9911796707
TMI Blog1996 (11) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellants company on 7-1-1988 and 8-1-1988 revealed that it had two sections, one in which manufacturing of metal containers was done with the aid of power (hereinafter referred to as power operated section) and the other, where biscuit tin containers and components were manufactured which did not use power (hereinafter referred to as non-power operated section). Officers noticed that for manufacture of biscuit tin containers and components black plate was brought from the power-operated section and coating of black plate sheets with varnish and aluminium was being done with the aid of power from the power operated section and removed to the non-power operated section for manufacture of biscuit tins and components. It was found from the records that though for clearances made from the power operated section duty was being paid, no central excise duty was being paid for metal containers and components cleared from the non-power operated section. On the basis of information collected by the authorities a Show Cause Notice was issued to the appellant co on 18-10-1988 calling upon them to show cause why excise duty should not be demanded from them for clearances of metal contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramachandran, Sr. Advocate, strongly urged that the goods manufactured in the non-power operated section was wholly exempt from duty in terms of Notification No. 191/73-C.E. as amended by Notification No. 30/76. He relied on the Tribunal decision reported in 1995 (74) E.L.T. 725 in which the Tribunal had held that where clearances from two units, one power operated and the other manually operated were involved, there was no requirement of disclosing the clearances from non-power operated unit for purposes of classification of items cleared from the power-operated unit. As regards clearances from the non-power operated section, Counsel relied on the decisions reported in (1) 1995 (75) E.L.T. 721; (2) 1989 (40) E.L.T. 276; and (3) 1995 (78) E.L.T. 401 in which the Tribunal had held that though for the purposes of initially identifying the eligibility for exemption it was necessary to strictly interpret the exemption notification, once it was established that a particular product was covered by the exemption notification, liberal interpretation should be given to the Notification and benefit should be allowed to the claimants where there was substantial compliance with the requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not factually correct as the tin sheets made in the sector using power has been subsequently made use of by the appellants in the non-power operated section. DR also pleaded that exemption under notification relied on by the appellants was not available to them since the benefit of the exemption would be available only if the process was done in the unit of others . He submitted that in the facts and circumstances of the case the appellants were owners of both the units. 7. We have considered the rival contentions advanced on behalf of the parties and perused the record. 8. The demand raised in the Show Cause Notice is in relation to biscuit tins and metal containers manufactured and cleared from the non-power operated section of the appellants during the period 7-11-1983 to 11-12-1987. The show cause notice issued to the dated 18-11-1988 alleged in paragraph 14 that they had wilfully suppressed facts relating to manufacture and clearance of metal containers manufactured in the non-power operated section of their factory. Since the extended period of limitation is involved, the first question for consideration is whether the requirements of proviso to Section 11A(1) of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f clearances of exempted goods. The Tribunal had also agreed with the Collector s observation that mere visit in the absence of proof of specific knowledge by Central Excise Officers would not absolve the appellants of their liability to duty and it would not disentitle the Revenue from invoking the five years limit. In the present case, apart from the visits of the concerned Central Excise Officers to the factory premises which housed both the power operated section and non-power operated section, it cannot be reasonably contended that the authorities were ignorant of the activities which were going on in the non-power operated section. It has not been disputed that when the power operated section commenced production in 1977 and Excise licence was obtained by the appellants, a site plan had been submitted to the Assistant Collector which shows both the power operated and non-power operated sections. From a copy of the site plan which has been enclosed at page 85 of the appeal papers it is apparent that there was no division between the two portions and it would not have escaped the notice of a trained person like an Excise officer as to the nature of operation carried out in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
