Customs, Excise and Gold Tribunal - Delhi
Collector Of C.E. vs Supreme Rubber And Allied Industries on 26 July, 1988
Equivalent citations: 1988(18)ECR603(TRI.-DELHI), 1988(37)ELT264(TRI-DEL)
ORDER K. Prakesh Anand, Member (T)
1. This isa matterwhere the respondents who were manufacturing Rubber sheets, falling under Central Excise Tariff item No. 16A(2) and Rubber Hose pipes falling under Central Excise Tariff Item No. 16A(3) filed a classification list bearing No. 13/78 on 12.4.1978, and claimed exemption in respect of the hose pipes under Notification No. 71/78-C-E., dated 1.3.1978. This exemption was approved. Later on the department realised that the value of the clearances including Rubber sheets exceeded the ceiling limit prescribed In Notification No. 71/78 and therefore demanded differential duty from the respondents
2. In the Order-in-Appeal, the Collector (Appeals) concluded that since the classification list which had been duly approved by the proper Officer Included the declaration that the respondents (Appellants before him) were manufacturing Rubber sheets, which were exempted from payment of duty, and also forwarded to the Department a statement showing value of the clearances during the period 1.4.1977 to 28.2.1978, therefore there was no question of suppression of any facts or mis-statement with the intention to evade payment of duty. Collector (Appeals) also observed that the R.T. 12 Returns for the relevant period had also been finalised by the proper officer. Accordingly, Collector (Appeals) ordered that the time limit of six months prescribed In Rule 10 of the Central Excise Rules, was attracted and on that basis, the demand of duty was barred by limitation. It Is against this order that the Department has come up in appeal before us.
3. We have heard Shri V.M. Dolphode.SDR for the department and Shri A.Careem Khan, Advocate for the Respondents.
4. The Learned SDR has emphasised that the respondents had cleared goods in excises of Rs. 5 lakhs without payment of duty, which Included value of clearances of Rubber sheets and that there was nothing In the Notification to warrant exclusion of the value of goods cleared at Nil rate of duty under Notification No. 71/68. It is added that the respondents while filing their R.T. 12 Returns, did not furnish Information regarding Rubber sheets at Nil rate of duty under Notification No. 71/78. They also did not prepare gate passes for clearances of these goods. It is alleged that the respondents therefore contravened the provisions of Rules 52,54 and 173G(3) of Central Excise Rules inasmuch as the goods were cleared without cover of gate passes and also incorrect information was furnished in the R.T. 12 Returns. In view of suppression of facts, it is stated, the six months limitation did not apply In this case.
6. Responding, the learned advocate submitted that the classification list filed included all the Items manufactured. The Respondents were under the impression that exempted goods were not required to be cleared on gate passes. Finally, as an alternative argument, it is submitted that even if there was a violation of the Rules, it was only of a technical nature and the department has hot been able to establish that there was any intern to evade duty.Therefore, it is submitted, the demand for duty is barred by limitation.
6. We have carefully considered the facts of the case and submissions made before us. It is true that in this case the respondents had filed the classification list together with declaration which indicated that the respondents were manufacturing both rubber hose pipes as well as rubber sheets but that by itself cannot lead to the conclusion that there has been no suppression of facts. As per Notification No. 71 /78 dated 1.3.1978, the assessee could have the benefit of exemption of duty only in respect of goods of value not exceeding Rs. 5 lakhs. When an assessee makes a claim for a conditional exemption of this nature, he is under an obligation to pay the normal duty in respect of goods exceeding the limit provided in the Notification, the benefit of which has been claimed by, and allowed to, the assessee by the Department. If the assessee exceeds this limit of Rs. 5 lakhs, the onus is on him to commence paying duty in respect of further clearances as per the normal rate. If the assessee failed to do so, he cannot in his defence invoke the approval of the classification list which approved the exemption because the approval was conditional and limited to the value of clearances upto Rs. 5 lakhs as provided in the notification.
7. What is more is the fact that the respondents in this case cleared their rubber sheets without preparing and issuing gate passes. Again, the value of the clearances of rubber sheets cleared at nil rate of duty was not reported in the R.T. 12 Returns. All this cannot be so innocent, as it could be intended only to suppress the information from the department as regards the clearances in respect of rubber sheets with a view to avoid payment of duty. Accordingly, we hold that the Collector (Appeals) has erred in coming to the conclusion that there is ho question of any suppression of facts or mis-statement with intention to evade payment of duty and that the demand of duty is barred by the time limit of six months. We set aside the order and allow,the appeal.