9911796707
TMI Blog1998 (7) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Central Excise Tariff Act, 1985, which states as under : the expression densified wood means wood which has been subjected to Chemical or Physical treatment (being, in the case of layers bonded together, treatment in excess of that needed to ensure a good bond), and which has thereby acquired increased density to hardness together with improved mechanical strength or resistance to chemical or electrical agencies. 2.2 It was stated by the Company s Director Shri S. Agarwal in his written statements dated 3-11-1991 and 18-12-1991 that the process of manufacture of the said goods in their factory was that timbers/woods were treated with ASCU company by pressure impregnation. During the process of impregnation the timber was subjected to a high vacuum in a chamber so as to bring out excess water and air bubbles inside the timber. Then the ASCU compound was impregnated into the timber by pressure impregnation. 2.3 Wood was first kept in cylindrical vessels for extraction of air and moisture. Thereafter, the timber was treated with wood preservative under pressure. The process of treatment carried out by them was treatment with a Chemical pressure and seasoning, i.e., dry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Densified wood as defined in the Chapter Note. A copy of the Chemical Test Certificate dated 31-6-1991 from National Test House, Calcutta and the letter dated 16-12-1991 conveying the opinion of the Chief Chemist are annexed hereto and marked as Annexure A and B respectively. The enduse of the article is absolutely irrelevant in the context of the entry where there is no reference to the use or adoptation of the article. However, the Commissioner of Central Excise, Calcutta-I Commissionerate, dropped the show cause notice on the ground of insufficient evidences. 3. The respondents, contentions are that they have been carrying on the business, inter alia, of manufacturing and selling wood preservatives as well as undertaking seasoning/treatment of timber with such preservatives. Such treatment is mostly undertaken in respect of the wood supplied to them for this purpose by our various customers. For such services we charge the agreed charge from our customers. Their customers include various Electricity Boards, Port Trust, Public Works Departments, Ministry of Railways, Department of Mines, Housing Boards, Forest Departments etc. Apart from this, they have also got a numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at our factory. They were also all along well aware about our activities as also our undertaking the preservative treatment of wood with such preservatives in regards the manufacture of articles out of such treated wood. In fact, it is as long back as in the year 1978 that the Central Excise authorities had required them to take out a Central Excise licence in relation to our said activities. In the said proceedings, inter alia, correspondence was exchanged. After their said letter dated December 20, 1978 the matter was dropped by the department and was not proceeded with any further. 3.6 Without prejudice to the aforesaid, they have to state that no details and/or particulars as to how and on what basis and/or materials the view has been taken in the said notice have been supplied to them. The valuation of the said goods as sought to be made in the show cause notice is wholly arbitrary and incorrect. It is not at all clear as to how the figures have been arrived at. 4. Ld. Departmental Representative emphasized in reply that it is also an admitted fact that the company in their published literature issued to trade stated that their wood was the strongest wood having high res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition, his merely quoting Chapter Note 2 of Chapter 44 giving his own interpretation and opinion to the effect that the process adopted for improving the quality of timber as stated in your letter under reference by subjecting it to chemical and physical treatment would be covered under the scope of Densified Wood is of no consequence. Luckily the test report issued by National Test House, Alipore mentioned (supra) gives the data regarding relevant parameters and we can proceed on that basis to determine whether the items had acquired the characteristics of Densified Wood . 5.6 Ld. Counsel is correct in pointing out that mere use of preservatives, insecticides/fungicides/weedicides/pesticides etc. would by itself not change the nature or character of the item as they only serves to protect it : if however, the processes used are such that they also simultaneously or otherwise result in change in the characteristics and make it harder, denser, and stronger or resistant to chemical and electrical agencies, then certainly it will have to be treated as densified wood in terms of the definition given in Note 2 of Chapter Note 44 quoted above. 5.7 From the test report of Alipore T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial characteristics of densified wood. 5.13 However, in so far as the question of time bar is concerned, we find that ld. Counsel is correct in pointing out that the processes used by them had been disclosed to the Department and the Department has not been able to show that the case involved suppression or mis-statement of fact with intention to evade duty. Ld. Counsel has in this respect rightly drawn attention to the developments from 1978 onwards and the correspondence exchanged with the Department, and dropping of the earlier proceeding against them. We, therefore, hold that the Department has not been able to discharge the burden in so far as it relates to the extended period of time. 5.14 The show cause notice was issued on 3-12-1992 for the period 6-1-1987 to 31-12-1991. Hence the period beyond the normal period of six months is not available to the Department. The respondents are, therefore, required to pay duty for that period which is within normal time of six months. 5.15 The respondents have also raised a question of valuation or mistake in calculation which becomes relevant for the normal period for ascertaining the correct amount of duty due for this period. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
