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TMI Blog1997 (11) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Rs. 66 lakh against the applicants M/s. S.M. Dyechem Ltd. under Rule 173Q and of a penalty of Rs. 10 lakhs on Shri B.S. Shetty, the other applicant who is the Managing Director of M/s. Rukma Chem Products (P) Ltd. now M/s. S.M. Dyechem Ltd. under Rule 209A of the Central Excise Rules. 2. Shri Vipin Kumar Jain, the ld. Chartered Accountant for the applicants, submitted that the applicants have a strong case on merits. The department has classified the goods produced by them viz. PEG 300, PEG 400 and PEG 600 under Chapter 39 as against the claim of the applicants that these products as separate chemically defined organic compound will fall under Chapter 29. The ld. Counsel pointed out that the applicants have relied upon Chapter Note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to audit by the Central Excise Revenue Audit Party as well as the Internal Audit Party of the Commissionerate and therefore, it cannot be said that the demand is on account of some new facts recovered by the department. Hence, the applicants cannot be charged with suppression of facts. The demand period is beyond six months because there were show cause notices issued on 1-1-1993 for the period 14-9-1989 to May, 1991 and show cause notice dated 3-3-1993 for the period 1-2-1988 to 30-9-1989. This was the period when the unit was known as M/s. Rukma Chem Products (P) Ltd. and this unit was taken over by the present applicants M/s. S.M. Dyechem Ltd. in Sept. 1989. It was further argued by the ld. Counsel that the Commissioner has passed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while M/s. Rukma Chem has the knowledge of the composition of the product having more than 5 monomer unit and yet the correct declaration was not made in the classification list, which amounts to suppression of facts. The ld. D.R. further referred to the Commissioner s reasoning in the order to show that there were three opportunities of personal hearing granted to the applicants who have chosen not availed of those opportunities and hence the Commissioner was constrained to adjudicate the matter. The ld. D.R. further pointed out that a perusal of the profits loss accounts for the year ending 31-3-1997 shows that there was an amount of over Rs. 36 crores due to them from sundry debtors. Their cash and bank balance is to the tune of Rs. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to say that the Chapter Note 3(c) of Chapter 39 thereby gets attracted for classifying the product under that chapter. The fact that in respect of some of the products in dispute, the Commissioner (Appeals) has found in their favour for applying under Chapter Note 2(b) of Chapter 39 will also be a factor for taking a view that prima facie in this respect the applicants have a case. Therefore, for the purpose of hearing the appeal on merits, we dispense with the pre-deposit of the duty and penalty. However, having regard to the fact that the issue relates to a matter of classification of the product which will have a recurring revenue effect and also the amount involved in these appeals, we also hold that this is a fit case for taking the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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