9911796707
TMI Blog1991 (9) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... same compound, namely, (1) M/s. Patel Industries; (2) M/s. Hose Pipe Industries; (3) M/s. Parbhani Enterprises; (4) M/s. Laxmi Industries; and (5) M/s. Maharashtra Pipe Industries. On 24-8-1984, Shri Nilesh Kumar R. Patel, partner of the appellants, gave a statement saying that cotton hose pipe is supplied by other four units and after rubberising/lining a hose pipe is dispatched by them to outside parties as per the directions of grey hose pipe manufacturers, after charging labour charges for rubberising. He also said that they do not have separate electric connection for working compressor and electric motor and that the power connection is obtained from the premises of M/s. Patel Industries. He, further, stated that since April, 1984, they have installed a small electric motor of 1/8 H.P. which is used for stirrer for mixing rubber compound. He also admitted that he did not inform the Central Excise Department about the manufacture of rubberised/rubber lined cotton hose pipes with the aid of power and had not taken licence. One Sh. B.N. Kulkarni, Manager of M/s. A.P. Patel Co., in his statement on 12-9-1984, said that he had transferred one compressor with one electric motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants had not been given adequate opportunity of defence and cross-examination of witnesses, the Ld. Counsel pleaded that the case should be remanded to afford them such an opportunity. On merits, the Ld. Counsel submitted that only one electric motor was used for stirring operations and the compressor was used only for blowing operations. Therefore, it was contended that there was no process of manufacture carried on with the aid of power. The Collector s order merely follows the grounds set out in the show cause notice. There is no finding on the use of power, electricity consumed and the electricity bills paid by the appellants. The Ld. Counsel contended that even the statement of Nilesh Kumar Patel dated 24-8-1984 would only say that they have started using electric motor from April, 1984. In such a case, the duty demanded for an earlier period is questionable. It was also urged that the compressor acquired by the appellants was a condemned one and not serviceable and the electric motor was also old. It was also submitted that if the goods are classified under Item 16A of the CET, they will be eligible for duty exemption under Notification 18/74. The further submission was tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, is whether there is any scope for remand of the case to the Collector on the ground that the appellants had not been given adequate opportunity of defence. The records show that there is only one interim reply dated 23-4-1985 to the show cause notice given by the appellants, in which they have stated that they had desired a personal hearing and cross-examination of all the witnesses such as Panchas, Seizing and Investigating Officers and others on whose evidence reliance may be placed in adjudicating the case. It is, further, stated in that letter that they denied the charges and that the detailed reply, if found necessary, will be filed within the extension of time requested in that letter. The records also show that the Collector had given them time as requested and further extension. The Collector s observation, in this regard, are as follows: No reply was received from the party. The consultant of the party, Sh. H.C. Jain furnished an interim reply and requested for granting time of about 8 weeks, for submitting a detailed reply to the show cause notice. As per the request of the consultant, extension of time was granted to reply to the show cause notice and he was info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en given an initial extension of time and further extension which also was allowed to run out by the appellants and no detailed reply was filed by them and in such circumstances, it was not unreasonable for the Collector to have proceeded to adjudicate the case without affording them any further opportunity. Therefore, we are unable to agree with the appellants plea that there has been failure to comply with the principles of natural justice. On merits, the statement of the partner of the appellants, Sh. Nilesh Kumar Patel, is clear to say that since April, 1984, they had installed electric motor of 1/8 H.P. which is used for mixing/stirring the rubber compound. He had also not denied the use of compressor. The statement of Sh. R.M. Patel confirms the supply of the electric power to the appellants from their motor. The acquisition of the compressor and electric motor has also been confirmed by the statements of Sh. B.N. Kulkarni dated 12-9-1984 and Md. A. Najib dated 12-9-1984. The contention of the appellants that the electric motor and the compressor were not used beyond August, 1984, does not help them because the demand in this case is only up to August, 1984. Sh. K. Jangle, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable for the Collector to examine this aspect of the case and to ascertain whether such a claim is established by satisfactory evidence and to redetermine duty demand if need be on that basis. This will be for the period April, 1983 (when the appellants by then acquired the compressor) to April, 1984 (when the electric motor for mixing/stirring of rubber compound was used). 7. Another aspect which needs to be looked into and finding by Collector to be given is on the classification of the goods. The Collector has classified them under Item 19-I(b) C.E.T. which covers inter alia cotton fabrics subjected to the process of rubberising. However, in the appeal before the Tribunal, it has been contended that according to the Test Report of the Dy. Chief Chemist on the product the rubber compound content ranged between 8.25% to 11.49%. Their claim is that the goods are correctly classifiable under Item 16A(3) CET which covers piping and tubing of unhardened vulcanised rubber and they also claim exemption under Notification 18/74 dated 23-2-1974 for the reason that rubber compound content is less than 25% by weight. It is seen that Collector has not given detailed reasoning for cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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