1998 (7) TMI 198 - AT - Central Excise

Appellate tribunal rules in favor of appellants in refractory containers case, citing time-barred show cause notice.

The appellate tribunal ruled in favor of the appellants in a case involving the manufacture of refractory containers. The tribunal set aside the demand ... Demand - Limitation Issues:Manufacture of refractory containers, Exemption under Notification No. 221/86-C.E., Allegation of suppression of facts, Classification list approval, Show cause notice for duty evasion, Contravention of Central Excise Rules, Misdeclaration of products, Wilful suppression charges, Barred by time show cause notice, Demand of duty and penalty, Applicability of Notification No. 217/86-C.E.Manufacture of Refractory Containers:The appellants are manufacturers of glazed tiles and manufacture refractory containers for baking raw tiles. Initially exempted under Notification No. 221/86-C.E., the exemption was withdrawn from 1-3-1987. They claimed exemption under Notification No. 217/86-C.E. for the refractory containers but did not file a classification list for the period in question. A show cause notice was issued alleging suppression of facts for duty evasion.Allegation of Suppression of Facts:The Collector, Central Excise held that the appellants suppressed facts regarding the manufacture of refractory containers, invoking a larger limitation under Section 11A for a demand of Rs. 6,39,806.10 and imposed a penalty of Rs. 1 lakh. The appellants argued it was an omission due to lack of awareness about the withdrawal of the exemption and that the process of manufacture remained the same.Classification List Approval and Contravention:The classification list filed by the appellants on 1-4-1988 under Notification No. 217/86-C.E. was approved on 14-7-1988. The Revenue alleged misdeclaration and suppression, contravening Central Excise Rules. The department argued that the appellants failed to file a revised classification list after the exemption withdrawal.Barred by Time Show Cause Notice:The appellants contended that the show cause notice issued on 30-3-1990 was beyond the limitation of six months and thus barred by time. The appellate tribunal agreed, setting aside the demand of duty and the penalty imposed.Wilful Suppression Charges:The tribunal found no case of wilful suppression against the appellants, especially considering the approval of the subsequent classification list, unchanged manufacturing process, and regular filing of RT 12 returns. Consequently, the demand of duty and penalty were set aside.Applicability of Notification No. 217/86-C.E.:The advocate did not argue on the applicability of Notification No. 217/86-C.E., leading the tribunal not to address this issue. The appeal was disposed of in favor of the appellants based on the time-barred show cause notice and lack of evidence supporting wilful suppression.