9911796707
TMI Blog1989 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... cut into individual pieces of towels. The cut pieces are then stitched and the towels so stitched are sold in the market. Other textile mills are also following this process of manufacture of towels. 2. Prior to 1-3-1986, the towels were classified under Tariff Item 19 of old Tariff Schedule as Cotton Fabrics and excise duty was paid accordingly. This was also in consonance with the CBEC Tariff Advice No. 26/80, dated 22-5-1980 clarifying that towels after having been cut and stitched are classifiable under Tariff Item 19 and not again under Tariff Item 68 as Made-up articles . After the introduction of new Central Excise Tariff Act, 1985 effective from 28-2-1986, the appellants filed the necessary classification lists showing the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were seized were lying inside the factory premises on the date of seizure. Hence Rules 9(2) and 173Q did not apply. In fact the seizure itself was illegal and no confiscation was warranted. As such the appropriation of Bank Guarantee towards redemption file was bad in Law. 8. The Principal Collector has himself held that proviso to Section 11A did not apply. As such he ought not be have imposed any penalty. As the Collector himself has held the demand as time-barred beyond six months, therefore, the amount calculated is itself wrong in terms of Collector s own orders. 9. It was further submitted that since some errors have evidently crept in the order of the Principal Collector, therefore, the appellants had moved an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it would be in order for the Collector to proceed with the encashment. 14. Furthermore the amount of 7 lakhs in question is sought to be recovered as a redemption fine which does not fall within the perview of Section 35F and there was no cause for seeking Tribunal s intervention on this count and, therefore, he opposes the prayer for a direction to the Collector in this regard. He, however, agrees that the Principal Collector himself has held the demand as time-barred beyond the period of six months and, therefore, in terms of the Collector s order itself the duty was payable only for a period of six months. Hence, the reasons for confirmation of demand for Rs. 3,70,265.95 are not celar and there appears to be some error in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the operation of the entire order may be stayed and the pre-deposit of duty and penalty may be waived. 17. We have carefully considered the submissions of both sides. We observe that the question of classification of towel and the rate of duty applicable was a matter which related to the very core of the case. It was debatable and could more appropriately be dealt with at the time of the hearing of the main appeal. In so far as the seizure of goods in R.G. 1 stock is concerned this was rather unusual and the department has not been able to clarify the position or suitably explain the reasons therefor although time and opportunity was given for the same. The Principal Collector s no response to the request of his own representative (apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 7 lakhs in lieu thereof is concerned we observe that the learned D.R. is correct in pointing out that it is outside the normal scope of Section 35F. 21. At the same time the learned Counsel has correctly pointed out that the Tribunal has the inherent power to give appropriate orders even in this respect in the interests of justice and in fact the Tribunal has exercised this power in suitable cases. However, this power is required to be exercised with great care and caution and only in rare and exceptional circumstances such as those where the purpose of appeal itself may be defeated or the appellant is in indegent circumstances or the order is palpably wrong or bad in Law or clearly beyond jurisdiction and an intervention is called ..... X X X X Extracts X X X X X X X X Extracts X X X X
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