2002 (1) TMI 436

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.... 27-4-2001) [2001 (135) E.L.T. 842 (T)] and M/s. R.N. Oswal Hosiery Factory v. CCE, Chandigarh (Final Order No. 179/2001-D, dated 10-9-2001) [2001 (138) E.L.T. 1095 (T)]. Therefore, we allow the total waiver of pre-deposit of duty and penalty amount, as detailed in the impugned order of the Commissioner, under appeal, to the appellants. 2. With the consent of both the sides, we proceed to decide the appeal of the appellants on merit. 3. The facts leading to the filing of the present appeal may briefly be stated as under :- The appellants are engaged in the manufacture of woollen hosiery knitwears. On 14-5-96, the preventive staff of Central Excise visited their factory premises. They recorded the statement of Dinesh Gupta....

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....s of the Commissioner that conversion of cones from straight reel hanks yarn amounted to manufacture in terms of Note 3 appended to Chapter 51 of CETA w.e.f. 16-3-95 in view of the law laid down by the Tribunal in Nahar Spinning Mills Ltd. v. CCE, Chandigarh [2000 (121) E.L.T. 400]. 5. However, the Counsel has vehimently contested the duty demand raised through the show cause notice dated 8-11-99 on the question of limitation. According to the Counsel, the demand is apparently barred by time, it pertains to the period 1-4-95 to 31-3-96 while show cause notice was issued only on 8-11-99 and that the extended period of limitation in terms of proviso appended to Section 11A(1) of the Act could not be invoked for want of any specific al....

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....hosiery knitwears. Therefore, the officers of the preventive staff of the Central Excise on the date of their visit came to know about the manufacture of cones from plain straight reel hanks yarn and the captive use of those cones by the appellants in the manufacture of woollen hosiery knitwears. There was no suppression/concealment of material facts by them from the visiting officers. 9. Moreover, even otherwise, there is no material on record to suggest that non-payment of duty on cones by the appellants was on account of any fraud, collusion, wilful mis-statement or suppression of facts with intent to evade payment of duty. It is not the case of the Revenue that Dinesh Gupta, Director of the Company made any mis-statement of the ....

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....or a classification list under Rule 173(b) of the Rules. Shri Dinesh Gupta, as observed above, as far back as on 14-5-96, categorically disclosed to the officers of the central excise at the time of their visit to the factory that yarn received in straight reel hanks firstly was converted into cones on power operated winding machines before being put to use in the manufacture of final product. There is nothing on the record to suggest if at that time the officers who recorded his statement, ever disclosed to him verbally or in writing that cones so manufactured were excisable. Therefore, it can be safely inferred that the appellants were working under the bona fide belief that those cones were not excisable. 12. Therefore, keeping i....