Customs, Excise and Gold Tribunal - Tamil Nadu
B.H.E.L. vs Commr. Of Customs And Central Excise on 3 April, 2000
Equivalent citations: 2000(70)ECC54
ORDER V.K. Astana, Member (T)
1. In this appeal against Order-in-Original No. 18/97 dated 5.7.97 passed by Commissioner, the issue involved is classification of Grinding Rolls and segments used in bowl mills. The order impugned invoked proviso to Section 11A(1) and ERvide notice dated 5.12.95 covering the period August 1991 to February 1994 confirmed duty demand of Rs. 1,98,57,624.50 and imposed penalty of Rs. 75 lakhs as also interest under Section 11AB. Appellants have deposited the entire duty under protest and vide Stay Order No. 222/99 dated 9.11.99, the Tribunal waived the pre-deposit of remaining penalty etc.
2. Heard Shri M.S. Rajappa, Ld. Consultant who submits that the question of classification of Grinding Rolls has developed chronologically as follows:
(a) Upto 18.12.90, it was classified under 8404 and approved accordingly.
(b) From 18.12.90 to September 1992, appellants changed from 8404 to 7325.20 as Alloy Steel Castings which also was approved.
(c) From 19.10.92 appellants reclassified under 7325.10 as Iron Castings by letter dated 19.10.92 addressed to the Superintendent. They had given reasons as to why this classification was being changed.
3. The queries raised by the Range Superintendent vide his letter dated 17.11.92 was replied again by the appellants vide letter dated 5.12.92 thereupon classification list was approved by the competent authority on 27.1.93. He further submits that this fact has been recognised by the Ld. Commissioner in para-8 of his order impugned wherein it has also been recorded that the concerned Asst. Collector visited the factory and after satisfying himself about the correct classification, he has accorded due approval. Therefore, Ld. Consultant submits that despite this actual disclosure of all details and despite their reply to the queries raised by the range Superintendent and further visit of the Asst. Collector to see the product himself and then approved the classification list, the department has still invoked proviso to Section 11A(1) of the Act on the ground of suppression and issued omnibus show cause notice dated 4.12.95 answerable to Commissioner whereas earlier the department had issued three show cause notices covering the same period namely 10.2.93, 15.11.93 and 27.4.94 which have not been adjudicated upon. He submits that as against this, the Order-in-Original impugned simply invoked the extended period on the following grounds:
At that stage, there was no occasion for the department to examine the issue as raised in the present show cause notice. BHEL did suppress the fact that the grinding rolls are component part of the Bowl Mills. I am, therefore, convinced that proviso to Sub-section (1) of Section 11A ibid has been rightly invoked in demanding duty during the extended period.
4. Ld. Consultant submits that these are very bald findings as neither their letters referred to above to the Range Superintendent explaining as to why it was reclassified as Iron Castings, nor their subsequent reply to queries of the range Superintendent and certainly not the visit of the Asst. Collector to personally verify the goods, has been discussed and properly considered by the Ld. Commissioner in the order impugned. He has simply stated that these issues as raised in the show cause notice were not considered by the department earlier. This is not correct inasmuch as that the nature of the product was fully examined both by the Range Superintendent as well as the Asst. Collector and no other issues have been raised in the matter other than the nature of the product to be classified. Therefore, the order impugned is a non-speaking order and on the other hand appellants have got a very strong case on merits. He relies on large number of citations to this effect in his written submissions.
5. Heard Shri S. Kannan, Ld. DR
6. We have carefully considered the rival submissions and records of the case. We find that the order impugned is a non-speaking order inasmuch as that while the Commissioner has simply made a categorical observation that appellants have suppressed the actual use and nature of the product, he has not even discussed the nature or the use of the product as disclosed to the Range Superintendent vide the above letters noted above as also the visit of the Asst. Collector to personally verified the issue. That being so, the order impugned is a non-speaking order and needs to be set aside and the matter' remanded for de novo consideration. Ordered accordingly.
7. While considering the matter in de novo proceedings, Ld. Commissioner is directed to also examine the citations placed before us in the written submissions by Ld. Consultant, after hearing them. Again, Ld. Commissioner should also examine the applicability of the Hon'ble Apex Court judgment in the case of CCE v. Cotspun Pvt. Ltd. as in 1999 (113) ELT 353 (SC). The appeal is therefore allowed by way of remand.