TaxTMI 
TaxTMI 
TaxTMI 
2000 (5) TMI 453
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....o Section 11A(1) and imposing a personal penalty of Rs. 1,25,000/- on the first appellant and appropriating certain amounts against bonds executed by the second appellant for the purpose of provisional release of the seized goods. 2. The brief facts of the case are that on 7-7-1989 a tempo carrying 10 reels of paper was intercepted in Bangalore. The goods had been allegedly loaded from the godown of M/s. Road Bird P. Ltd. at the instance of M/s. Veekay Paper Packs. The driver of the tempo produced consignment notes and stated that he did not have other documents such as Central Excise gate pass, invoice, etc. The Proprietor of M/s. Road Bird P. Ltd. produced the Excise Gate Pass No. 673, dated 5-6-1989 issued by the first appellant and on verification of the same, the Central Excise Officers found that 44 reels of "Intaglio S/c 38 GSM" were removed to the second appellant, as writing and printing paper under sub-Heading No. 4820.10 with the benefit of Notification 48/89. However, on verification, the officers noticed that 44 reels of paper had been received in the transporter's godown at Bangalore and the weighment sheet of 5-6-1989 also confirmed receipt of 44 reels of paper....
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....use notice proposing recovery of differential duty and proposing confiscation on the Intaglio Paper and Opaque Laminating Base Paper under seizure and also proposing imposition of penalty. The Collector of Central Excise held as under on the two varieties of paper : "(i) Intaglio S/C : The test report of Central Pulp and Paper Research Institute, Saharanpur dated 22-12-1989 clearly shows that Opacity is less than 70% viz. 67.1% and that resistence to wetting is also not too low viz. 17.1 g/m. The laboratory has further ruled out it being imitation grease proof paper due to low oil transudation time of less than 5 seconds but has good strength properties and is, therefore, closer to general grade packing 5 wrapping paper. Hence the paper is to be classified primarily on the basis of low opacity as not being printing and writing paper. Instead it would rightly be classifiable under sub-Heading 4806.90 other as it is not glazed on either side as per the said test report. Therefore, the benefit of Notification 48/89 would not be available to it. (ii) Opaque Laminating Base Paper : The test report of Central Pulp and Paper Research Institute, ....
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.... the substantive and the machinery provision for refund of any excess excise duty paid which is also a complete code for the same. The Court held that the provisions of Section 35A and Section 35EE relating to appeal neither over-ride the Section 11B nor can it be said that Section 11A, is a mere machinery provision which cannot be invoked independently and/or the same would only be invoked in aid of the powers conferred in Section 35A and/or Section 35EE of the Central Excise Act, 1944. In view of the ratio of the above judgment, we hold that the Collector has not acted beyond jurisdiction in issuing the notice for reclassification of seized goods and consequent demand. Further, in the case of Ballarpur Industries Ltd. v. Assistant Collector of Customs and Central Excise reported in 1995 (76) E.L.T. 499 (S.C.), the Apex Court has held that in the case of approved classification list price list, duty short levied for the period prior to the issue of the show cause notice is recoverable subject to the time limit provided under Section 11A of the Central Excises Act, 1944. The Court held that there could be no reason for the issuance of a show cause notice for the period subsequent t....
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....r which has been held to be other glazed transparent and translucent paper). Therefore, for the reason that show cause notice does not allege suppression or mis-statement with intention to evade payment of duty attracting the proviso to Section 11A, and for the reason that no suppression can be attributed to the appellants when goods were cleared after payment of duty in consonance with the classification approved by the Department, we hold that the demand is governed by the normal period of limitation of six months. The seized goods were cleared under cover of gate pass No. 673 dated 5-6-1989 as evident from the opening paragraphs of the impugned order wherein recital of facts shows that the seized goods were intercepted on 7-7-1989 after they had been loaded on the tempo from the godown of Road Bird P. Ltd. at Bangalore at the instance of Veekay Paper Packs (second seller, since the appellants sold the goods in question first to Sudhir Papers who in turn sold them to Veekay Papers) and gate pass No. 673 dated 5-6-1989 was produced by the transporter. The Collector does not dispute this stand of the appellants, but, however, confirms the demand under the proviso to Section 11A(1) ....
