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2015 (4) TMI 1087

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..... at in the classification list the appellant admittedly mentioned “rate 6 per sq. mtr. plus the duty for the time being leviable on the base fabrics under Chapter 52, if not already paid”. From this mention it is clear that department is under belief that base fabric used by the appellant is falling under Chapter 52 whereas the appellant used the base fabric which is falling under Chapter 60, therefore, this is a clear misdeclaration of the fact. As regards to submission of ld. Counsel that stock was verified physically by the departmental officer, we are of the view that though the stock of the goods was verified but from the stock verification officer cannot ascertain whether the base fabric used in the product is falling under Chapter 52 or Chapter 60. Therefore, we do not agree with the submission of the ld. Counsel on this count. We, therefore, are of the view that there is clear suppression of facts and misdeclaration on the part of the appellant therefore, extended period was rightly invoked. during the period 1-3-1986 to 31-1-1989 the appellant has suppressed and misdeclared facts therefore, show cause notice for the said period can be issued up to five years. Only because s .....

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..... as claimed by the appellant and the tariff rate on the product falling under Chapter Heading 5903.19. In the classification filed by the appellant effective from 1-3-1986, 1-3-1987 and 1-3-1988 under the column for rate of duty, the appellant declared the rate of duty applicable under exemption notification and "plus the duty for the time being leviable on the base fabrics under the Chapter 52, if not already paid". In the show cause notice the main contention of the Revenue is that since the product on which appellant claimed the exemption notification, the base fabric used is falling under Chapter 60 and not under Chapter 52 as prescribed under the notification. In the first round of adjudication the then Commissioner vide Order No. 35/CEX/1991, dated 28-9-1991 confirmed the demand of ₹ 1,17,52,675.40 and penalty of ₹ 25 lakhs was imposed and on account of confiscation of land, building, plant, machinery, etc., redemption fine of ₹ 5 lakhs also imposed. Aggrieved by the said adjudication order dated 28-9-1991, appellant filed appeal before CEGAT. CEGAT vide it's Order Nos. 157 & 158/95-D, dated 28-2-1995 remanded back the matter to the original authorities for .....

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..... e, demand is time-barred. He further submits that show cause notice for extended period, i.e., 1-3-1986 to 31-1-1989 was issued on 26-2-1991 whereas the show cause notice for the period Feb. 89 to 11-6-89 was issued on 18-7-1989. It is his submission that one of the show cause notice dated 18-7-1989 was issued for the normal period, thereafter issuance of show cause notice for the period 1-3-1986 to 31-1-1989 on 26-2-1991 is clearly time-barred. He submits that as regard the goods manufactured by the appellant which is subject matter of the case the fact was known to the department. He also submits that at the time of new tariff coming into force the Superintendent verified the stock physically therefore, for this reason also suppression of fact or misdeclaration does not exist and therefore, the demand for the period 1-3-1986 to 31-1-1989 is clearly time-barred. 3. On the other hand, Shri Ashutosh Nath, ld. Asst. Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that the impugned order was passed in de novo adjudication as per this Tribunal Order Nos. 157 & 158/95-D, dated 28-2-1995 (Bhor Industries Ltd. v. .....

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..... rate of duty. M/s. BIL were liable to pay duty on the said goods at the tariff rate specified for sub-heading No. 5903.19. 11.2 The demand relates to the period from 1-3-1986 to 31-1-1989 with the enactment of the Central Excise Tariff Act, 1985 and its enforcement with effect from 1-3-1986, Notification No. 141/86-C.E., dated 1-3-1986 was also issued. For the sake of easy reference, the text of Heading No. 59.03 is reproduced below :- Heading No. Sub-heading Description Rate of duty Basic Additional 5903 Textile fabrics, impregnated with plastics other than those of Heading No. 59.02 - Of base fabrics of cotton (Chapter 52) - 5903.11 -- Coated or laminated with preparation of low-density polyethylene Nil Nil 5903.19 -- Other 30% plus Rs. 6 per square metre plus the duty for the time being leviable on the base fabrics under Chapter 52, if not already paid 5% plus Rs. 2 per square metre. - of base fabrics of man-made textile materials (Chapter 54 or Chapter 55) Nil Nil 5903.21 - Coated or laminated with preparations of low-density polyethylene Nil Nil 5903.29 -- Other 30% plus Rs. 7.50 per square metre plus the duty for the time being leviab .....

