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TMI Blog1996 (1) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... s that said properzi rods were manufactured in the shape of coils. The scrutiny of the gate passes and the relevant invoices also revealed that the said wire rods were described to be in coil form. One representative of the appellants who was interrogated also confirmed that the said properzi rods were produced by continuous casting and rolling process in running length which remained in coil form and sold as such. On observation of this fact the Officers referred to Central Excise Tariff Act, 1985 and found that Chapter Note (a) of Chapter 76 defines Bars Rods as rolled, extruded or drawn products not in coils. It was further alleged that the appellants had evaded payment of Central Excise duty amounting to Rs. 1,38,99,178.64 during the period 1-3-88 to 19-5-88 when the effective rate of duty on aluminium wire was 20% ad valorem whereas the appellants had paid duty 13% ad valorem under Notification 150/86 dated 1-3-86. A show cause notice was issued to the appellants asking them to show cause as to why the Central Excise duty amounting to Rs. 1,38,99,178.64 should not be demanded from them under proviso to Section 11A of the Central Excises Salt Act, 1944 and why penalty sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant gate passes during the period in question clearly mentioned that the goods were in coil form only. The gate passes as well as the relevant challans were filed by the appellants along with the regular R.T. 12 returns. It was also pleaded by the appellants that the demand is hit by limitation. The appellants referred to the Board s Circular No. F. 141/12/90/CX. 4, dated 18-9-92 wherein it was mentioned it would appear that an abstract question was raised before the Central Board of Excise Customs as to whether wire rod in coil form can be covered by definition of bars and rods given in chapter 1(a) or as wire given in Chapter Note 1(c). The CBEC in the Circular took the view that by definition bars and rods is defined as other than in coils and hence wire rod in coils were classified by the Board to be aluminium wire under Heading 76.05. The appellants submitted that this Board s Circular was not at all concerned with the effective rate of duty leviable under the notification. It was argued by the appellants if Revenue s contention that the duty already paid on the statutory supply of wire rod at the rate of 13% under Serial No. 4 of the Notification No. 150/86 is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld tariff aluminium wire and articles thereof were classifiable under Tariff Item 27 which was replaced by new Tariff Item 27 with effect from 1-8-89; that the new Central Excise Tariff was introduced with effect from 1-3-86 and the same definition of aluminium wire and rods including wire rods as under the earlier tariff was continued. Again under Clause 81 of the Finance Bill of 1988 Chapter Note to Chapter Note 76 was introduced in order to allign the Central Excise Tariff with HSN. By this amendment separate definition for Bars and Rods, profiles, Wires, Plates, Sheets and Strips and foils of Aluminium were introduced; Chapter Note 1(a), to Chapter 76 defined Bars and Rods. The perusal of the two definitions shows that both bars and rods as well as wire are rolled, extruded or drawn products but the main distinguishing feature between them is that Bars and Rods are not in coils whereas wire is stated to be in coils; it would thus be seen that distinction between Bars and Rods and wire was introduced for the first time on 1-3-88. The learned SDR therefore submitted that in view of this definition given in the tariff itself the question of going into common parlance or trade unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excises Salt Act would not be effected by the change in classification. The Tribunal did not accept this contention and held that the change had immediate effect and the goods though manufactured prior to 28-2-82 were classifiable under Tariff Item 16B when they were cleared. 9. On the question of applicability of rates specified in the Notification No. 150/86 in respect of statutory supply and the rate under Notification No. 101/88 for non-statutory supply, the learned SDR submitted that when once the classification of the goods is done as aluminium wire classification under Chapter sub-heading 7605.00 the question of applicability of the rate of duty mentioned against Serial No. 4 of the Notification No. 150/86 for statutory supply does not arise. He submitted that so also can be said in respect of non-statutory supply under Serial No. 4 of Notification No. 101/88. 10. The appellants and the respondents cited a lot of case law which are as under : (1) Swaroop Fibre Industries Ltd. v. Collector of Central Excise, 1990 (48) E.L.T. 118 (Tribunal). (2) Collector of Customs v. O.E.N. India Ltd., 1989 (42) E.L.T. 235 (Tribunal) (3) Bajrang Alloys L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from the date of introduction of the change in the Finance Bill i.e. from 1-3-88 and not from the date on which the Bill become an Act. 13. On the question of limitation main argument of the Department was that the appellants did not declare that the product described by them as wire rod/properzi rod was in coil form. However as against this the appellants submitted that in their gate pass they were showing the product as in coils. From the facts of the case also we also observe that the admitted position in the show cause notice indicated in para 6 that on scrutiny of the gate passes and relevant invoices it was revealed that the said wire rods were cleared as in coil form. We also observe that gate passes as duty paying documents are always enclosed with the RT 12 returns, therefore, the Department cannot say that they were not aware that the item was in coil form. Simply because the appellants had not disclosed this thing in their classification list does not amount to suppression or misstatement. As gate passes/invoices described the goods in coil form therefore the allegation of suppression or misstatement is not proved and hence the demand is hit by limitation. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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