade Notice published in 1985 E.L.T. Vol. 20 T-9, the semifinished brass forgings have been classified under Item 68 of C.E.T. He has also relied upon two citations in the case of Tata Iron & Steel Co. Ltd. v. Union of India and Ors. reported in [1988 (35) E.L.T. 605 S.C. para 7] and also in the case of Upadhaya Valves Manufacturers v. Collector of Central Excise - [1988 (12) E.T.R. page 1]. He has submitted that in the Public Notice issued in 1984 published in (1984 E.C.R. 96-B), the semi-finished brass forgings have been classified under Item 68 and not under Item 26. He has pointed out that the applicants had submitted the classification list and also had sought for exemption from the Superintendent of Central Excise by filing a declaration for exemption under Notification No. 77/85, dated 17-3-1985 and declared their goods under Tariff Item 68. On the basis of the said declaration, the Superintendent had issued an Exemption letter. The Counsel drew out attention to the copy of the declaration as well as the Exemption letter Exhibit C at page 48. He also drew our attention to Exhibit 10 which is the copy of the licence issued to them under the Excise rules.
4. Shri Gujral pointed out that the first show cause notice was issued on 8-6-1986 under which a demand for Rs. 7,247.21 was demanded and by a second show cause notice dated 15-4-1987, a demand for Rs. 1,03,834.01 P. was demanded and the goods were all seized which were redeemed on payment of fine of Rs. 1500/-. His main contention has been that the goods manufactured by them are classified under Item 68 and that there is no manufacture of any new item as contended by the Department. He heavily relied upon on theprima facie goods and also on the basis of Trade rulings and citations in their favour. As regards financial hardship, he contended that the parties are not financially sound and they were making a very small profit. He submitted that after the seizure of the goods, the applicants work has practically come to a standstill. Based on theprima-facie case as well as on time-bar, he submitted that it was a fit case for stay of the recovery of the demand made in the show cause notice.
5. Shri D.M. Borade, Departmental Representative, submitted that the goods seized were not stove burners but they were forged parts of stoves which were not exempted and hence they were not entitled for the relief sought for by them.
6. We heard both the sides. The applicants had sought for exemption and the copy of the declaration discloses that after due verification, the Superintendent had issued the exemption certificate in Exhibit C at page 48. The applicants had also been enjoying the exemption. In the Trade Notice issued earlier, semi-finished brass forgings have been classified under Item 68 and the rulings also disclose that similar items are classifiable under Item 68. Prima-facie, the applicants have argued that by drilling holes in the nuts, which are fixed on the burner parts there is no change in the product and do not assume a new character and there is no manufacture and that the applicants have not suppressed any information. Further, they have submitted that they are also a small scale industry. The second show cause notice appears to be time-barred. However, the first show cause notice appears to be in time.
7. Considering the materials before us, we are of the opinion that it is a fit case for stay. However, the applicants should deposit the amount called for in the first show cause notice Rs. 7,247.21 P. within four weeks of the receipt of this order. On the applicants depositing this amount, the amount demanded in the second show cause notice of Rs. 1,03,834.01 P. shall be dispensed with and recovery thereof stayed till disposal of the appeal.