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TMI Blog2006 (8) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the proviso appended to Section 11A of the Central Excise Act, 1944 (for short "the Act") would apply to the facts and circumstances of the present case is the question involved in this appeal. 3.Before adverting to the said question, however, we may notice the basic fact of the matter which is not in dispute. 4.The Respondent herein manufactures paper based decorative laminated sheets. The goods manufactured by the Respondent were classified under Chapter 39 of the Custom Excise Tariff Act whereas according to the Appellant it should have been classified as sub-heading No. 4823.90. The classification for the year 1993 was approved by the Revenue. By a letter dated 6-12-1994, it requested Respondent to intimate the manufacturing process of the product, to which a reply was sent by it in terms of its letter dated 7-12-1994 disclosing the manufacturing process stating : "Brief Manufacturing Process of Paper Based Laminated Sheets The process of manufacture of the above products involving in three major stages is as under : 1. Preparation of Reactive Mixtures like (i) Melamine formaldehyde and (ii) Phenol formaldehyde. The reactive mixture process involves mixing of Mel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... senger buses etc. etc." 5.Yet again, a query was raised in regard to the use of plastic as an input for the manufacture of primal product, i.e., laminated sheets falling under sub-heading No. 4823.90. A reply thereto was also sent by the Respondent by a letter dated 22-12-1994 stating : "It is intimated that we are using Phenol, Melamine and Formaldehyde falling under Chapter 29 of Central Excise Tariff. Further, it is clarified that a gluing solution is obtained by mixing of phenol and formaldehyde and melamine and formaldehyde. At no stage any product known as plastic or marketable as plastic comes into existence. We are as such not using plastic as an input in the manufacture of paper based laminated sheets." 6.The question as to whether the product manufactured by the Respondent would fall under Chapter 39 or Chapter 48 of the Central Excise Tariff Act came up for consideration before this Court in Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd. [(1997) 10 SCC 350] wherein it was held that in respect of such products classification as provided for in Entry 39.20 would be applicable, stating : "Note (d) clearly provides that products consisting of glass fib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years available under proviso to Section 11A of the Act was not applicable. 10.It was stated : "The noticees strongly contend that they had correctly availed the concessional rate of duty. The noticees did not bona fide feel, at any stage that they are using any plastic product for the impregnation of the paper sheets. They had been using phenol for formaldehyd and other additives for preparation of a solution with which the paper was being treated to obtain paper based laminated sheets. The Hon'ble Tribunal in the case of Meghdoot Laminates P. Ltd. v. C.C.E. 1990(49) E.L.T. 75 had held that the products are classifiable under Chapter 48 and not Chapter 39 and accordingly entire industry had classified products under chapter heading 4823.90 and availed the benefit of Notification No. 135/89 dt. 12-5-89, which also referred to the products to be falling under sub-heading 4823.90. Since the duty had been paid by availing the benefit of Notification No. 135/89 as per practice being followed in the industry and as per approval of classification list granted by the competent authority it cannot [Emphasisbe said that exemption has incorrectly been availed." supplied] 11.It was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent. 16.At no point of time, the Revenue doubted the correctness or otherwise of the manufacturing process or the ingredients disclosed by the Respondent. The stand of the Respondent that the Industry as such had adopted the same manufacturing process and had been extended the benefit of the Exemption Notification of 1989 has not been called in question. If the stand of the manufacturer is correct, there was no reason as to why it should be singled out. 17.This Court decided Bakelite Hylam Ltd. (supra) on 10th March, 1997. The impugned notice was issued only on 9-12-1997 evidently relying on or on the basis thereof. 18.It is not a case where the Respondents had not disclosed the activities of manufacturing products carried out by them by declaration or otherwise. They responded to each and every query of the Appellant, as and when called upon to do so. The authorities of the Appellant must have verified the said disclosures. At least they are expected to do so. The disclosure made by the Respondent was acceptable to them. Their bona fide was never questioned. 19.The applicability of the extended period of limitation is, therefore, required to be considered in the af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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