9911796707
TMI Blog1999 (9) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of India recognising the fact that the dependence on fuelwood continued to play a pivotal role in meeting cooking and domestic requirements in rural areas, found it necessary to replace the traditional and inefficient cooking stoves with more fuel-efficient cooking devices with a view to conserve forests and fuelwood and also to improve the health and hygienic conditions, reduce drudgery of women and to make an overall improvement in the quality of life. Accordingly, the National Programme on Improved Chulhas was chalked out and implemented by the Ministry of Non-Conventional Energy Sources. The appellants were among those who were authorised to manufacture improved Chulhas as part of implementation of this programme. Government, under the said programme, granted several fiscal concessions and incentives to the implementing agencies including the appellants. One of such incentives was 100% exemption from Central Excise duty and General Sales Tax/Central Sales Tax in respect of improved Chulhas. 3. As authorised/licensed under the aforesaid National Programme on Improved Chulha, the appellants manufactured improved Chulhas falling under Chapter Sub-Heading 7321.20 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 28-12-1995 was within time. (c) The demand of Central Excise duty amounting to Rs. 1,09,74,142/- for the period January, 1991 to March, 1994 demanded in the first show cause notice and the duty demand of Rs. 14,13,375/- for the period July, 1995 to November, 1995 raised in the second show cause notice were confirmed. Central Excise duty was leviable on the clearances of the goods for the periods from April, 1994 to September, 1994 and from 29-6-1995 to 30-6-1995 at appropriate rate and recoverable after quantification by the jurisdictional Assistant Commissioner. The amount of duty to be so quantified by the Assistant Commissioner shall form part of this order. (d) Penalties of Rs. 20 lacs and Rs. 2 lacs were imposed on the appellants under Rule 173Q(1)(c) under the show cause notice dated 27-12-1995, and the show cause notice dated 28-12-1995 respectively. 5. The present appeal is against this order of the adjudicating authority. 6. We have carefully considered the impugned order, the grounds of appeal and connected records of the case. We have also heard learned Advocate, Shri J.S. Agarwal appearing for the appellants and learned SDR, Shri R.K. Sharma for the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the improved Chulhas manufactured by the appellants would fall in the category of wood burning stoves of iron or steel, or copper alloys. We observe that the preponderance of evidence forthcoming from the records of the case is in favour of the fact that the improved Chulhas manufactured by the appellants were stoves made of steel and iron and were intended for burning fuelwood. In their written reply to the show cause notice, the appellants had submitted that the main raw material used in the Chulhas was iron or steel and that an inner lining of aluminium sheet was provided for reflecting (thereby preserving) heat inside the stove. They had also submitted that they were manufacturing Chulhas of two different sizes. One of these having a weight of 8.5 Kgs. had an inner lining of aluminium sheet which weighed only 0.187 Kgs. The other Chulha of smaller size had a weight of 5.5 Kgs. with aluminium sheet lining of a weight of 0.121 Kgs. The products were thus predominantly made of iron and steel, with a negligibly small percentage by weight of aluminium (2.2% w/w). Relying on Note 5 of Section XV of the Central Excise Tariff Act, 1985, the appellants submitted, in their reply, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romptly answered by the appellants as evidenced by the correspondence between the parties, the learned Advocate submits. It is further submitted that the appellants are an undertaking of the U.P. State Government and hence had no reason to suppress any information before the Department with intent to evade Central Excise duty on the products manufactured by them. Learned Advocate, therefore, argues that the demand of duty raised in the show cause notices dated 27-12-1995 and 28-12-1995 is clearly time-barred in view of the fact that the extended period of limitation under the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944, was not invocable against the appellants in the absence of suppression of information with intent to evade Central Excise duty. In support of this contention, the learned Advocate invites our attention to the decision of the Tribunal in the case of D.S.M. Industries v. C.C.E., Madras [1997 (94) E.L.T. 588 (Tribunal) = 1997 (72) ECR 649 (Tribunal)]. In that case, the Tribunal, following the ratio of its earlier decisions in certain cases, held that where the assessee entertained a bonafide belief that their products were classifiable under a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the appellants only. 12. Opposing the contentions of the learned Advocate, the learned SDR, Shri R.K. Sharma submits that the products under reference would not attract the provisions of Sl. Nos. 12 and 13 in the Tables to the Notifications No. 181/88 and 41/94 on account of the presence of non-steel and non-iron part, namely, aluminium sheet in the stoves manufactured by them and, therefore, the said products would not be eligible for exemption from Central Excise duty under the said Notifications. The learned SDR, further, questions the reliance placed by the appellant s counsel on Note 7 of Section XV of the Central Excise Tariff and submits that the said note cannot be employed for the interpretation of the exemption Notifications in view of various decisions of the Tribunal. The SDR invites our attention to the decision of the Tribunal in the case of Nippon Precision Bearing Limited v. Collector of Customs, Bombay [1997 (90) E.L.T. 57 (Tribunal)], wherein it was observed thus : We agree with the learned Advocate that law is now well settled that for interpreting strict provisions of Notifications, Section Notes, Chapter Notes or even the Interpretative Rules cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or steel. We also observe that no condition whatsoever was laid down for like purpose in respect of the same goods mentioned against Sl. No. 13 of the Table to Notification No. 41/94. Therefore, as regards the products of the appellants viz. wood burning stoves of iron or steel falling under Chapter Heading No. 73.21, we find that any strict interpretation of Notifications No. 181/88 and 41/94 would not exclude the appellants products from the ambit of the Notifications, since we have already held that the use of aluminium plate as reflector in the Chulhas by itself did not make the product cease to be product of steel or iron by virtue of Note 7 of Section XV of the Central Excise Tariff. Therefore, we have to hold that the reliance placed by the Revenue on the decision of the Tribunal in the case of Dalmia Industries Limited does not advance the case of the Revenue any further. On the question of limitation too, we observe, the learned SDR s arguments are not forceful enough to persuade us to find Issue No. II in favour of the Revenue. 14. We have already found Issue Nos. I and II (as formulated by the learned Commissioner) in favour of the appellants. Issue No. III also conse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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