Customs, Excise and Gold Tribunal - Mumbai
Mafatlal Fine Spg. And Mfg. Co. Ltd. vs C.C.E. on 2 June, 1997
Equivalent citations: 1997(94)ELT395(TRI-MUMBAI)
ORDER K.S. Venkataramani, Member (T)
1. The brief facts are that the appellant is a composite textile mill manufacturing among other articles Drill cloth. Under exemption Notification 226/77, there was 50% concession in duty in terms of proviso(v) of the Notification which covered drill as defined from time to time by Textile Commissioner for which maximum ex-factory prices have not been specified by the Textile Commissioner under the Textile (Control) Order, 1948. Proceedings were initiated against the appellants by issue of show cause notice dated 29-7-1981 alleging that the drill fabric cleared by the appellants during the period October, 1978 to November, 1979 was not in conformity with the Textile Commissioner Notification of 1968 and therefore the appellants were not eligible to clear the drill cloth under the concessional rate in Notification 226/77. During the adjudication proceedings by the Commissioner Central Excise, Mumbai-I, the appellant in their defence relied upon the Tribunal decision holding that the notification covered drills of the type manufactured by the appellant which is called 4-harness drill. They further contended that Commissioner (Appeals) in a group of 27 appeals had held that as regards the drills which were other than grey, bleached or dyed, the demand in respect of the same can be enforced but only for the normal period of six months under Section 11A of the Central Excise Act. Ultimately, the impugned order dated 27-2-1991 came to be passed by the Commissioner holding that the drill cloth of the type manufactured by the appellants in so far as it related to grey, bleached and dyed were covered by Notification 226/77 and dropped the demand in respect of such drill cloth which amounted to Rs. 12,74,325/-. However, the Commissioner confirmed a demand of Rs. 6,93,913/- on the ground that the same represented drills other than grey, bleached and dyed. Hence this appeal.
2. Shri Ajit Bhatt, Asstt. Secretary of the appellant was present and we have heard Shri V.K. Puri, ld. SDR. The appellants have contented that the demand confirmed by the Commissioner in the impugned order is hit by limitation because the demand notice was issued in July, 1981 for the period October, 1978 to upto November, 1979 and they have further relied upon the order of the Commissioner (Appeals) in which the Commissioner (Appeals) has held that drill cloth in grey, bleached or dyed conditions will be eligible for exemption whether or not they answered to the description of controlled drill or otherwise. The Commissioner (Appeals) also held that in respect of other drills i.e. to say other than grey, bleached or dyed, no differential duty shall be payable on the clearances made beyond the period of six months from the date of issue of show cause notices. The appellants contended that it was not proper on the part of the Commissioner passing the impugned order to follow the law laid down by the Tribunal only in parts. According to them the law has been well laid down by the Tribunal in the case of Commissioner v. Jayajeerao Cotton Mills - 1984 (15) E.L.T. 259 wherein it was held that since 4-harness drill satisfied both the conditions of proviso (v) the Notification 226/77 viz. that drill confirms to the Textile (Control) Order definition and no maximum ex-factory price was fixed by the Textile Commissioner in the said order, it was entitled to the concession. The appellants thus contend that the Commissioner was in error to have demanded the duty in this case which is beyond the time limit under Section 11A. Shri V.K. Puri, ld. SDR has urged that the Commissioner has followed the ratio of the Tribunal decision to drop the demand in respect of 4-harness drill and the confirmation of the demand is only in respect of other than those covered by the Notification.
3. We have carefully considered the submissions. The contention is only on limitation relating to the amount of demand confirmed in the impugned order. The contention is based on a decision of the Commissioner (Appeals) in a group of 27 appeals. That order of the Commissioner (Appeals) is not available on record. However, since the contention is on limitation, we have perused the show cause notice issued in this case which is in record. It is seen from the show cause notice that since the department was of the view that drill fabric cleared by the appellant during the disputed period was not in conformity with the Textile Commissioner Notification 1968, the clearances were found to be inadmissible and therefore RT12 were provisionally assessed under Rule 9B Central Excise Rules for the period October, 1978 to November, 1979 and were finally assessed vide Asstt. Collector's communication dated 22-6-1981. Assessed copies of the RT 12 were also given to the appellant from time to time. The Show Cause Notice gives details of the duty provisionally assessed and later on finally assessed. The show cause notice also mentions that since the amount of differential duty Rs. 19,68,238.88 demanded by the Asstt. Collector's letter of 22-6-1981 had not been paid and also no reply thereto was received, the present show cause notice was being issued, which is dated 29-7-1981. The show cause notice also invokes Rule 9B read with Rule 10 of Central Excise Rules and Section 11A of the Central Excise Act, 1944. From the above, it would appear that the show cause notice has been issued since the appellants did not respond for paying differential duty on finalisation of provisional assessment. In such a situation, the appellants cannot lawfully contend that the demand is hit by limitation since in the case of provisional assessment the limitation will run from the date of finalisation of the assessment. Therefore, this contention on limitation has to be rejected. However, there is also a plea raised that it is not clear how the Commissioner has arrived at the figure of 6,93,913.44 as the duty demanded in this case. It will be reasonable therefore to clarify to the appellant as to how the amount of duty on drill not covered by the definition of drill in the Textile Commissioner Order for the purpose of this case has been arrived in for which purpose the appellants may be given the work-sheet for the same because this break-up figure is not available in the Commissioner's order. The department may also give the., appellants such clarification in this regard as may be necessary.