TaxTMI 
TaxTMI 
1999 (11) TMI 458
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....her " gas Compressors in their classification list though these compressors were used in manufacture of air-conditioners of capacity less than 7.5 tonnes. A show cause notice dated 25-3-1991 was issued to them for demanding duty for the period from 1-3-1986 to 31-12-1989. The Collector, Central Excise, Hyderabad, under the impugned order dated 21-8-1992, confirmed the demand of duty amounting to Rs. 49,08,612/- and imposed a penalty of Rs. 10 lakhs, holding that the evidence that impugned compressor was used by their customers in the manufacture of air-conditioners had not been disproved by them; that use had been in a substantial number of air-conditioners; that use of 300 compressors in one city alone in the manufacture of air-conditioner was substantial use; that much before their experiment of manufacturing air-conditioner in their unit by using impugned compressor they had mentioned in their 1988 Brochure that the said compressor was capable of being used in air-conditioners and deletion of this use in subsequent brochure confirms deliberate suppression of facts and mala fides; that as the Appellants deliberately suppressed the fact of utilising the compressors in the manufact....
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....ers are of 7/8 August, 1990 which is subsequent to the period to which the demand relates; that there is not even an allegation in the show cause notice that they were aware that any purchaser of compressor was using the same in the manufacture of air-conditioner; that it is clearly stated in letter dated 8-8-1990 of Domestic, Madras that they had purchased the compressor originally with the idea of making water coolers but they subsequently used them for producing mini air-conditioners; that no evidence has been placed on record to even indicate that any compressor allegedly utilised for mini air-conditioner was actually so utilised and, if so, was found workable satisfactory. 4. The ld. Sr. Counsel also mentioned that the demand is time barred; that only on the basis of experiment carried out by them by using one compressor in November 1989, it cannot be said that they had suppressed any information from the Department; that on the contrary, since an experiment was carried out for the first time, clearly establishes that prior to November 1989 they were not even sure that the compressor in question could be used in the manufacture of air-conditioners; that all the classif....
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....-9-1993; that no appeal has been filed against the said order and accordingly no penalty is imposable on the Appellants as it cannot be said that they had intentionally not paid the duty. 5. Shri R.K. Sharma, ld. S.D.R., countered the arguments by submitting that failure to file an appeal in one case does not mean that another case cannot be contested by the Revenue and reliance was placed on the judgment of the Supreme Court in the case of Chief Commissioner of Income tax v. V.K. Gururaj, 1996 (83) E.L.T. 485 (S.C.) wherein the Supreme Court held that the failure to file an appeal in one case does not have the effect of following in all other cases. He, further, submitted that the Collector's order proceeds on the assumption that compressor of different specifications are required for water cooler and air-conditioners; that the decision in Kirloskar Cummins Ltd. v. U.O.I. - 1993 (67) E.L.T. 82 (Bom.) relied upon by the Collector (Appeals) pertained to classification of the product whereas in the present matter the issue involved is about the availability of the Notification; that principle of predominant use will not apply in interpreting any entry in Notification. He also....
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....ply the ld. Sr. Advocate submitted that they had made no misdeclaration in the classification list as the compressors were meant for replacement market for use in water cooler and bottle coolers. He also contended that extended period of five years is applicable only when something positive other than mere inaction or deliberate withholding of information is proved by the assesee as held by the Supreme Court in C.C.E. v. Chemphar Drugs and Liniments - 1989 (40) E.L.T. 276 (S.C.) and in C.C.E. v. Muzzaffarnagar Steels - 1989 (44) E.L.T. 552 (Tribunal). 6. We have considered the submissions of both the sides. Sr. No. 1 of the Table annexed to Notification No. 166/86-CE reads as under : S. No. Heading No. OR Sub- Heading No. Description Rate Condition 1. 8414.10 (i) Gas Compressors of the kind used in air-conditioning including room air-conditioners (window type), Split Unit Air-conditioners and package type Air-conditioners of capa-city not exceeding 7.5 Tonnes. Rs. 4000/- per Compressor (ii) Other gas Compressors Forty per cent ad-valorem (iii) Gas compressors used in the manufa....