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TMI Blog2002 (10) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-97 and 1-4-97. In the earlier order passed by the Collector of Central Excise vide order No. 3/89, dated 6-3-89 in Paras 30 and 31 he had observed that the learned Counsel for the assessee had admitted that by declaring hydrochloric acid of concentration of 100% the company was able to manufacture and captively consume two-thirds of quantity in excess and that the company accepted the basic allegation in the show cause notice and agreed to pay the differential duty. 11. These observations were challenged by the Counsel before the Hon ble High Court of Madras and the proceedings ultimately resulted in CEGAT passing the de novo order remanding the matter to the adjudicating authority for disposal afresh in accordance with law. It was also observed by the Tribunal that the present Collector of Central Excise is different, from the officer who passed the earlier order. The tacit implication is that the observations regarding alleged concession of the Counsel for the defence admitting guilt are not to be taken cognisance of. 12. The only question to be decided in this case is whether or not there is wilful suppression of any material information warranting invoking t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is any short-levy. Therefore I am not able to sustain the allegation that the assessee concealed the actual production from the Department. Before approving the price, the Department should have made it specific that the approval is for a MT of 100% concentration or 30 to 33% concentration of hydrochloric acid. In view of the above discussions I hold that there is no suppression of any material information and therefore, the demand made for the period from 1-3-79 to 31-5-81 by the show cause notice dated 12-5-83 is time-barred. 14. Accordingly further proceedings are dropped. 2. Revenue in this appeal contends that the assessee had disclosed the fact of concentration of HCL as 100% while the investigations carried out with M/s. Mettur Chemicals Industrial Corpn. Ltd., disclosed that the actual strength of HCL was ranging from 30 to 33% and appellants had mis-declared and not given details of payment of duty. Therefore, there was clear mis-declaration and suppression of facts with intention to evade payment of duty and hence the Commissioner has committed serious error and has not passed the speaking order which requires to be set aside. 3. We have heard ld. DR Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessees were specifically informed by the jurisdictional Assistant Collector that the payment of duty on the basis of the said show cause notice would be without prejudice to any further action that may be taken as a result of investigation taken by him. 1.4 As a result of the investigations conducted, the following points had come to light : (i) Even though the assessees have been manufacturing hydrochloric acid of 30% to 33% concentration, they have been accounting a lesser quantity in RG 1, reportedly arrived at for hydrochloric acid of 100% basis theoretically. (ii) According to Rule 173B, the assessees should file a classification list furnishing therein the full description of the goods manufactured by them. The assessees should have therefore furnished the correct description of hydrochloric acid in this list with the actual concentration of 30% to 33% whereas, they have furnished the description as Hydrochloric acid (100% basis) in the lists filed on 16-4-79 and 19-6-80. (iii) Even though the assessees filed a revised classification list on 14-4-81 with the correct description, they failed to file revised price list for the changed descripti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of Central Excise in his O.I.O. No. 31/88, dated 10-6-88 confirmed duty to the tune of Rs. 20,40,809.68 on the hydrochloric acid manufactured and consumed during the period from 1-3-79 to 31-5-81. In the said order, Collector observed that the demand for the period from 1-6-81 to 30-11-82 would be decided by the concerned Assistant Collector. This Order was challenged before the High Court of Madras and in pursuance of the above order of High Court, Collector passed another order, O.I.O. No. 3/89, dated 6-3-89 confirming the demand of duty. 1.8 Against the above said order, the assessees filed an appeal before the CEGAT, Madras. Tribunal in its Order No. 232/93, dated 29-7-93 set aside the order in question and remanded the case for de novo adjudication. 1.9 On the basis of CEGAT s order mentioned above, a notice dated 4-12-96 was issued to the assessees. In their replies dated 12-3-97 and 1-4-97, the assessees contended that the show cause notice dated 12-5-83 fixing the rate of hydrochloric acid on 33% basis between Rs. 205.56 to 220.56 based on the sales made by M/s. Mettur Chemical is not only arbitrary but also against the valuation rules. 2.0 On adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the classification list is approved, it is the duty of the proper officer to ascertain the manufacturing process and verify the declarations filed by them. Although, the declaration made in the classification list is Hydrochloric Acid (on 100% basis) and duty has been paid as such, but the department's contention is that 100% HCL acid does not exist and they are manufacturers of 30 to 33%. All these aspects of the matter have been explained by the assessee and they have clearly contended that HCL does not exist as 100% as it will be in gaseous stage and requires to be liquidified on lesser percentage. The hydrochloric acid fumes are taken to the HCL absorber where it is absorbed by water to form hydrochloric acid of 30 to 33% concentration and the unabsorbed fumes along with the inert gas are vented out through the discharge side of the tail end blower. It is the assessee's case that absorption of HCL fumes with water is an exothermic reaction and hence the HCL absorber is necessarily cooled by water. The manufacturing process has been filed with the department in November, 1979 itself which clearly disclosed the formation of HCL of 30 to 33% concentration and that the other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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