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TMI Blog2002 (7) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Advocate, mentioned that in appeal No. E/547/98-C filed by Patna unit of the Appellants the period involved for demanding duty is from June, 1991 to December, 1993 and the show cause notice has been issued on 1-7-1996 and as such the entire period is beyond 6 months and is time barred. He also mentioned that the connected appeals are E/552-553/98-C filed by Shri Banwari Lal Sharma and Shri Pramod Kumar Sharma upon him the penalties have been imposed under Rule 173Q(1) of the Central Excise Rules. Taking these appeals first the learned Advocate submitted that the impugned product was considered as classifiable under Tariff Item 14E of the erstwhile Central Excise Tariff and was not subjected to any duty because of the expressed exclusion of medicine which were Ayurvedic that with the introduction of Tariff Item 68 the impugned product was held to be classifiable under the said item and accordingly upto 1978 the Appellants paid Central Excise duty on the impugned product : that notification No. 62/78, dated 1-3-78 provided exemption to all drugs, medicines, pharmaceuticals not elsewhere specified; that they claimed the benefit of the said notification which was extended to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons specifically with regard to the impugned product only not withstanding the decision of the Tribunal the Department cannot claim that any fact was suppressed by the Appellants or there was any intention to evade payment of duty; that it has been held by the Supreme Court in the case of Cosmic Dye Chemicals v. CCE, Bombay [1995 (75) E.L.T. 721 (S.C.) = 1995 (88) ECR 232 (S.C.)] that to validly invoke the extended period of limitation it is essential to not only establish the contravention by but also the intention to contravene on the assessee; that in view of all the facts the intention to contravene cannot be there on the part of the Appellants; that as held by the Supreme Court in the case of Tamil Nadu Housing Board v. CCE, Madras [1994 (74) E.L.T. 9 (S.C.) = 1994 (55) ECR 7 (S.C.)], the initial burden is on the department to prove that the situation visualize by the proviso to Section 11A existed: that the department has not discharged its burden. The learned Advocate further submitted that no justification has been given by the Adjudicating Authority for invoking the extended period of limitation; that the Adjudicating Authority" has given his finding that no reliance on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bajaj Tempo Ltd. 1997 (94) E.L.T. 285 (S.C.) wherein it was held that Trade Notice issued by the authorities are not decisive of the question of excisability of the product. 5.The learned Advocate mentioned that appeal No. E/546/98-C has been filed by their Hajipur unit wherein the demand pertains to the period from June, 1993 to March, 1996 whereas the show cause notice was issued on 21-6-96; that the connected appeals are E/548 to 551/98-C filed by Shri Banwari Lal Sharma, Shri R.K. Sharma, Shri R.P. Sharma, and Shri P.K. Sharma, on which penalties have been imposed under Rule 173Q of the Central Excise Rules. The learned Advocate submitted that the appellants have been filing declaration in respect of their product DML claiming classification under Sub-heading 3003.30 as Ayurvedic medicine fully exempted; that the first declaration was filed by them on 27-9-93 and thereafter every year they have filed the declaration; that in view of this it cannot be claimed by the department that the fact of manufacture of impugned product was suppressed by them from the department with an intent to evade payment of duty; that the Commissioner has invoked the extended period of limitation b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board's Circular even the demand for the 6 months period cannot be sustained against them. 7.The learned Advocate mentioned that in appeal Nos. E/1095/98 and 1252/98 filed by their Jhansi unit the show cause notice has been issued within 6 months and these demands cannot be sustained in view of the decision of the Supreme Court in both Dhiren Chemical Industries cases. 8.In respect of appeal No. E/514/2000 the learned Advocate candidly admitted that the demand has been confirmed for the period of 6 months which is sustainable but for the quantum of the demand it has to be recomputed in terms of decision of the Larger Bench in the case of Sri Chakra Tyres v. CCE, 1999 (108) E.L.T. 361 (Tribunal). He also mentioned that if the demand is held to be payable by them in other appeals also, the quantum of the demand has to be recalculated treating the same price as cum-duty price. 8.1In respect of appeal No. E/2717/99-C the learned Advocate mentioned that in this appeal they have claimed refund of duty paid by them during the period January, 1997 to May, 1997 on the ground that the impugned product is an Ayurvedic medicine. 9.Countering the arguments the learned SDR reiterated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellants were aware that their earlier classification list effective from 1-3-88 has been reviewed by the Commissioner which might require payment of duty and with the intention to keep fact of manufacture and clearance of the product suppressed they had not filed classification list whereas they had filed classification list in respect of other products. On the other hand the learned Advocate has successfully shown that the fact of manufacture of DML by them since long was known to the department and dispute had arisen about its correct classification under the old Tariff as well as the new Central Excise Tariff. It is mentioned in the impugned Order dated 20-11-1997 which is subject matter of appeal No. E/547/98-C that the Appellants were aware about review of the approval of the classification list filed by them effective from 1988. This itself goes to show that the department was very much aware of the appellants manufacturing DML and even after reviewing the approval accorded by the Asst. Collector to the classification list no steps had been taken by the department to keep the levy alive. In the light of these facts mala fide intention to suppress the fact of manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Nothing has been brought on record in support of the findings by the Adjudicating Authority that the Government instructions dated 25-9-91 was got issued on the mis-statement made by the appellants to the Government. The demand for the extended period of limitation is hit by time limit provided under Section 11A(1) of the Central Excise Act and is therefore, set aside. 12.As far as demand for the period of 6 months is concerned in appeal No. E/546/98-C and in other appeal Nos. E/1095/98, E/1252/98 and 514/2000 we do not agree with the contention of the learned Advocate that even the demand for 6 months cannot be confirmed against them in view of the Government's instructions dated 25-9-91. He has placed reliance on two decisions delivered by the Hon'ble Supreme Court in the case of CCE v. Dhiren Chemicals (supra). We find that the ratio of these two decisions is not applicable to the facts of the present matters. In Dhiren Chemical Industries, 2002 (139) E.L.T. 3 (S.C.), Hon'ble Supreme Court has held that "regardless of the interpretation that we have placed on the said phrase, if there are Circulars which had been issued by the Central Board of Excise Customs which place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een issued subsequent to the period involved in all these appeals. The Revenue is justified in demanding the Central Excise duty for the normal period of limitation. However, we find force in the submissions of the learned Advocate that the price at which impugned product had been sold has to be treated as cum duty price and the assessable value has to be determined therefrom in view of the decision of the Larger Bench of the Tribunal in the case of Sri Chakra Tyres Ltd. v. CCE, Madras, 1999 (108) E.L.T. 361 (Tribunal). The Adjudicating Authority is, therefore, directed to recalculate the quantum of duty in terms of the decision in the case of Sri Chakra Tyres Ltd. and intimate the same to the Appellants who have to pay the same. In view of our findings no penalty is imposable in appeal No. E/546/98-C on the Appellant company as well as on the officials of the company in appeal No.E/548 to 551/98-C. 13.In appeal No. E/2717/00-C the Appellants have come in appeal against the Order-in-Appeal No. 224-CE/KNP/1/99 dated 1-9-99 passed by the Commissioner (Appeals) confirming the rejection of refund claim filed by them for the duty paid during the period January, 1997 to May, 1997. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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