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TMI Blog1988 (3) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise officers visited these factories and subsequently show cause notices were issued to all the appellants charging them that they had processed and removed the fabrics abovesaid without obtaining licence and without payment of duty though they were not entitled to do so on and after 24-11-1979. The reason was that on and after that date the benefit of exemption Notification No. 297/79 (in respect of man-made fabrics) and Notification No. 80/76 (in respect of cotton fabrics) was not available insofar as the appellants had carried out within the same factory certain processes other than the processes specified in the tables appended to the notifications. After receipt of reply and on adjudication the Collector of Central Excise, New Delhi in four cases and the Additional Collector, New Delhi in one Case under separate orders, held the charges established and confiscated the seized goods giving an option for redemption on payment of fine as indicated in the respective orders; demanded central excise duty and handloom cess as indicated in the several orders and also imposed penalties. These appeals are against the said orders. 3. As earlier mentioned, all the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words as they stand in the notification, since the said words are clear and application thereof in the normal manner would not lead to either absurdity or any unworkable situation. 6. We are, therefore, satisfied that the words of the notification should be read as they stand and then applied to the facts. There is no dispute that if this is done the removals by appellants 1, 2, 3 and 4 during the period covered by the show cause notices should have been done on payment of duty only and since the same was not done the demand was justified. 7. So far as the demand for payment of handloom cess is concerned, some arguments were advanced initially on the basis that as the levy was on cloth as defined in Section 2(b) of Act 12 of 1953 and there was no such word as cloth in the first schedule to the Central Excises and Salt Act during the relevant period the demand was not justified. But, on a subsequent hearing, Shri Lachman Dev himself conceded that under the Finance Act of 1955 and later under the Finance Act of 1960 the definition of cloth" had been suitably amended. In view thereof the above argument cannot be sustained. Shri Sood for New Fine Dyeing however, submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g carried out by the appellants openly, had also not taken any action for a period of nearly 5 years and had suddenly initiated action in June 1984 and followed it up with the the show cause notices. It is pointed out that the Collector himself in his several orders had expressed his sympathy to the appellants indicating that he was aware that they had been acting bona fide. For the department it is urged that there had been intentional evasion by suppressing the fact of manufacture leading to excisability and hence the larger period of limitation was available to the Department. 10. The Collector has observed in the several orders that a clear case of suppression of facts has been established. He has further observed that no business can be conducted by really illiterate persons and the appellants were not such persons since they had been maintaining accounts, issuing receipts, etc. He had also observed that ignorance of law will not be an excuse and it was not the duty of the Department to make enquiries of all persons who might possibly be manufacturing excisable goods. 11. The fact remains that these appellants had been carrying on the same work for a long time before 24-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise officers. It is not as if they have been informed that, consequent on the issue of two notifications on 24-11-1979, they have become liable to payment of excise duty and were carrying on the said manufacture activity thereafter also without payment of duty. The first occasion the department appears to have told them of this was after the visit by the officers in June 1984, nearly five years after the issue of the two notifications. In these circumstances we are inclined to hold that the failure on the part of the appellants to take out a licence, or to pay duty, was due to a bona fide mistaken impression on their part and not due to any mala fide intention of evasion of duty. In any event this would appear to be a case where the benefit of doubt should be extended to the appellants. We, therefore, hold that the demands under the respective show cause notices could be enforced only for removals within a period of six months preceding the respective show cause notices. 13. So far as the 5th appellant (K.D. Processors) is concerned it is claimed that they were not at all, in any event, liable to payment of duty. This is on the ground that the only activity carried out by them w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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