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....ne - 2 Sample was conditioned at temperature 27+1oC and 65+5% relative humidity and tested for various characteristics Property Values obtained Surface appearance Grammage (g/m2) Burst factor Tear factor Unglazed (both sides) 37.6    22    CD   53    MD   19    Breaking lengh (m) CD   3410   MD   4880   TEA Index (J/M) CD   916   MD   454   Brightness (%) 73.7   Opacity (%) 67.1   Oil transudation time, seconds grease resistance Cobb value (g/m2) less than 5 Top   16.9   Wire   17.2   Avg.   17.1   Remarks : 1. The paper is closer to the categories of general purpose (1) Packing/Wrapping paper & (2) writing and printing paper, except low tear for packing/wrapping grade and low opacity for writing and printing grade. 2. The paper has poor grease resistance property. Grease proof paper should have oil transudation time more than 1200 seconds. It cannot be c....
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....e papers manufactured by the appellants herein, including the two disputed varieties have been approved from time to time after chemical examination of the paper and after finding that the papers were as claimed by the appellants. The method of manufacture of papers falling under Heading 48.06 is different from that of ordinary papers, as noted by the adjudicating authority himself in para 8 his findings, and there is no evidence to show that the appellants are carrying out the processes necessary for the manufacture of these special papers. We also find that although the show cause notice proceeds to reclassify the papers on the basis of their end use, the Collector has given up this basis, because, as recorded in para 7 of his findings, the picture which emerges from the facts on record is far from clear as far as end use is concerned and it is not possible to mainly rely on the end use factor for the purpose of deciding classification. The material on record is, therefore, not sufficient for change in classification and the Department has not been able to establish that the two varieties of paper in question are classifiable under Heading 48.06 instead of under Headings 4802.10 ....
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.... not advance the cause of the manufacturer. 13. Further, in case of seizure of goods of a type other than those approved in classification lists and/or removed clandestinely, it is the test report, if any, and or the market enquiry and the statement(s) of the concerned persons etc. are, inter alia the constituent elements of evidence the evaluation of which is the determining factor. In the present case 44 reels of paper were recovered and the GP No. 673, dated 5-6-1989 was for 41 reels of Intaglio SC-38 GSM under 48.02 with exemption under Notification 48/89, which is available to printing and writing paper but on physical verification of the consignment it was as found that it was of butter paper. A sample was sent to Central Pulp and Paper Research Institute, Saharanpur; and it was reported to be of general purpose of wrapping paper and the market enquiry also indicated that the material was butter paper generally used for wrapping and packing (after printing if so required). 14.  Heading 48.06 includes, inter alia, Glassine and other glazed and transparent paper. The evidence placed before us in the form of test report and the market enquiry is required to be consid....
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....emsp;The plea that once a commercial transaction is complete and the goods get transferred from a manufacturer or wholesale dealer to another person the property becomes that of the purchaser, is also of no help because this transfers only ownership and does not in any way absolve, by itself, the responsibility or liability of the manufacturer if the origin of the goods could be traced to him by investigation and it is not denied or it is otherwise established that goods had been manufactured in his factory. 20.  Further, in case of a charge under Rule 9(2) the period specified under 11A of the Act is applicable with reference to the liability in respect of the goods removed from any place specified in Rule 9(1) and the producer thereof is liable to pay duty and also liable to penalty and such goods are liable to confiscation. 21.  Persons who usually deal in the course of trade with a commodity can only be expected to know the type or variety of goods with which they were dealing and the procedure commonly followed in relation thereto (unless proved otherwise). Therefore, in my opinion the charges stand proved and the show cause notice is not hit by time bar as it is a....
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....sp; 23. [Per : S.S.Kang, Member (J)]. - Following difference of opinion is referred to the 3rd Member : "Whether, in view of the observation and findings of Hon'ble Member Judicial, the appeal is required to be allowed or in view of the findings of the Vice President, the appeal is required to be rejected." 24.  In this case the issue is in respect of classification of the paper produced by the appellant. The appellant claimed the classification of Intaglio Paper under Sub-Heading 4802.10 of the Central Excise Tariff and in respect of Opaque Laminating Base Paper under Sub-Heading 4805.90 of the Central Excise Tariff and Revenue wants to classify the Intaglio Paper under Sub-Heading 4806.90 of the Central Excise Tariff and in respect of Opaque Laminating Base Paper under sub-Heading 4806.20 of the Central Excise Tariff. 25.  Heard both sides. 26.  The contention of the appellant is that samples drawn from the seized goods were sent to Central Pulp and Paper Research Institute, Saharanpur and test report in respect of both papers describes these papers as writing and printing paper. The contention of the appellant i....