Customs, Excise and Gold Tribunal - Delhi
United Oil Mill Machinery And Spares (P) ... vs C.C.E. on 21 December, 1995
Equivalent citations: 1996(82)ELT282(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. This is an appeal filed against the order-in-appeal No. 101-CE/DLH/86, dated 29-1-1986 passed by Collector (Appeals), New Delhi.
2. The learned counsel stated that the appellant is a private limited company registered under the Companies Act, 1956 and is engaged in the manufacture of Oil Mill Machinery and Spare Parts for use in vegetable oil mill industries. These goods are covered under Tariff Item 68 of the First Schedule to the Central Excises and Salt Act, 1944. Approximately, 90% of the production of the appellant is exported to various countries in the world, whereas the balance 10% is sold in the local market in India. The appellant has taken out a Central Excise Licence in Form L-4 and has been complying with all the formalities as contemplated under the various provisions of the said Act or the Rules made thereunder. The appellant on the advice of the local Central Excise authorities sought for the permission to work under Rule 56C of Central Excise Rules, 1944 and the permission in respect thereof was granted by the competent authority on 20-8-1981. The appellant was availing exemption under Notification No. 105/80 and was not aware that in case it avails of the procedure as laid down under Rule 56C, the benefit under Notification No. 105/80 was not available to it. Since the local Central Excise authorities had verbally confirmed to it that such benefit shall be available to it in spite of the fact that it was availing of the Rule 56C procedure, the appellant availed of the Rule 56C procedure upto 3-7-1982. The appellant filed classification list effective from 1-4-1982 and sought for the exemption under Notification No. 105/80. The said classification list was approved by the competent authority after making necessary enquiries under Rule 173B of the said Rules but however on 26-3-1983, a show cause notice was issued to the appellant for the period from 11-3-1982 to 3-7-1982.
3. It was their contention that the Collector had failed to appreciate that the demand had been raised under the show cause notice dated 26-3-1983 under Section 11A of the said Act and the proviso to Section 11A(1) had not been invoked therein. Accordingly, the time period for the demand could be taken as only six months and not five years. In the show cause notice, no allegation had been made against the appellant that there was any short levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of the Central Excises and Salt Act, 1944 or the Rules made thereunder with intent to evade payment of duty. In support of his contention, he would like to cite the following cases :-
1. Raymond Woollen Mills Ltd. v. CCE, Bombay - 1984 (15) E.L.T. 243 (Tribunal).
2. Ganga Spinning & Weaving Mills, Ludhiana v. CCE, Chandigarh - 1983 (13) E.L.T. 1674 (Tribunal).
3. Motilal and Company, Thana v. CCE, Bombay - 1984 (15) E.L.T. 157 (Tri.).
4. Light Roofings Ltd. v. Supdt. of Central Excise, Kanchipuram and two Ors. - 1981 (8) E.L.T. 738 (Madras).
5. Escorts Ltd., (FED), Faridabad v. CCE, New Delhi - 1985 (22) E.L.T. 214 (Tribunal).
6. CCE, Kanpur v. Hindustan Scientific Glass and Fancy Glassware Works and Anr. - 1985 (21) E.L.T. 195 (Tribunal).
It was [submitted] that in view of the above decisions, the demand prior to the period of six months from the date of receipt of the show cause notice was fully time-barred.
4. Further, the Department itself has conceded that there was no suppression of facts inasmuch as the Assistant Collector of Central Excise, Division-I, Faridabad, under his order-in-original 32/85 passed under endorsement C. No. V(68) 3/31 /D/83/8719, dated 29-11-1985 has held that:
"The allegation of suppression of facts is not sustainable as the permission to work under Rule 56C was granted by the Divisional Office with a copy to Range Office. I, therefore, withdraw the demand amounting to Rs. 4,500."
5. Further, in the show cause notice, the provisions of Rule 173Q of the Central Excise Rules, 1944 had also not been invoked and accordingly no penalty had been imposed on the appellant. Actually, all the facts were known to the Department; including the request for the extension for the permission to work under Rule 56C under its letters dated 3-10-1981 and 27-11-1981. Indeed, the local Central Excise authorities were verifying and signing all the relevant documents.
6. Learned DR drew attention to the order-in-original and order-in-appeal and emphasized that the benefit of Notification No. 105/80 and the facility to work under Rule 56C cannot be simultaneously availed. However, the appellant claimed benefit of Notification 105/80 in the classification list and cleared the goods by wrongly getting the classification list approved with reference to this notification in spite of the fact that they were working under Rule 56C. There was suppression of facts involved inasmuch as they did not mention all the facts in the relevant classification list. Hence, the demand was not time-barred.
7. We have considered the above submissions. We observe that the order-in-original itself shows that permission to work under Rule 56C had been granted to the appellants on 20-8-1981, whether the permission was provisional or final did not matter as the fact that the appellant had requested for extending the permission had not been denied or disputed. In these circumstances, if a classification list was filed during the period, this permission was in force, it was open to the Assistant Collector to deny the benefit of Notification 105/80, if in his opinion, this benefit was not available in these circumstances. But in spite of it, he approved the classification list - a fact which has not been denied; Hence the appellant would not be charged with suppression or mis-statement of facts with an intention to evade duty. It is significant in this connection that another Assistant Collector vide order dated 29-11-1983 has observed inter alia that allegation of suppression of facts was not sustainable as permission to work under Rule 56C had been granted. This order relates to the period immediately following the period of demand in the present case but refers to the permission under which they were operating during the relevant period.
8. In the above circumstances, the extended period of time was not available to the Department. Hence, the demand was time-barred. As such without going into the merits of the case, the impugned orders are set aside and the appeal is accepted.