TaxTMI 
TaxTMI 
2025 (3) TMI 1182
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....ring the period 01.04.2012 to 31.03.2017. In the same order, he also decided the follow up statement demand dated 08.05.2019 covering the period 01.04.2017 to 30.06.2017. The entire period in the statement of demand was within the normal period. 2. The issue in dispute is regarding the classification of goods namely Student Almanac and teacher planner, Diaries, Workbook, Calendars, Note-Pads and Scrap books. The appellant printed these goods and removed them at nil rate of duty classifying them under Chapter 49 of the Schedule to the Central Excise Tariff Act, 1985 [CETA], which Chapter covers printed books, newspapers, pictures and other products of printing industry. 3. The case of the Department is that these goods fall under Chapter 48 as "Articles of Paper or of Paper Board" and attract duty @ 12.5% ad valorem. It is also the case of the department that the assessee had wrongly not paid duty and, therefore, the extended period of limitation was invokable and that Shri Kishore Mittal, the Director of the assessee was liable to penalty under Rule 26 of the Central Excise Rules, 2002 [the Rules]. 4. The details of the goods and the duty demanded are as follows :- Sl. ....
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....Central Excise Rules, 2002 is set aside ; (d) The remaining part of the impugned order-in-original dated 30.09.2022 will remain same as before". 9. We have heard learned counsel for the assessee and learned authorized representative for the Revenue and perused the records. Submissions by the assessee :- 10. Learned counsel for the assessee made the following submissions :- (i) The assessee is a printer who prints on paper and manufactures various articles of printing and was paying central excise duty on certain goods, such as, exercise books classifiable under Chapter 48 and on certain other products, such as, calendars, drawing books, diaries which are classifiable under Chapter 49. It was not paying duty on letter pads and note pads, note books, Student Almanac and teacher planner and scrap book. These are correctly classifiable under Chapter 49 as articles of printing and therefore no duty was chargeable. In the impugned order, the Commissioner (Appeals) gave only part relief to the assessee upholding the demand of duty on Student Almanac and teacher planner only. Both these are classifiable under Chapter 49. (ii) As per Chapter Note 12 to Ch....
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....or Revenue made the following submissions :- (i) The Commissioner (Appeals) erred in dropping the demand for extended period of limitation and setting aside the penalty under Rule 26 of the Central Excise Rules on Shri Kishore Mittal, Director of the assessee. (ii) The assessee neither declared the sale of all types of goods nor paid duty on them in its ER-1 returns nor informed the department about these products in any manner. Had the enquiry not been conducted and had the officers not visited the place of the assessee, the fact that the assessee was manufacturing Student Almanac and teacher planner would not have come to light at all. Quite clearly, the assessee intentionally suppressed the fact with an intent to evade payment of duty on these goods. Suppression of facts with an intent to evade under section 11A (4) is clearly evident in this case. The Commissioner (Appeals), therefore, erred in dropping the demand for the extended period of limitation. (iii) Considering the intention of the assessee, its Director Shri Kishore Mittal was liable to penalty under Rule 26 which has also been wrongly dropped by the Commissioner (Appeals) in the impugned or....
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.... those which are paper and paper products falling under Chapter 48, and products of printing industry falling under Chapter 49. It must be noted that even products which are primarily paper and paper products may have some printing on them. For instance note books will have lines printed on them and on the cover etc. Similarly, even products of printing industry, such as, books may have some blank space to write one's name, etc. or extra pages to make additional notes. What needs to be seen is what is primary purpose of the good. Is it primarily meant for a person to read, such as a text book which may have some extra space to make notes, or is it primarily something meant to be used as an article of paper, with some material also printed in it. 15. Chapter Heading 4820 of the Central Excise Tariff reads as follows :- 4820 Registers, account books, note books, receipt books, letter pads, memorandum pads, diaries and similar articles, excise books, blotting pads, binders (loose-leaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paper board; albums for samples or for collections and book covers....
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....nded period of limitation :- 19. The Commissioner (Appeals) recorded the following findings on the question of extended period of limitation :- "5.5 From the above, it can be seen that there was indeed difference of opinion even among various Commissionerates regarding classification of Text books, Printed work text books etc., which are similar to the impugned items in the present appeals. Therefore, I note that classification of the impugned items under Chapter 48 and 49 was not unambiguous and remained under continuous litigation during the period under dispute. I further find that the Student Almanac and teacher planner were being mentioned by the appellant M/s Sona Printers in their VAT declarations, and it is not the case of the department that these were being clandestinely removed by M/s Sona Printers. From the above discussion & judicial pronouncements, I note that the appellants stopped paying the Central Excise duty on Student Almanac/teacher planner under Chapter 4820, under the bona fide belief that the same is not required to be paid, not realizing that the same should have been paid by them. I find that it is not the case, where prescribed return....
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....yment of duty and for that reason the assessee had willfully suppressed facts. Therefore, extended period of limitation was correctly invoked. 21. Learned counsel for the assessee on the other hand supports the impugned order on the question of limitation. 22. We have considered the submissions advanced by both sides and have perused the records. 23. We agree with the finding of the Commissioner (Appeals) in the impugned order that there was no evidence of intention to evade payment of duty and suppression of facts because it was possible for the assessee to have entertained the belief that the Student Almanac and teacher planner were not exigible to duty and, therefore, to have NOT declared them in their excise returns. 24. In view of the above, we find that the question of limitation in favour of the assessee and against the Revenue and the impugned order needs to be upheld in so far as this limitation is concerned. Consequently, we find that the penalty under section 11AC was also correctly set aside by the Commissioner (Appeals) in the impugned order. Penalty under Rule 26 of the Central Excise Rules of the Central Excise Rules on Shri Kishore Mittal, Director of....