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TMI Blog2005 (3) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... their customers furniture falling under Headings 94.01 and 94.03 of the CETA Schedule without following the Central Excise procedure and without payment of duty. The show-cause notice, which invoked the extended period of limitation on the basis of alleged suppression of facts by the party, demanded duty on the furniture items for the period 1992-93 to 1996-97. It also proposed penalties on the Company under Section 11AC of the Central Excise Act and Rule 173Q of the Central Excise Rules, 1944. A separate personal penalty was proposed on the Managing Director of the Company, appellant in appeal No. E/3192/1998, under Rule 209A of the Central Excise Rules, 1944. The assessee contested the demand of duty by submitting that the items in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, under Section 11AC, for the period prior to 28-9-1996. 3. Heard both sides. Ld. Counsel for the assessee submitted that their plea of non-excisability of some of the items was not properly considered by the Commissioner. The question whether those items were marketable or not was not looked into. According to the test laid down by the Apex Court in the case of Louis Shoppe (supra), where hand-made furniture had visual appeal in the nature of ornamentation of substantial nature, it should be considered as 'handicrafts'. This test was not correctly applied by the Commissioner, Counsel argued. Had the test been correctly applied to the goods in question, they would have been found to be 'handicrafts' attracting the benefit of exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 3 (S.C.)]. It was pointed out that the Review Petition filed by the Department against the judgment in Maruti Udyog (supra) were dismissed by the Apex Court vide 2005 (179) E.L.T. A102. It was also settled law that no penalty could be imposed under Section 11AC in relation to any period prior to 28-9-1996, the date on which the said provision of law came into force. In this connection, ld. Counsel relied on the Supreme Court's decision in CCE, Coimbatore v. Elgi Equipments Ltd. [2001 (128) E.L.T. 52 (S.C.)]. 4. Ld. SDR forcefully defended the Commissioner's order demanding duty on all the items of furniture which were manufactured and cleared by the assessee without payment of duty during the period of dispute. She submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have given careful consideration to the submissions. We find that the lower authority has rendered a reasoned order on the issue whether the subject goods could be regarded as 'furniture' or 'handicrafts'. It appears, the Commissioner carefully examined the photographs produced by the assessee and found that none of the items had any visual appeal in the nature of ornamentation of a substantial nature. We have also seen all the photographs available on record and fully agree with the Commissioner's observation. According to the test laid down by the Apex Court in Louis Shoppe (supra), for any furniture to qualify as 'handicrafts', it must be graced with visual appeal in the nature of ornamentation or inlay work or some similar work len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion was not rebutted in this case. Therefore, the extended period of limitation was rightly invoked for demanding duty. In view of the finding of suppression, penalty, under Section 11AC, imposed by the Commissioner is also justifiable. This penalty is relatable to the quantum of duty demanded for the period from 28-9-1996 only. The Commissioner has not imposed penalty, under Section 11AC, for the period prior to 28-9-1996, the date on which the said provision of law came into force. We also do not find any reason to interfere with the reasonable penalty imposed on the assessee under Rule 173Q inasmuch as manufacture and clearance of excisable goods without following Central Excise procedure and without payment of duty is a proven fact in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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