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TMI Blog2006 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended. Their factory was visited by the Central Excise Officers, who conducted various checks and verifications. As a result, final goods 18/202/1 worth Rs. 15.48 lakhs were found to be in excess and excisable goods valued at Rs. 1.50 lakhs involving Central Excise duty of Rs. 37,733.50 were short found The Revenue entertained a view that the various goods manufactured by the assessee were actually articles of Polyurethane Foam and were not entitled to the benefit of the said notification. They further entertained a view that since the final product was being supplied to Ministry of Defence without payment of duty in terms of exemption under Serial No. 3 of Notification No. 64/95-C.E. dated 15-3-1995, they were required to pay duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows, Sofa Seats and are specifically covered under Heading 94.01 and 94.04; that the exemption under Notification No. 1/93 was availed by them with the acceptance of the concerned Assistant Commissioner. In support of their above contention they referred to the interpretative Rules as also to Hyderabad Collectorate Trade Notice No. 10/92, dated 31-1-1992 reported in 1992 (58) E.L.T. (T9), clarifying that "Mattresses of expanded foam or sponge rubber made by moulding are classifiable under heading No. 9404 of the Schedule to Central Excise Tariff Act and not as other plates, sheets etc. of cellular plastics under sub-heading No. 3921.00". They also challenged the demand on the point of limitation. Explanation was also given for the excess fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of goods falling under Chapter 94 for claiming exemption under the Notification No. 1/93, the exemption under Notification. No. 1/93 was not deniable to the Mattress, Pillows, Bolsters, Seat etc. manufactured by the assessee. In addition to mattress, cushion, seat covers etc. manufactured by the assessee. In addition to mattress, cushion, seat covers etc. the assessee also manufacturers Polyurethane Foam Sheets Polyurenthane Foam cut to size and shapes, Polyurethane Foam cut pieces and waste, which are correctly classifiable under Chapter 39 under Sub-heading No. 39.21, 39.26 and 39.50. The Mattress, Pillows covered/uncovered are distinguishable from the Polyrethane Foam Sheets and Polyurethane Foam cut to size for which classificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Naval Depot should be accounted at the intermediate stage, when the same was not objected to in respect of blocks used for Mattress etc. for duty payment was not correct and maintainable. (d) The difference in the finished stock was due to the difference in accounting. The Foam Blocks which directly go into the Mattress are not at all marketable, and hence, they need not be specifically accounted for. However, since the assessees are clearing foam Sheets/Mattress, their accountability will come into picture only when they are properly covered and labeled. The assessee accounts for these goods accordingly. The goods are therefore not liable for confiscation. However, the shortages which have not been accounted for satisfactorily attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd imposition of personal penalty under Rule 209A on the Director. The impugned order of the Commissioner is silent on the above two prepositions made in the notice. 7. After hearing both the sides, we find that the Revenue has not given any concrete reasons for adopting the classification of Mattress, Polyurethane etc. under Chapter 39 in preference to Chapter 94 where the same are specifically mentioned. Similarly we have seen the photographs produced on record by the Respondents and find that the PUF blocks, which the Revenue seeks to hold as marketable and hence excisable. It is seen that no evidence showing marketability of the same has been produced by the Revenue. It is well settled by now that onus to prove marketability upon the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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