9911796707
TMI Blog1997 (7) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... On 28-9-1997, the jurisdictional officers visited the factory. Being of the prima faice opinion that the towels made out of towelling fabrics attracted further duty under Heading 6301 and on the observation that such towels were cleared without payment of such duty and also since a separate licence was not obtained for such resultant goods, the officers seized the stock of such made-up articles totally valued at Rs. 67,45,192.48. After due investigation, a show cause notice dated 28-3-1988 was issued. The Principal Collector after hearing the assessee passed the impugned order dated 27-7-1989. In this order, he dropped the demand for duty leviable on the yarn as well as the fabric which went into the manufacture of towels which were subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime limit for demand could not be invoked. 4. We have examined the judgments as also the findings of the Principal Collector. In his order, the Principal Collector observed that the manufacture of the towels by the assessees were not a secret; it was known to the department as well as to the export inspection agencies. He further observed that Excise Officers were posted in their factory for decades and were conducting necessary checks under the production bases control. In concluding that the extended period was not invokable, Collector made the following observations :- "The extended period of limitation has been invoked in the show cause notice based on the allegation that excise department did not know about the manufacture of te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the longer period of limitation prescribed under Section 11A. It is clear that there has never been any wilful statement or suppression of fact of manufacture of towels. As a result, the extended period of 5 years is not applicable in the present case. Thus I hold that the demand for duty on terry towels under Central Excise Tariff Heading 63.01 @ 12% ad valorem is maintainable on merits but is sustainable for the month of September, 1987 under Section 11A of the Central Excises and Salt Act, 1944 which amounts to Rs. 3,70,265.95. The balance amount of demand of Rs. 60,93,498.10 on the score is accordingly ordered to be dropped as hit by time limit." 5. Since the Collector had found that the assessees had not attempted to evade duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r being hemmed and stitched would also continue to fall under Heading 5802. But this claim was not later pressed by him. However, it is his case that the more appropriate classification for these towels is under 6202. It is his further claim that in terms of Entry at S. No. 3 of Notification 65/87, these goods were exempted from March, 1987 whereas the goods falling under 6301 came under the purview of this benefit only from 1-3-1988 by virtue of amending Notification 83/88-C.E. 8. We have carefully examined the submissions. Heading 6202 speaks of clothing accessories. Certain instances are given in the definition whereby goods like socks, stockings, gloves, shawls, scarves, mufflers, ties etc. would be classifiable therein. Clothing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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