1998 (12) TMI 152 - AT - Central Excise

Summary

Issues:
1. Whether the activity of punching plastic/paper sheets for dobby cards amounts to manufacture under specific CET sub-headings.
2. Whether the demand for the specified period is barred by limitation.

Analysis:

Issue 1 - Manufacture of Dobby Cards:
The Appellate Tribunal considered the process of punching plastic/paper sheets to create dobby cards used in looms for fabric design. The appellant argued that punching does not constitute manufacture as they purchase unpunched cards for design purposes. In contrast, the Department contended that punching transforms the sheets into a new commercial commodity with distinct characteristics. The Tribunal examined the manufacturing process, noting that the dobby cards created in the factory have unique properties different from raw materials. It concluded that the test of manufacture is met, as the dobby cards serve a specific purpose in fabric design. The classification under CET sub-headings for plastic and paper dobby cards was affirmed based on the raw material used. The Tribunal upheld the Additional Collector's classification and duty demand, as the appellants did not challenge the classification but disputed the manufacturing process.

Issue 2 - Limitation:
Regarding the limitation, the Tribunal found the charge of suppression valid due to the appellants' lack of licensing, record-keeping, and duty payment for dobby card manufacture. Despite regular visits by Central Excise officers, the Tribunal deemed the appellants' actions as deliberate suppression of information to evade duty payment. Consequently, the Tribunal agreed with the Revenue that the appellants willfully concealed dobby card manufacturing, justifying the extended period for demand. The imposed penalty of Rs. 5,000 on the appellant was deemed appropriate based on the findings related to the limitation issue.

In conclusion, the Appellate Tribunal upheld the impugned order, rejecting the appeal and affirming the duty demand, classification, and penalty based on the determination of both issues.