9911796707
TMI Blog1987 (9) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... liberately suppressed facts with a view to avail of the exemption to which they were not entitled, the Additional Collector of Central Excise rejected the plea of time bar and demanded the duty of Rs. 59,167.68 on the goods cleared and also imposed a penalty of Rs. 5,000/-. 4. We observe from the record of personal hearing granted by the Additional Collector that appellants had admitted that they had used only white pulp board in the manufacture of corrugated board. They did not use duplex board or bituminised paper or corrugating medium of 65 gms. or above. Further they offered to pay the duty of 5% on the corrugated board manufactured and cleared by them. 5. In their appeal before us, however, appellants have taken a completely differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered to have discharged its duty liability, and when any further corrugated board is manufactured out of the 2 ply corrugated board, such board should continue to be exempt from the duty. In the light of the facts it is also urged that there is no suppression of facts and therefore demand for duty is also barred by limitation. 8. The facts of the case and the submissions made have been carefully considered. For facility of reference the relevant notification, the benefit of which is claimed by the appellant is reproduced below : In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the Notification No. 135/67-C.E., dated 3-7-1967, the Central Government hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6A of the Central Excise Rules, 1944 in respect of duty paid on base paper or board, or (ii) the exemption granted under the notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. 67/76-Central Excises, dated the 16th March, 1976 : Provided further that where corrugated board has been produced - (a) wholly out of kraft paper or out of paper and paper board of the type known as kraft liner or corrugating medium of a substance equal to or exceeding 65 grammes per square metre; or (b) partly out of kraft paper referred to in Clause (a) and partly out of bituminised paper or duplex board. on which the appropriate duty, if any, has been paid, then, such corrugated board shall be exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r determination is the entitlement to exemption of the finished product not the intermediate product, that is, 2 ply corrugated board. It is fallacious to argue that the final product should be exempt from duty because at the intermediate stage a product comes into existence which qualifies for exemption. It is equally fallacious to argue that further processing of exempted goods does not attract duty. The question remains as to what is the final product which is manufactured and liability to duty will have to be determined on the basis of whether the final product as such qualifies for exemption or not. 10. There is no doubt whatsoever that the final products contain inputs which are not covered under the relevant exemption notification. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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