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..... classified under the sub-heading 5903.19, 5903.29 or 5903.99. (c) There is no dispute on the fact that the goods in question, namely, coated fabrics manufactured by M/s. BIL were manufactured by using cotton hosiery cloth (knitted fabrics) classifiable under Chapter 60 of the Central Excise Tariff as base fabrics. Since the base fabrics used is other than cotton fabrics falling under Chapter 52 or man-made textile materials falling under Chapter 54 or 55, the resultant coated fabrics manufactured by M/s. BIL cannot be classified under 5903.19 or 5903.29 of the Central Excise Tariff. That means, the correct classification of the coated fabrics in question manufactured by M/s. BIL is tariff sub-heading 5903.99 of the Central Excise Tariff. (d) Notification No. 141/86-C.E., dated 1-3-1986 covers all coated fabrics falling under Heading 59.03, i.e., Sl. No. 8 of the Table covers the coated fabrics classifiable under 5903.19; Sl. No. 9 covers the coated fabrics classifiable under 5903.29 and Sl. No. 10 covers the coated fabrics classifiable under 5903.99. (e) When the coated fabrics in question manufactured by M/s. BIL is classifiable under tariff sub-heading 5903.99, the said go .....

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..... /s. BIL cannot be classified under 5903.19 or 5903.29 of the Central Excise Tariff. That means, the correct classification of the coated fabrics in question manufactured by M/s. BIL is tariff sub-heading 5903.99 of the Central Excise Tariff. (d) Notification No. 141/86-C.E., dated 1-3-1986 covers all coated fabrics falling under Heading 59.03, i.e., Sl. No. 8 of the Table covers the coated fabrics classifiable under 5903.19; Sl. No. 9 covers the coated fabrics classifiable under 5903.29 and Sl. No. 10 covers the coated fabrics classifiable under 5903.99. (e) When the coated fabrics in question manufactured by M/s. BIL is classifiable under tariff sub-heading 5903.99, the said goods automatically get covered under Sl. No. 10 of the table attached to Notifn. No. 141/86-C.E., dated 1-3-1986. Hence, the proposal in the SCN to deny the benefit of Notifn. No. 141/86-C.E., dated 1-3-1986 to the goods in question and to apply the tariff rate of duty is incorrect. The same findings are applicable in respect of Notifn. No. 63/87-C.E., 1-3-1987 also as the text of both the notifications are identical. 12.1 The demand covered by the show cause notice in question relates to the perio .....

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..... apter 54 or Chapter 55 are classifiable under chapter sub-heading 5903.21 or 5903.25 and other coated fabric are classifiable under Chapter sub-heading 5903.91 or 5903.99. In the present case since the coated fabric manufactured by the appellant is not made of base fabric of Chapter 52, 54 or 55 therefore, is not classifiable either under Chapter sub-heading 5903.19 or 5903.29. In view of this undisputed fact the product in question is correctly classifiable under Chapter 5903.99 and therefore, correctly extended the benefit of Notification No. 141/86-C.E., dated 1-3-1986 under Sr. No. 10 of the table and Notification No. 63/87, dated 1-3-1987 under Sr. No. 5 of the table appended thereto. As regard the judgment of Natson Laminates (supra)., Asian Leather Cloth Mfg. Co. (supra), and CCE v. Entremonde Polyecoaters Ltd. (supra). It is observed that in all these judgments the issue involved was that if the base fabric falls under Chapter 60 whether exemption Notification No. 141/86-C.E., dated 1-3-1986 and Notification No. 63/87, dated 1-3-1987 can be allowed wherein under column of rate of duty, chapter heading of base fabric is mentioned as 52, 54 or 55. In the present case since in .....

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