1982 (1) TMI 191 - CGOVT - Central Excise

Summary

Issues:
1. Duty liability on acrylic spun yarn under Notification No. 133 of 77.
2. Time limit for raising duty demand under Rule 10.
3. Validity of declaration made by the petitioners.
4. Approval of classification list by the Assistant Collector.
5. Misquoting of Notification No. 85 of 77 in the show cause notice.

Analysis:
1. The case involved manufacturers of acrylic spun yarn who cleared goods without duty payment under Notification No. 133 of 77. A show cause notice was issued for duty demand as the petitioners failed to prove duty payment on the acrylic fiber used. The petitioners argued duty was paid, but evidence linking the imported fiber to their supply was lacking. The Assistant Collector upheld the demand, stating the petitioners failed to make a true declaration.

2. The petitioners contended that they followed the approved classification list and produced documents showing duty payment to the Superintendent. They claimed the demand was time-barred under Rule 10 since the Department did not object to the duty benefit during clearance. However, the Government found the petitioners' declaration was based on presumption, not substantiated by evidence, leading to a case of wilful misstatement extending the time limit for duty demand to five years.

3. During the hearing, the petitioners argued the declaration on duty payment was inadvertent, and the Department's staff were aware of the clearances. However, the Government noted the lack of evidence supporting duty payment satisfaction by the proper officer, rendering the declaration invalid. The Assistant Collector's approval of a general classification list did not confirm duty payment on the specific yarn in question.

4. The Government observed that the Superintendent's alleged satisfaction on duty payment could not have occurred before the date of document examination. The Assistant Collector's approval of the classification list did not indicate satisfaction with the duty-paid nature of the fiber. The absence of evidence showing the proper officer's satisfaction post-classification list filing negated the petitioners' argument of clearance knowledge by Department staff.

5. Regarding the misquoting of Notification No. 85 of 77 in the show cause notice, the Government deemed it inconsequential as the petitioners were heard, and the goods were only relevant to Notification No. 133 of 77. The Government upheld the duty demand, rejecting the revision application based on the lack of substantiated duty payment evidence and the invalid declaration made by the petitioners.