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TMI Blog2001 (8) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to the above extent on Calcined Pyrophyllite cleared by the appellants during the period 1-4-1995 to 12-10-1995, and imposed penalty of equal amount on the party under Section 11AC of the Central Excise Act and further penalty of Rs. 5 lakhs on them under Rule 173Q of the Central Excise Rules. 2. We have examined the records and heard both sides. 3. Ld. Counsel, Sh. B.L. Narsimhan for the applicants has cited the relevant Tariff Headings and sub-headings and submitted that, during the period of dispute, the applicants product viz. Calcined Pyrophyllite was appropriately classifiable under Chapter Heading 25.05 of the Schedule to the Central Excise Tariff Act on account of the fact that the classification of the product under the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no liabilty for them to pay duty as that Heading provided Nil rate of duty. Counsel further submits that, even if it is assumed that duty of Excise was payable on the product by virtue of strict application of Chapter Note 2, the liability to pay any such duty did not arise, in any case, prior to 26-5-1995, the date on which sub-heading 2505.10 of Heading 25.05 was deleted and, in that event the duty liability would substantially narrow down in quantitative terms. He has further contended that ld. Commissioner has not considered the applicants plea for rebate of duty from cum-duty price under Section 4(4)(d)(ii) of the Central Excise Act. Ld. Commissioner ought to have granted such rebate under the said provision of law in terms of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. 4. Ld, SDR, Shri M.D. Singh vehemently opposes the above submissions. He has placed strong reliance on Note 2 of Chapter 25 which, as he notes, clearly provides that Heading No. 25.05 does not cover products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in the heading. The product in question was admittedly a calcined product and hence it squarely fell outside the ambit of Heading 25.05, argues ld. DR. He submits that the opening phrase in the Chapter Note is of no avail to the applicants inasmuch as they have not been able to bring out any context which might justify inclusion of their product under the heading. On limitation also, ld. DR has endeavoured to make out a case fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 to 25-5-1995, classification of the applicants product was acceptable under sub-heading 2505.10. From 26-5-1995, that Sub-heading is not in existence on account of the aforesaid amendment. Ld. Counsel s argument is that mere deletion of the Sub-heading would not take the product out of the main heading. This argument has been advanced, in our view, without due regard to the mandatory provision of Note 2 of Chapter 25. That Chapter Note very clearly provides that, except where their context otherwise requires, Heading Nos. 25.01, 25.03 and 25.05 do not cover products which have been calcined or subjected to such other process mentioned in the Note. That the applicants product is a calcined mineral is an admitted fact. Whether the context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their claim of classification of the product under Heading 25.05. But that letter was submitted to the Department only at the fag end of the period of dispute. Therefore, prima facie, there is some force in the contention of ld. DR that there was withholding of information by the party from the Department atleast in relation to the period from 26-5-1995. We, however, have in our mind the fact that the product was held, by both the Department and the assessee, to be appropriately classifiable under Heading 25.05 prior to the period of dispute notwithstanding the existence of Note 2 in Chapter 25. The Department was aware of the existence, during those days, of Note 2 of Chapter 25, with which they have chosen to cudgel the party later on. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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