TaxTMI 
TaxTMI 
1994 (12) TMI 151
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....Rs. one lakh has also been imposed under Rule 173Q read with Rule 226 of Central Excise Rules, 1944. 3. The facts of the case are that the officers of Central Excise Anti Evasion Branch, Central Excise Collectorate, New Delhi visited the factory premises of the appellants on 7-9-1990 and found them engaged in the manufacture of complete auto seats and seat cushions made of cellular rubber for scooters, motor cycles, mopeds and three wheelers falling under Chapter Heading 9401.00 and 4016.11 of Central Excise Tariff, 1985 respectively. They were holding licence L-4/Chapter 40/MOR-IV/MOD-86 and had cleared the goods on payment of CED @ less levy 10% of the effective rate upto the aggregate value of clearance of Rs. 75 lakhs in a financial year in terms of the provisions of Notification No. 175/86 dt. 1st March, 1986 as amended. The Officers scrutinized the classification lists submitted by the party as required under Rule 173B of the Central Excise Rules, 1944 which revealed that the party had in the classification list inscribed that they were registered as an SSI vide SSI No. 55/55/18008/PR/58 dtd. 11-4-1986 whereas scrutiny of the SSI certificate issued to the party by ....
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.... upon the party to explain as to why the duty amounts should not be recovered by invoking the extended period under the proviso of sub-section [(1) of Section] 11A of the Act and as to why the penalty should not be imposed upon them. In their written reply dtd. Nil received by the department on 24-9-1991, they stated that they had received an identical show cause notice from the Supdt. of Central Excise Range VI, New Delhi relating to the period from April 1989 to September 1989 and decision of which had not been conveyed to them. It is pleaded by them that the present show-cause notice also covers the same period and therefore, it is ab initio illegal and deserves to be withdrawn. They also submitted that the shortage was due to the reason that the goods were sent back for getting some minor defects rectified; that they were entitled to the exemption under Notification No. 175/86-CE dtd. 1-3-1986 being a SSI unit during 1986-87 and, therefore, SSI exemptions remained continued to be available to them in the succeeding years even without the said notification. They denied the charge of mis-statement and suppression of facts and stated that the classification list as well as RT 1....
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....e facts of the present case. He has also held that they had clandestinely removed the goods involving Central Excise Duty of Rs. 8,141.06 which had been found short on physical verification. 6. We have heard Shri V. Sridharan, ld. Advocate for the appellant and Shri Sharad Bhansali, ld. SDR for the Revenue. 7. The ld. Advocate submitted that the department has accepted the certificate for the subsequent period and classification list 86/94 has been approved by the department. He submitted that the provisional certificate had been renewed upto 1989. He submitted that the classification list had been approved under Heading 87.14 as parts for motor vehicle and tractor and bus seats under sub-heading 94.01. Therefore, in the show-cause notice, the Department invoking a different Tariff Heading 40.15 is not sustainable in law for larger period. He submitted that at best the claim can be confirmed for six months only. He also submitted that during the relevant period, the duty had been paid at lower rate namely 20% and 25% respectively whereas they had paid the duty at a higher rate of 50% (60% - 10%) which is also double the amount of duty actually payable by the appellants. ....
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.... We have carefully considered the submissions made by both the sides and perused the records. The question that arises for our consideration is as to whether that in the face of the approved classification list under the Headings 87.14 and 94.01 after verification of the product and the SSI certificate, the department is entitled to invoke larger period. (2) Whether the duty paid by the assessee under the said Tariff Item is excess than that which is claimed by the department under a new head. (3) Whether the demands are barred by time. As rightly pointed out by both the parties, the issue of approved classification list under one heading and paying high duty thereunder than the one claimed by the department in the show-cause notice has not been agitated by the party before the ld. Collector. This is a question of law and also verification of facts. On a perusal of the records, we find prima facie substance and force in this submission. This point requires further adjudication and it will be proper that the matter is reconsidered by the adjudicating authorities. It has also been pleaded by the ld. Counsel that the department themselves had approved the classifica....