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TMI Blog1995 (2) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... ected payment of duty on clearances for the period from 18-10-1978 to 30-4-1979 under Rule 10 of the Central Excise Rules, 1944. The lower appellate authority vide his order dated 19-5-1987 upheld the Assistant Collector s order on classification; however, he set aside the demand on the ground of limitation as the show cause notice was issued after the expiry of the normal period of limitation of six months. Hence this appeal by the Revenue. 2. We have heard Smt. Ananya Ray, learned SDR. During the course of her arguments, learned Counsel Ms. Punita Singh appeared and requested that the matter be passed over. However, as the learned SDR was in the midst of her arguments we were not inclined to accede to the Counsel s request. After hearing the Department, an opportunity was extended to the Counsel for the respondents to make the submissions in reply. However, the learned Counsel only reiterated her request to await her seniors arrival, but we were not inclined to wait any further. 3. The letter of the Superintendent, Central Excise dated 4-5-1979 addressed to the respondents reads as follows : Letter No. C.Ex/RV/M.Batches/79/60-A, Bombay, 4th May 1979 from the office of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 6. I observe that in this case the show cause notice was admittedly issued more than six months after the relevant period and a question has arisen whether it was time barred. 7. The learned DR has argued that since the appellants had withheld the relevant information and deliberately delayed the issue of show cause notice, therefore, the date of Superintendent s letter dated 4th May 1979 could be taken as the relevant date for calculating the time bar and the Department was entitled to invoking the extended period of time. 8. However, I find that the respondents had in fact replied to the Superintendent by their letter No. PVC/CX. 247/79, dated 6th June, 1979, a photocopy of which has been filed. This letter specifically refers to the Superintendent s letter of 4th May, 1979 and projects the respondent s point of view. It contests the Department s contention and incorporates detailed submissions in support of the respondent s view. 9. It appears from this exchange of correspondence and the order-in-original read with reference to this context that after the budgetary changes in 1977, a difference of opinion arose between the respondent and the Department regarding the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of extended period of time was also not available to the Department and only normal period of limitation with reference to the period to which the clearances relate was only available to the Department. As such I consider that the Collector (Appeals) was right in holding the case as time barred. I, therefore, reject the appeal. 14. (Before parting I may mention that the Classification Lists filed by the D.R. under her letter dated 17th May, 1993 are not relevant as one of them, dated 30th June, 1977 relates to the previous period and the second dated 7th May, 1979 relates to the subsequent period, that is both of them do not relate to the relevant period). Dated : 10-9-1993 Sd/- (S.K.Bhatnagar) Vice President DIFFERENCE OF OPINION 15. In view of the difference of opinion between the Hon ble Judicial Member and the Vice President, the matter is submitted to the Hon ble President for reference to a third Member on the following point : Whether in view of the facts and circumstances of the case, the show cause notice was time barred or within time. Dated : 13-9-1993 Sd/- (Jyoti Balasundaram) Member (J) Sd/- (S.K. Bhatnagar) Vice President 16. [Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was no suppression. In the Trade Notice, appearing at page T 65 of 1979 (3) E.L.T.; it had been clarified that PVC and Polyethylene Master Batches were liable to duty under Item No. 14-I (ii), and not under Item No. 15A of the Central Excise Tariff. In the Show Cause Notice, there was no allegation of any mis-representation on the part of the assessee. Earlier the Superintendent of Central Excise had written a letter on the subject which was duly replied. This letter by the Superintendent of Central Excise was not in the nature of a notice, and the change in the classification was proposed without any hearing. The Ld. Advocate submitted that the demand was invalid, and the post facto Show Cause Notice and hearing will not make it valid. He stated that in the circumstances of the case even six months period for raising demand was not available, as held by the Supreme Court in the case of Union of India v. Madhu Milan Syntex Pvt. Ltd. - 1988 (35) E.L.T. 349 (SC). Reliance was also placed, with regard to limitation, on the Supreme Court decisions in the cases of (1) Collector of Central Excise, Baroda v. Kosan Metal Products Ltd. - 1988 (38) E.L.T. 573 SC; and (2) Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , falling under item No. 15A under which they were eligible for exemption, vide Notification No. 206/77-C.E., dated 29-6-1977. The assessee pleaded as under :- Pending final decision about the excisability of the Master batches under Tariff Item 15A as classified so far, or under Tariff Item 14-I(ii) as conveyed in the Trade Notice, we may be allowed to avail of the exemption of duty thereon as hitherto under T. Item No. 15A. If however, we are compelled to pay excise duty on such products under Tariff Item 14-I(ii), we will do so under protest reserving our right to claim refund if on final decision the classification under Tariff Item 15A is upheld. It is seen that the classification list filed on 7-5-1979 was approved on 9-7-1979. Subsequently the notice to show cause was issued on 5-7-1980. 23. The above narration, as well as the discussion that follows, would show that it was less a case of suppression of the facts/clandestine removals, and more a case of difference in assessment practice in which the department was not sure on its own stand and the classification in respect of the PVC Master Batches as proposed by the Department under Item No. 14-I of the Tariff had n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had claimed assessment under Item No. 15A(1)(ii) of the Tariff as PVC compound. The Revenue had considered them assessable under Item No. 14-I(ii) as pigments. It appears that until April, 1979, the goods were being assessed under Item No. 15A(1)(ii), and that it was only after the issue of a Tariff Advice that the practice of assessment was changed. The Tribunal had held them to be classifiable under Item No. 68, and not under Item 14I(ii) of the Tariff. (refer para 15A of the case of National Organic Chemicals (supra). This decision was followed by the Tribunal in the case of Kirit Packaging Industries Ltd. v. CCE, Order No. 128/88-C, dated 19-2-1988 [since reported in 1988 (35) E.L.T. 414 (Tri.)] (also refer 1990 (47) E.L.T. 431 (Tribunal). 25. It is thus seen that there [has] been difference of opinion with regard to the classification of the PVC master batches and that the classification as convassed by the Revenue has not been agreed upon by the Tribunal. In the circumstances, I agree with the Ld. Vice President that the extended period of limitation was not available to the Revenue for raising the demand of Central Excise duty, and that the appeal by the Revenue is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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