Customs, Excise and Gold Tribunal - Delhi
Kosan Industries P. Ltd. vs Collector Of Central Excise on 8 October, 1997
Equivalent citations: 1997(96)ELT49(TRI-DEL)
ORDER K. Sankararaman, Member (T)
1. The appeal by M/s. Kosan Industries P. Ltd. is directed against the Order-in-Original passed by the Additional Collector of Central Excise, Baroda, confirming a duty demand of Rs. 73,213/- and imposing a penalty of Rs. 10,000/- on them. The said decision was taken by the adjudicating authority on the ground that the appellant had manufactured and cleared certain medicaments attracting classification under Central Excise Tariff Item 3301 liable to duty at 20% ad valorem.
2. Arguing the case of the appellant, Shri R. Parthasarathy, learned Counsel states that he is mainly stressing the time limit aspect. Clearances of the goods in question had taken place during the period 1-4-1987 to 31-3-1990 whereas the show cause notice has been issued on 30-5-1991. They had filed classification list for the subject goods claiming classification thereof under sub-heading 3005.90. The Assistant Collector amended the declared classification to 3003.30 and changed the declared rate of duty of 15% to nil rate. Guided by this decision of the Assistant Collector on the classification list filed by them, they went on clearing the goods during the disputed period without payment of duty. The show cause notice was issued much later alleging suppression. The learned Counsel contends that from the facts stated by him, it would be clear that there was no suppression on their part as they had declared the goods which were of pharmacopial grade and it was the Departmental direction that they were not liable to duty that had prompted them to clear goods without payment of duty.
3. In reply to the arguments advanced in support of the appeal, Shri Madan, SDR states that the relevant facts required to be furnished in the classification list had not been revealed. The goods in question are Cineole and Eucalyptus Oil. These were being cleared by the appellants in bluk in 180 kg. packing. This did not satisfy the requirement of Note 2 of Chapter 30 governing classification of the goods under 30.03 and 30.05. Had the appellants disclosed the full facts that they were clearing the goods in bulk, the Department would have been enabled to classify the goods under the correct classification. The Department's wrong classification of the goods under 3003.30 was caused only by the lack of proper description in the classification list and this amounted to suppression as has been held in the impugned order. In the circumstances, he supported the adjudication order and pleaded that same may be upheld and the appeal dismissed.
4. We have taken note of the submissions of both sides. We have perused the record. As come out during the arguments, the appellants had filed the classification list declaring the description of the goods as 'Cineole British Pharma Copia' and Eucalyptus Oil BPC. They had also reproduced the Tariff Heading 3005 reading Pharmaceuticals not elsewhere specified. This was amended by the Departmental officer to refer to 30.03 and the relevant Tariff description for the main Heading and the Tariff sub-heading 3003.30 for the two items in question. More significantly, the rate of duty declared by them as 15% was amended to read as nil. This act on the part of the officer Was a conscious one exercised in terms of Rule 173B which enjoined upon him to carry out necessary investigation or study. It is not as if the declared classification was accepted and that led to the short levy. The non-levy in question arose after a conscious decision taken by the Assistant Collector indicating nil rate of duty. As regards the finding in the impugned order about suppression and the support thereto given by the learned DR in the course of his arguments that the appellants had failed to disclose that fact that the mode of packing of the goods was not declared, we find that along with the classification list filed by them, they had also filed price list which had also been received by the Departmental Officers and endorsed by them. In the price list which have been filed by them in the appeal papers which bears No. 1408, dated 27-6-1989, there is a claim by them that excise duty is exempt as per Notification 32/89 and this contains an endorsement by the Departmental officer. In this price list, there is a reference to the packing of the goods of 180 kgs. Though it was contended by Shri Madan when this was brought to his notice by the Bench that for classification purpose, it is the classification list that is material and any declaration filed in any other documents like price list, etc. will have no bearing and that their intimation of the documents in the price list does not absolve them of the need to have furnished proper declaration in the material document viz. classification list. We also take note of the fact that in the reply to the show cause notice, the appellants had brought it to the notice of the adjudicating authority that they had been filing NIL RT12 for the disputed items and this return was assessed and returned by the officers. It was the contention of the learned Counsel that in spite of the clear claim, there is no finding by the adjudicating authority and he had not adverted to the submission that there was no suppression of facts on their part. We agree with the plea raised that the facts of the present case do not point to the existence of the factors which would justify invocation of the longer period of limitation. In this view of the matter, we hold that the demand confirmed by the Additional Collector was totally beyond the period of limitation of six months and hence set aside the order demanding duty and imposition of penalty. The appeal is allowed.