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TMI Blog1990 (7) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ending machine, which is a horizontal power press, give it a U-shape. The U-shape rod is again put on the horizontal power press to give another U-bend to the rod at a different angle; thereafter the piece is put into a vertical power press to convert it into a desired shape. After the oil dip, it is given heat treatment in an electric furnace at a required temperature to harden the same. After testing its strength it becomes final finished product i.e. Elastic Rail Clip." The adjudicating authority in view of the manufacturing process had taken the view that elastic rail clip was a distinct and identifiable finished product falling under T.I. 68. From the scrutiny of the records it was observed that the party had cleared the said excisable goods valued at Rs. 2,96,45,435.00 involving central excise duty of Rs. 22,89,044.46 during the year 1981-82 to 1985-86 (upto 18th December, 1985). On the basis of the above, it appeared that the party had contravened the provisions of Rules 9(1), 52A, 53, 173B, 173C, 173G, 174 and 226 of the Central Excise Rules, 1944 and a show cause notice was issued vide letter dated 28th February, 1986 requiring the appellant that as to why the goods manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the goods were exempt from duty. The Collector had examined the contentions of the appellants and had held that the appellants were manufacturing rail clips classifiable under T.I. 68 and clearing them during the relevant period without obtaining a central excise licence, without payment of duty leviable thereon and without observing the other requirements under the Central Excises and Salt Act, 1944. He was of the view that duty was recoverable under Rule 9(2) of the Central Excise Rules, 1944 and Section 11A of the Central Excises and Salt Act, 1944 and also liable to penalty under Rule 173Q of the Central Excise Rules, 1944. He had ordered the appellants to pay central excise duty to the tune of Rs. 22,89,044.46 and had also levied a penalty of Rs. 20,00,000.00 under Rule 173Q of the Central Excise Rules, 1944. 2. Being aggrieved from the aforesaid order, the appellants have come in appeal before the Tribunal. 3. Shri K. Kumar, the learned advocate has appeared on behalf of the appellants. He has reiterated the facts. Shri Kumar has argued that the period in dispute is 1981-82 to 1985-86 and the duty involved is Rs. 22,89,044.46 and penalty of Rs. 20,00,000.00. He ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lved, if his arguments are the same which were adopted by Shri P.S. Bedi, the learned consultant in the case of Paxma Axles Springs (P) Ltd. v. Collector of Central Excise, New Delhi vide order No. 2/90-B1 dated 29th July, 1989. 4. Shri M.S. Arora, the learned JDR who has appeared on behalf of the respondent, has pleaded that the matter is fully covered by an earlier judgment of the Tribunal in the case of Paxma Axle Springs (P) Ltd. v. Collector of Central Excise, New Delhi vide order No. 2/90-B1 dated 29th July, 1989 arising out of appeal No. 1240/87-B1 and as such, the appeal should be dismissed. Shri Arora has argued that there was contravention of the provisions of the Central Excises and Salt Act, 1944 as well as Central Excise Rules and as such, extended period of limitation has to be invoked. He has argued that the judgments of the Supreme Court cited by the learned advocate in the case of Padmini Products and Chemphar Drugs reported in 1989 (43) E.L.T. 195 (SC) and 1989 (40) E.L.T. 276 (SC) respectively are not applicable. In support of his argument, he has referred to a judgment of the Supreme Court in the case of M/s. Jaishri Engineering Co. (P) Ltd. v. Collector o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture has already been referred to Supra i.e. Steel rod is put to Horizontal Power Press to form a U-shape and another U-bend at a different angle is given. This is done as per the specification given by the railway. The Collector in his adjudication order laid stress on the requirements of the product to adhere to the specifications laid down by them. This is not a case of simple forging which can be used by any other purchaser, neither is it sold in the market as a distant article. It is meant for the railway track and has its own identity. The process involves a series of operations. 7. The bench had directed the appellants to submit the drawing of the product along with the contract, and the same was sent in their letter dated 11-9-1989. The drawing indicates the diameter measurement of the product as follows :- 4. The dia of finished clip measured in the curve shall be 20.20 mm minimum. 3. The dia of finished clip measured at Central leg small be within + 0.2 - 0.15. 2. Inspection Gauge at Drawing No. RDSO/T-1893 shall be used to check whether the tolerances actually achieved in the manufacture of clip are within the permissible limits. 1. All dimensions are in millim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jaishri Engineering Co. (P) Ltd. v. Collector of Central Excise, Bombay reported in 1989 (1) SCALE 602 = 1989 (40) E.L.T. 214 (SC) had held that extended period of limitation was applicable. The judgments cited by the learned advocate do not help him. Accordingly, we are of the view of that there was concealment and suppression and extended period of limitation is invokable in the instant matter and as such the appellants plea of time bar fails. 8. Now coming to the question of levy of penalty, we would like to observe that there had been clearances without payment of duty and the appellants did not obtain a central excise licence and have not observed other requirements under the Central Excises and Salt Act, 1944. The appellants had never applied for the central excise licence and had never brought to the notice of the department that they were manufacturing these goods. The appellants argument is that they had bona fide belief that these goods are not excisable in view of the Guest Keen Williams order-in-appeal No. 284/83(B) dated 17th November, 1983 passed by the Collector of Central Excise (Appeals), Madras. The order is of 1983, whereas the period in the instant matter p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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