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TMI Blog1998 (8) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... able under Tariff Item 68 and steel wool powder under Tariff Item 25(5) of the First Schedule of the Central Excises and Salt Act, 1944. It is alleged that from 28-2-1986, under the Central Excise Tariff Act, 1985, steel wool falls under Heading No. 7308.90 and steel wool powder under Heading No. 72.05. Both manufactured out of steel wire purchased from outside. The show cause notice further states that steel wool powder was exempt from payment of Central Excise duty vide Notification No. 62/85 prior to 28-2-1986 and in the new Tariff, it falls under 72.05 attracting nil rate of duty. It is stated that the manufacturer in their declaration for the years 1983-84, 1984-85 and 1985-86 for exemption from licensing control had classified the product steel wool under Tariff Item 68 and Tariff Item 25(5) respectively and had claimed exemption under Notification Nos. 77/83, 83/83 and 77/85 for the three years. They had also in the declaration given the value of clearance of steel wool and steel wool powder. 3. It is stated that on going through the declaration, it appeared that the classification of the product as well as the value of clearances was not correct. Therefore, a detailed inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t regarding clearance value to the department with an intention to evade payment of excise duty, and therefore, liable for penal action under Rule 9(2) and various other rules of Central Excise Rules. Therefore, a total demand of Rs. 50,193.34 for the year 1985-86 and 1986-87 under Rule 9(2) of Central Excise Rules read with proviso to Section 11A(1) was raised. 4. In their reply dated 23-7-1988 they stated that Tariff Item 25 was restructured w.e.f. 1-8-1983. Prior to 1-8-1983, iron steel powders and sponge did not find a classification under Tariff Item 25. In the absence of any tariff item, the article steel wool/sponge was classified under Tariff Item 68 only for the period 1-4-1983 to 31-7-1983. They stated that during the period 1-4-1983 to 31-7-1983, the product did not find classification under Tariff Item 25 of the Central Excise Tariff and therefore, it was consigned to Tariff Item 25 for that period and thereafter with the restructuring of Tariff Item 25(5) w.e.f. 1-8-1983, it was classified under Tariff Item 25(5) with Tariff rate of duty at 12% ad valorem. Under Notification No. 209/83, dated 1-8-1983, as amended under S. No. 5 of the Table, the rate of duty was unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in the notification. 5. The Additional Collector had heard them and thereafter passed the impugned order confirming total demand of Rs. 41,619.18 under Rule 9(2) read with proviso to Section 11A(1) and imposing a penalty of Rs. 1,500/- under Rule 173Q. 6. We have heard both sides in the matter. Ld. Counsel strongly contended that the demands were barred by time and the admitted position is that the department does not deny the appellants having filed declarations from time to time. He also pointed out to the letter dated 28-2-1986 sent by the Superintendent of Central Excise informing them that as per Central Excise Tariff Act, 1985, iron sponge and steel powder are classifiable under Heading 72.05 and sub-heading 7205.00. He pointed out that in terms of Notification 111/78-C.E., the assessee is exempted from the operation of Rule 174 of the Central Excise Rules pertaining to licensing, on filing their declarations which, according to him, has been done. It is his submission that it is not the duty of the assessee to classify the goods, but only to file a declaration giving the description of the goods in the correct Tariff entry. It is his submission that the Superinten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsing control from following excise procedure and for maintaining registers. Tariff sub-heading 7205.00 carry nil rate of duty and therefore, the contention of the appellants that they were not required to take licence and pay duty under the different heading deserves acceptance. Department accepting the classification under 7205.00 which carries nil rate of duty is a matter of record. As has been laid down in the case of C.C.E. v. Kinjal Electricals (P) Ltd. cited by the appellants, the Tribunal in a similar circumstance held in para 3 as follows :- The grounds urged in the appeal and the submissions made by the Sr. DR in support thereof are untenable. It is urged that the Inspector had issued the demand within time and that the fact the respondents were asked to pay the duty amount by the Inspector s letter dated 17-12-1977 was sufficient to overcome the bar of limitation. It is urged and, in our opinion, strongly (to put it mildly) that the subsequent issue of show cause notice for the purpose of confirmation of the demand can in no way effect the original demand issued by the proper officer for the purpose of time bar. As we have already noted, the Inspector s letter was a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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