Exemption for poly-coated paper sheets denied where coated sheets were cleared and material facts were not disclosed for limitation.

An exemption under Notification No. 116/89-CE was denied for poly-coated paper cleared in sheet form because the notification's exclusion covered sheets of paper or paper board coated or covered with plastics, and the decisive factor was the condition of the goods at clearance, not whether coating was done on rolls or after slitting. The demand was also held within limitation because the relevant sheet-form clearances were not fully disclosed in the classification list, so prior approval of that list did not bar recovery based on non-disclosure of material facts. The appeal therefore failed on both exemption and limitation.

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Issues: (i) Whether the goods cleared as poly-coated paper in sheet form were excluded from the benefit of Notification No. 116/89-CE dated 27-4-1989; (ii) Whether the duty demand was barred by limitation.

Issue (i): Whether the goods cleared as poly-coated paper in sheet form were excluded from the benefit of Notification No. 116/89-CE dated 27-4-1989.

Analysis: The notification contained an explanation denying the exemption to products consisting of sheets of paper or paper board impregnated, coated or covered with plastics, compressed in one or more operations. The decisive fact was not whether the coating was done on rolls or after slitting, but whether sheets of paper covered with plastic were cleared. Since the goods were also supplied in sheet form after poly-coating, the explanation applied to that variety of clearance.

Conclusion: The exemption under Notification No. 116/89-CE was not available to the sheet-form clearances, against the assessee.

Issue (ii): Whether the duty demand was barred by limitation.

Analysis: The show cause notice alleged non-disclosure of the sheet-form clearances in the classification list. The earlier approval of the classification list did not prevent the department from raising the demand when the relevant facts were not fully declared. On the facts, the demand was within the permissible period and was not treated as time-barred.

Conclusion: The demand was not barred by limitation, against the assessee.

Final Conclusion: The appeal failed on both merits and limitation, and the duty demand was sustained.

Ratio Decidendi: Where an exemption notification excludes sheets of paper or paper board coated or covered with plastics, the exemption is denied if such coated sheets are cleared, irrespective of whether coating was done on rolls or sheets; prior approval of a classification list does not bar a demand based on non-disclosure of material facts.

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