9911796707
TMI Blog1998 (6) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial plywood for which they obtained L4 licence from Superintendent of Central Excise, Hosur-II Range under Tariff Item 16B. They were availing exemption from duty as per Notification No. 83/83, dated 1-3-1983 as in force for the financial year 1984-85 and for the year 1985-86 they were availing exemption as per Notification No. 85/85, dated 17-3-1985. In the manufacture of block boards, they require Veneers (Tariff Item 68) which is also produced in the same factory. Such veneers when used for captive consumption are exempted from duty as per Notification No. 118/75, dated 30-4-1975. This fact has been declared by them in their classification list for Tariff Item 16B approved by the department. In the month of August, 1985, they rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same to M/s. Unik Enterprises without obtaining a licence. But, the value of such goods sold will be well within the exemption limit of Rs. 20 lakhs allowed as per Notification No. 77/85, dated 30-4-1985 applicable to manufacturers of Item 68. Hence, they were not otherwise liable to pay duty on the outright sale of core veneers. 5. It has been alleged in Paras 3 and 4 of the show cause notice that they were liable to pay duty on the following goods despatched from their factory :- Sales to M/s. Unik Enterprises, Bangalore. (a) (a) Outright purchase of core veneers. 1,34,399.51 (b) utright purchase of wood planks and reapers. 1,15,809.36 (c) Outright purchase of block board fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99.51 (b) Job charges received actually by them as per their invoice to the above party. 6,000.00 Total 1,40,399.51 Duty @ 12% 16,849.91 In respect of the sale of wood planks, reepers, block board frames, they are all bought item and not manufactured in their factory. They were not to be classified under Item 68 and as such, the question of paying duty as a manufactured item does not arise. 6. It was their submission that there was no mala fide intention on their part to evade duty because they had accounted all the wood logs received from the above two parties and prepared invoices for job charges, whenever there was outright sale of core veneers, they have also prepared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed set-off of duty paid by them. It is, however, correct that the appellants could have availed of the benefit of procedure of Rule 56C. However, since they did not do either of these, these pleas do not become a basis for whoever opted to pay the duty. The duty so demanded is payable by them. The provisions of Section 11A have been invoked in this case. In a case where sizeable dutiable commodities were manufactured without a licence and were cleared without payment of duty, there is actually no need for the department to produce any material to sustain the invocation of Section 11A. 8. The appellants have stated in their miscellaneous petition that the peeling of wooden logs does not amount to manufacture in terms of Section 2(f) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence was not taken out of ignorance, that itself could not be a ground for demanding duty and imposing penalty. 10. The department s argument that there was no need for the department to produce any material to sustain to proviso of Section 11A is not acceptable because in order to take advantage of proviso to Section 11A, it is necessary to prove suppression or mis-statement of facts or fraud with intention to evade duty. Since the department has not proved that these criteria were satisfied and the action was mala fide, therefore, extended period of time was also not available to the department. 11. Learned Collector has himself observed, inter alia, in the findings portion of his order that it is substantially evident that had the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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