2004 (8) TMI 565

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....ng penalty of Rs. 10,000/- on the Managing Partners of the appellant-factory under Rule 173Q of Central Excise Rules. The appellants are manufacturers of Thermoformed Disposable Plastic Containers falling under Sub-heading No. 3923.90. The raw material is Polystyrene granules falling under Chapter 3903.10 purchased by the assessee. While manufacturing the final product Thermoformed Disposable Plastic Containers, an intermediate product Polystyrene sheets arises which the Department says is classifiable under CSH 3920.31 of the Tariff. The appellants have not disputed the correctness of the classification of the product. The Department has initiated proceedings for the larger period by issue of show cause notice dated 27-8-2001 for the perio....

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....ls of manufacturing process including the occurrence of sheets, yet he found fault with the appellants in not paying duty on the Polystyrene sheets. Hence, he proceeded to hold that the demands were maintainable for larger period and confirmed the same and has imposed penalty. He has not considered the Apex Court judgment and the Tribunal judgments on time-bar relied by the assessee. 3. We have heard Shri Sreedharan, Advocate for the appellants and Shri P.M. Saleem, SDR for the Revenue. 4. Ld. Advocate pointed out to the Explanation to Sl. No. 70 of the Notification No. 5/99, which reads as follows: - "Any clearances for exports or any clearances of goods exempted from duty or chargeable to Nil rate of duty shall not be i....

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....t Polystyrene sheets are not eligible to the benefit of Notification in terms of the notification conditions and interpretation placed by the Counsel is not acceptable. So far as the issue of time-bar is concerned, he re-iterated the findings given by the Commissioner in the impugned order. 7. On a careful consideration of the submission and on reading of the Explanation to Notification No. 5/99-C.E., dated 28-2-2002 and Proviso to Notification No. 67/95-C.E., dated 16-3-1995 we are of the considered opinion that any clearances for exports or any clearance of goods exempted from duty are chargeable to nil rate of duty alone shall not be included in computing the aggregate value of clearances. The exemption provided under Notificatio....

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....f their products in their early stage. The Annexure to this letter is the declaration on the process of manufacture. They have mentioned in column 9 as follows: - "Process of manufacture: 1. A sheetline produces sheet on reels from granulate (High impact Polyestyrene). 2. This sheet can be formed to produce products in a thermoforming machine. 3. The shape of the product is dependent on the mould in the thermoforming machine. 4. The products are printed with dry offset printer (if required). 5. The products are ready to be packed." The same has been acknowledged by the Department on behalf of the Assistant Commissioner of Central Excise. Again the appellants have by their letter dated 21-11-1996 addressed to Superintendent, has given ....