9911796707
TMI Blog1991 (6) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... the period 1981-82, 1982-83 and 1983-84 upto 3-11-1983. The appellants were served with a show cause notice by the Assistant Collector asking them to show cause as to why duty amounting to Rs. 53,392-50 should not be recovered from them on the clearances of Power Driven Pumps during the year 1982-83 and 1983-84 (upto 3-11-83) in excess of the limit of Rs. 7.5 lakhs for duty free clearances during any financial year under Notification No. 80/80-C.E., dated 16-9-1980. In their reply to the show cause notice the appellants denied that pumps refuelling manufactured by them were assessable under Tariff Item 30-A as power driven pumps. They contended that their goods being classifiable under Tariff Item 68 no duty was recoverable for them during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circulated in the form of Patna Collectorate Trade Notice No. 25/2/1969 dated 28-3-1969. Shri Gujral stated that the appellants acted under the bona fide belief that their product being classifiable under Tariff Item No. 68 and their clearances being below Rs. 30 lakhs neither any duty was attracted nor was any licence required to be obtained. He contended that under these circumstances the Additional Collector s order confirming the demand and imposing penalty was unjust. He argued that there being no wilful suppression of facts or mis-statement on the part of the appellants, the extended period of limitation could not be invoked whereas the adjudicating authority had done so without assigning any reason. In support of his contentions, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evading duty. In support of the points made by him Shri Arora quoted the following case law :- (i) British India Corpn., Dhariwal v. CCE, Chandigarh [1986 (25) E.L.T. 727] (ii) Paxma Axle Springs (P) Ltd. v. CCE [1990 (47) E.L.T. 639] 4. Dealing with the points made by Shri Arora, Shri Gujral stated that the appellants product could not be deemed as power operated simply because of use of a battery. He contended that the question whether a machine is power operated has to be decided in terms of Section 2(g) of the Factories Act. He added that the Tariff Advice issued in 1981 to the departmental officers could not over-rule the public notice issued in 1969 on the basis of Boards instructions. He reiterated his stand that there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this regard we find that the refuelling pumps in question incorporated an electric motor which was admittedly operated by electric power provided by a battery. We are, therefore, of the view that they could be deemed as power operated. In this regard it is seen that the term power is defined in Sec. 2(g) of the Factories Act as :- electrical energy or any other form of energy which is mechanically transmitted and is not generated by human or animal energy. Since the pump was operated by a battery which provided electrical energy and such energy was converted into mechanical energy by a DC motor, it follows that even in terms of the definition of power in the Factories Act, the refuelling pumps manufactured by the appellants c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1944 we find that the appellants case is that they had not paid duty on the clearances in excess of the exemption limit of Rs. 7.5 lakhs on the bona fide belief that the refuelling pumps manufactured by them were not classifiable under Item 30A of the Central Excise Tariff. They have contended that there can be no finding against them of wilful suppression of facts or mis-statement with the intent of evading duty since even in accordance with the Board s instructions dated 23-4-1969 conveyed to the trade through Patna Collectorate Public Notice dated 28th March, 1969 pumps designed for dispensing fuel were not chargeable to duty under Item 30-A of the Tariff. On the other hand the learned JDR has contended on behalf of the Department th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence in case where there was scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable or not would not attract Section 11A of the Act. In the facts and circumstances of this case, there were materials as indicated to suggest that there was scope for confusion and the appellants believing that the goods came within the purview of the concept of handicrafts and as such were exempt. If there was scope for such a belief or opinion, then failure either to take out a licence or to pay duty on that belief, when there was no contrary evidence that the producer or the manufacturer knew that these were excisable or required to be licensed, would not attract the penal provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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