9911796707
TMI Blog1999 (12) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Jurisdictional Assistant Commissioner of Central Excise. It is alleged against the applicant and it has failed to take registration under Rule 174 of the Central Excise Rules, and failed to file classification list and price list for the goods manufactured under Section 173B and 173C of the said Rules, and failed to account in the statutory records under Rule 173G(1) read with Rule 53, and Rule 226 of the said Rules. It is further alleged that effected the removal of the said goods from the factory premises without the cover of the valid Central Excise documents under Rule 173G(2) read with Rule 52A of the Rules and failed to determine the Central Excise duty on the aforesaid Rules prior to removal under Rule 173F and failed to pay the Central Excise duty on the said Rules by making debit entry in the current account prior to the removal of the goods under Rule 173G(1) read with Rule 9(1) of the said Rules, and charged with the wilful contravention of the provisions under Rules 173B and Rule 173C and Rule 174 read with Rule 52A and Rule 173G(4), Rule 173G(2) read with Rule 53 and Rule 226, Rule 173G(1) read with Rule 9(1) of the Central Excise Rules. 2. Under Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Act, 1944 read with Rule 9(2) and or Rule 209 of the Central Excise Rules 1944, and also for imposing of penalty and for levying of interest and for the confiscation of land, building, plant etc. After the receipt of the reply and holding the personal hearing the order-in-original dated 10-11-1998 was passed confirming the demand and imposing penalty of equal sum. 4. It is further contended that the applicants has a prima facie strong case as the metallic yarn are correctly entitled for the benefit of the Notification, and there was no suppression of facts to invoke the longer period and the adjudication order is beyond the scope of show cause notice. It is passed in violation of the principles of natural justice. The Modvat credit claim is not taken into consideration. Substantial question of law as to the eligibility of exemption under the Notification No. 76/86-C.E., dated 10-2-1986, when the goods under reference has been specifically treated as handicraft by the Development Commissioner (Handicrafts) is involved in this case. Recovery of duty and penalty on the legal issues is not justified. The applicants will be put to undue financial hardship if the pre-de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantial nature and not a mere pretence, to characterise the goods was an handicrafts as per the decision in 1996 (83) E.L.T. 13 (S.C.) in the case of Collector of Central Excise v. Louis Shoppe, there is no dispute and it is satisfied Metallised yarn has a visual appeal in the nature of ornamentation when used in the saree borders or garments as it renders to real artistic improvements in the said goods. This is sufficient for the correct classification and would correctly merit consideration as handicraft for the purpose of Notification. The metallic yarn is handicraft in unfinished or incomplete form produced with the aid of machinery which will be used in the production of handicraft predominantly by hand. Development Commissioner has specifically treated the metallic yarn of the type involved in this case as handicarfts. There is substantial compliance in this case. Even if any doubt arises it should go to the manufacturer. There is no intention to evade payment of duty and denial of Modvat credit is not justifiable. The exemption cannot be denied merely because it was not claimed at the time of clearance as the final product was considered as exempt from duty under the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of handicraft as per the decision of the Hon ble Supreme Court and also Board clarification remains unfulfilled. The applicants have no prima facie case either on merits or on limitation. The impugned order also contains the explanation for confirming the higher demand. 7. Perused the show cause notice/reply, and the documents produced in this case, and impugned order. From the perusal of the stay application regarding the grounds on which the stay is sought for. It is seen that, as contended by the applicants the substantial question of law as to the eligibility of exemption under the Notification No. 76/86-C.E., dated 10-2-1986 is involved in this case. Even the show cause notice is attacked on the question of limitation citing the case laws. So also on the merits of the case. The main question to be decided is whether the product manufactured by the applicant is handicraft to attract the notification in the light of the Supreme Court Judgment relied on by the department and the Board Circulars, and notification, and the processes of manufacture of the product in question, requires detailed consideration in the background of the case laws relied on by the applicant. This can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of fact from the department by the applicant both under declaration under the letter of surrender of the registration certificate and also the misstatement about the fulfilling of the two criteria mentioned in the said Circular to claim the eligibility of exemption under the Notification knowingly that the applicant are not fulfilled the said condition. Para 10 of the show cause notice also mentions about the clearance of the goods under the various bills as per the Annexure A for the year 1995-96 without determining the Central Excise Duty and paying even though the applicant was knowing that the clearances should have been effected on payment of Central Excise duty. Para 14 of the show cause notice contains the contravention of various rules wilfully deliberate intention to evade payment of duty. The demand was made under para 15 clause (a) and (b) mentioning specific period from 1-4-1995 to 31-5-1998 under the provisions of Section 11A of the Central Excise Act read with Rule 209 of the Central Excise Rules. In the impugned order the adjudicating authority has considered the case of the applicant in para 33 and 34 about allegation of suppression, misdeclaration alleged sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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