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TMI Blog2018 (9) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... premises were inspected by the Department. In fact, though the 1st respondent had applied for registration during July 1997, which period itself, the factory premises were inspected by the Department and thereafter, only, the preventive department officials have inspected the respondent premises, i.e. 25 months after registration, and thereafter, 17 months later, the show cause notice dated 03.01.2001 came to be issued against the 1st respondent. It is clear from the plain reading of Section 11A, the Central Excise Officer shall, within 2 year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice. In fact, the said two years period of limitation was substituted with effect from 14.05.2016 and prior to that, it was only one year - The show case notice dated 03.01.2001 sent, is belated from the date of registration with the department, during the month of 1997 itself, and therefore, the action of the department is time barred. The authorities h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Rule 1944. The appellant had also sought to impose penalty under Rule 209A of the Central Excise Rule 1944 on M/s.BBA India Limited for their alleged collusion. 4. Based on the allegations that the 1st respondent had contravened the provisions of Rule 9(1) read with Rule 173F, 52A, 173B, 173G and 226 of the Central Excise Rule, 1944, the above notice was issued by invoking proviso to Section 11A(1) of the CEA, 1944, to cover the extended period of demand. These provisions of the Central Excise Rules, 1944, prescribe certain set of procedures to be followed by a manufacturer of excisable goods, from declaration of goods produced or manufactured in a factory to store the said goods, determine the duty liability, prepare documents such as invoice for the clearance of said goods, make payment to the Government Account, and also the time and manner of remittance to the Government Account. 5. Due to non appearance of the 1st respondent in the personal hearing granted, the Adjudicating Authority has passed an ex-parte order vide Order-in-Original No.12/2002 dated 27.05.2002, confirming the duty demanded in the Show Cause Notice dated 03.01.2001, besides imposing equal p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Act 1944 and consequential penalties under Section 11AC of the Act on the assessee and under Rule 209A of the Central Excise Rule 1944 and on the supplier M/s.Bush Boake Allen India Limited as well as demand of appropriate interest under Section 11ab of the Act, is barred by limitation. (ii) When the assessee has not taken registration under the Act on the guise of ignorance of law would not amount to suppression within the meaning of proviso to Section 11A(1) of the Central Excise Act. (iii) Whether in the facts and circumstances of the case the finding of the Tribunal is not perverse in holding that there is no malafide in the show cause notice and confusion of classification persisted in the industry having led the assessee to be in confusion and therefore demand of duty under the extended proviso to Section 11A(1) of CEA 1944, is hit by limitation of time, is correct or not? merely because the assessee has not properly understood the law when the provisions of the Act makes the assessee liable to pay duty. 9. Heard the learned counsel for the appellant and the learned counsel for the respondents, and perused the materials available on record. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal that the 1st respondent was under the bonafide belief that due to the dispute raised by M/s.Roha Dychem before various forums food colour preparation shall fall under Chapter 21 while the Revenue was claiming that it would fall under the Chapter 32 of Central Excise Tariff Act, 1985. Further, the 1st respondent was given an impression by M/s.International Flavours and Fragrance India Limited, for whom they were job working, similar goods, that the goods manufactured on job work would fall under Chapter 32 of the Central Excise Tariff Act, 1985. Such confusion in the industry prevented the 1st respondent to seek for registration under the Central Excise Act, 1944, even though, it was manufacturing food colour preparations, both as a manufacturer, as well as job worker. 14. It could be further seen from the explanation given by the the 1st respondent that to resolve the controversy, legislature intended that inserted of Chapter Note 7 to Chapter 21 to CETA, 1985 with effect from 16th March 1995. But, the note related to labeling and relabelling and any other process amounting to manufacture. The 1st respondent has further stated that even carrying out any other process wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urs and compositions thereof . The Department seeks to bring the subject goods under the description synthetic organic colouring matter, whether or not chemically defined under Heading 3204.90. In our Opinion, there is no real difference between colours and colouring material. What applies to colours would apply to colouring material also. If food colours are not dyes and colours , they would not be colouring matter either, if the Supreme Court's observations in the S.N.Brothers case were to be applied to the present case. On the other hand, Ch. Note 5 to Chapter 21 shows that Heading No.21.07 inter alia includes flavouring powders for making bevarages, whether or not sweetened. The said Note 5 is not an exhaustive one but an inclusive one and if flavouring powders for making beverages are included in Heading No.21.07, we do not see any reason why food colours should not also be deemed to be covered by the said heading. Of course, Ch. Note 5(j) is a specific one and does not cover the present food colours. The respondents' contention that the goods are akin to coloured syrups is not tenable because the goods are powders. 13. As between the two Headings 2107.99 and 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r invoking Section 11(A) of the Central Excise Act. 21. The Appellate Tribunal while deciding such issue, has given reasons for its finding that in the show cause notice, there are no specific and explicit averments attributing malafides and conduct of assessee in contravention of the statutory provisions. The notice sent should specify the averments and to have brought to the knowledge of the assessee for raising their defence. In the absence of malafide intention expressly stated in the show cause notice, the 1st respondent cannot be presumed to have acted in a malafide manner to abstain itself from registering with the department prior to 19.06.1997. 22. These factual aspects and circumstances, have been considered by Tribunal, and going through the same, we do not find any infirmity in the order passed by the Tribunal, as there was no malafide pleaded by the appellant, in the show cause notice dated 03.01.2001 against the 1st respondent, to suppress the fact before the authority and ought to have made such statement to lead the Department to hold that the 1st respondent had intention to cause evasion of duty. It is an admitted fact that the confusion as to whether the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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