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TMI Blog2014 (4) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... main appellant was paying duty under the compounded levy scheme at the relevant time. The appellant is also manufacturing bleached leno gauze cotton fabrics falling under Chapter Heading No. 58.03 and paying duty on advalorem basis. Based on an intelligence that the main appellant had been clearing (i) Bleached Leno Gauze Fabrics falling of Chapter Heading No. 58.03 in the guise of 'Mosquito Net Fabrics' or Grey Leno Gauze Fabrics falling of CETH 52.07, and (ii) Stiffened Fabrics (Buckaram) falling under Chapter Heading No. 59.01 in the guise of Cotton Fabrics Stiffened Sheets falling under Chapter 52 so as to avail the benefit of compounded levy scheme under Section 3A of the Central Excise Act, 1944, while the said compounded levy scheme was not applicable to Chapter Heading No. 58.03 and 59.01. A Show Cause Notice dated 22.11.2001 was issued in the appellants and after following due process oflaw and natural justice, the adjudicating authority, vide the impugned Order in Original, classified the 'Bleached Leno Gauze Fabrics' under Chapter Heading No. 58.03 and confirmed the demand of duty of Rs. 36,64,311/- alongwith interest for the period 1996-97 to 2000-01. The adjudicating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 [reported as 2009 (242) ELT 426 (Tri. Ahd.)], held that the 'bleached leno gauze fabric' is correctly classifiable under Chapter Heading 58.03 restoring the Order in Original of the original adjudicating authority, as regards classification of 'Bleached Leno Gauze Fabric' and the Order of the Commissioner (Appeals) was set aside to that extent. The penalty imposed on the Director of the main appellant as well as the partner of M/s Gujrat Healthcare at Rs. 50,000/-, set aside by the Commissioner (Appeals), was not disturbed. The Tribunal, however, did not disturb the part of the Order in Appeal relating to 'Stiffened Fabric' as that portion of the order had not been challenged by the Revenue. 3.1. The learned advocate for the appellants Shri Paresh M. Dave fairly submitted that this Tribunal has held in the appellant's own case, [reported as 2009 (242) ELT 426 (Tri. Ahd.)], that 'Bleached Leno Gauze Fabric', manufactured by the appellant is correctly classifiable under Chapter heading 58.03 of the Central Excise Tariff Act, 1985, and thus he has no case on merits. 3.2. The ld. Advocate for the appellants, however, argued that the entire demand of duty for the period 1996-97 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom its buyers would have to be treated as cum-duty price in terms of section 4 (4) (d) (ii) of the Act, and the quantum of demand would have to be reworked accordingly. 4. On the other hand Shri M. Kutty, AR for the Revenue, argued that the extended period of time limitation was applicable to this case inasmuch as the demand of duty is based on intentional mis-declaration of 'Bleached Leno Gauze Fabric' of Heading No. 58.03 as 'Bleached Mosquito Net Fabrics' of Heading 52.07 to avoid payment of duty on advalorem basis. He drew our attention to averments made by various persons mentioned in Para 3, 4 and 5 of the impugned Order in Original clearly spelling out that the description of 'Bleached Leno Gauze Fabric' was deliberately changed by the main appellant as 'Bleached Mosquito Net Fabrics' to avoid payment of duty on the goods falling under CETH 58.03. 5.1. Heard both sides. We have also carefully perused the records. The issues raised by the appellants in these appeals were: (i) Whether the goods namely 'Bleached Leno Gauze Fabric' is classifiable under Chapter Heading 58.03 of the Schedule to the Central Excise Tariff Act, 1985 attracting advalorem rate of duty or under CET ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avoid double taxation. On the other hand evidence, adduced by the Revenue clearly indicate that the appellant had been indulging in evasion of excise duty by mis-declaring 'Bleached Leno Gauze Fabric' as 'Bleached Mosquito Net Fabrics' of Chapter Heading No. 52.07, which was detected by the Revenue after extensive investigations. Para 3, 4 and 5 of the OIO dtd 10.2.2005 passed by the Adjudicating Authority, summarizing the evidences, are relevant and reproduced below: 3. Shri Ghanshyambhai M Patel, in his statements dt 8.11.2000 and 29.11.2000 had also admitted Bleached Leno Gauze Fabrics meant for surgical and medical use was manufactured and cleared to various buyers in the guise of mosquito net fabrics to avoid payment of duty on advalrom basis, which had been done as per direction of Shri Hetabhai Shah, Director of the assessee. Similarly, stiffened fabrics subjected to the process of bleaching, heavy starch application and stentering were cleared as Cotton Sheeting Fabrics under CH 52 of CETA 1985. 4. Simultaneous search was conducted at the registered office premises of the assessee as well as at the factory premises of M/s Gujarat Heat Care, 434, GIDC, Odhav, Ahmedabad, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Act, 1944. Therefore, the demand of duty is not time barred and extended period has been correctly invoked in these proceedings while confirming the demand. Appellants contention of time bar is thus rejected. 6. As regards the Ld. Advocate's submissions that if any amount of duty is held recoverable from the appellant, the demand be re-worked out by treating the money received from the buyers as cum-duty, law on this point is settled now. However, to quantify and allow this part of the appeal the case is required to be remanded to the Adjudicating Authority to pass suitable order on the issue as per the settled law on this issue, after affording an opportunity of personal hearing to the main appellant. 7. In view of the observations in Para 5.4 above we are of the opinion that penalty of Rs 5 lakh rupees (Rupees five lakh only) imposed upon the main appellant M/s Neptune Textile Mills Limited is justified. We also uphold the penalty of Rs 1,00,000/- (Rupees one lac only) imposed on Shri Hetalbhai N. Shah, Managing Director of Neptune Textile Mills Limited. 8. So far as imposition of penalty upon Shri Nareshbhai P Shah is concerned, it is observed that Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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