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1994 (4) TMI 165
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....ise Tariff during the period 1-2-1985 to 9-12-1987 by one shot process by injecting Polyol, Isocynate and Mafron gas in the cavities between the inner plastic lining and the outer steel body of the Refrigerators. It was further alleged that the manufacture and use of such Polyurethane Foam contravened the provisions of Central Excises and Salt Act, 1944 and the Rules thereunder inasmuch as the appellants had neither filed any classification list, nor accounted for the production and this was done by suppressing the fact of manufacture with the intent to evade Central excise duty. They were, therefore, asked to show cause as to why duty amounting to Rs. 27,73,611.41 should not be recovered for the period 1-2-1985 to 7-12-1987 and why penalty....
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....ess of injection of Polyols and Isocynates for forming Polyurethane Foam into the cavities between the outer and inner surfaces of articles such as water jugs etc. does not amount to "manufacture" within the meaning of Section 2(f) of the Act. He added that in the case of Wimco Pen Company v. Collector of Central Excise, reported in 1992 (60) E.L.T. 628 the Tribunal had once again held that Polyurethane Foam of rigid type which is an insulating material cannot be deemed as excisable. He stated that in arriving at this decision the Tribunal relied upon its earlier order No. 684/89-C and 655/90-C in the cases of Eagle Flask (P) Ltd. v. Collector of Central Excise, Pune and Milton Plastics v. Collector of Central Excise, Bombay-II respectively....
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....hri Somesh Arora, the ld. JDR stated that there could be no reason for the appellants to entertain the belief that Polyurethane Foam produced "in situ" by "one-shot process" by injecting a mixture of Polyol and Isocynate in the cavity between the inner plastic lining and outer body of refrigerators was not liable to duty since as pointed out by the Collector the Board had clarified in its letter F. No. 93/11/79-CX. 3, dated 23-8-1979 that Polyurethane produced `in situ' would be chargeable to duty. He contended that there was no infirmity in the Collector's finding that the appellants had suppressed the facts with the intent to evade duty on the product in question, since they did not file any declaration or classification list and also fai....
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....s 4 to 7 of the judgment being relevant are reproduced below :- * * * * * * * 5. The learned counsel for the appellants has placed reliance on certain decisions of the Tribunal in which Polyurethane Foam produced by "One Shot" process by injecting Polyols and Isocynate in the cavities of articles like water jugs etc. has been held as not excisable. It appears that in these cases the judgment of the Andhra Pradesh High Court was not taken into account by the Tribunal. Sicne our attention has not been drawn to any contrary judgment of any High Court on this subject, we follow the judgment of the Andhra Pradesh High Court in the case of M/s. U-Foam v. Union of India (supra) and hold that product. Polyurethan....
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....e Foam by "One Shot" process, there is nothing on record to show that the concerned excise authorities had taken any action to inform the assessees through suitable Trade Notice about the change in the thinking of the Department in regard to the excisability of Polyurethane Foam produced by "One Shot" process. 7. In the case of Padmini Products v. Collector of Central Excise, reported in 1989 (43) E.L.T. 195 the Hon'ble Supreme Court has held that mere failure or negligence on the part of the manufacturer either not to take out a licence or not to pay duty in case where there is scope for doubt, cannot attract extended limitation, unless the manufacturer knew that the goods were liable to duty or he was required to take out a licence. It....