TaxTMI 
TaxTMI 
1994 (9) TMI 65
X X X X Extracts X X X X
X X X X Extracts X X X X
....liquid paraffin was classified for the purposes of payment of excise duty under T.I. 68 and as a drug intermediate, cleared without payment of excise duty by reason of an exemption notification. 2. On 6th August, 1981, the Superintendent of Central Excise issued to the appellants a notice which stated that they had manufactured and cleared the said liquid paraffin, which fell under T.I. 8, without payment of excise duty thereon. For the period 1st February, 1981 to 31st July, 1981, they were required to show cause why duty in the sum of Rs. 30.677.04 should not be recovered from them and why penalty should not be imposed upon them. An identical notice was issued on the same day for the period 19th June, 1980 to 31st January, 1981; the am....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under T.I. 68 and, under a notification dated 1st March, 1975, was exempt from payment of excise duty. The appellants had been heard. When their representative was questioned about the labelling of the said liquid paraffin, it had become known that the said liquid paraffin was packed in drums which bore a label showing the monogram of the assessee. This indicated the proprietary nexus of the appellants with the said liquid paraffin. The Assistant Collector, therefore, ordered that a demand should issue against the appellants for short recoveries of excise duty, after classifying the said liquid paraffin under T.I. 14E. 4. The appellants filed appeals against the said orders dated 2nd December, 1981 and 3rd September, 1982, before the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....years would be available for effecting short recoveries both under T.I. 8 as well as under T.I. 14E. The appeals were, accordingly, rejected. 5. The appellants carried the matter to the Customs, Excise & Gold (Control) Appellate Tribunal. By its order dated 2nd September, 1983, which is the order under challenge before us, the Tribunal dismissed the appeals. It referred briefly to the facts and arguments. It then observed that there could be little doubt that the assessment under TI 8 was correct and it did not need to spend much time on this. The main dispute, it said, was the assessment of the packed liquid paraffin under TI 14E. In this behalf, the Tribunal agreed with the contention of counsel for the excise authorities that the use ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessee or conscious or deliberate withholding of information when the assessee knew otherwise was required before the assessee could be saddled with any liability beyond the period of six months. Very fairly, Mr. M. Chandrasekharan, learned Additional Solicitor General, appearing for the excise authorities, did not contend that the appellants had been guilty of any fraud or collusion or wilful misstatement or suppression of facts with intent to evade the payment of excise duty. The demand for payment of excise duty for the period 19th June, 1980 to 31st January, 1981, in the sum of Rs. 84,836.35 upon 1,93,056 liters made on 6th August, 1981 must, therefore, fall. 7. Now, it will be remembered that both notices dated 6th August, 19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng' amounts to manufacture so far as the Tariff Item 14E is concerned, the product will be liable to pay the further duty under Tariff Item 14E after packing and labelling, in addition to duty under item 8(a) before such packing or labelling". The Tribunal upheld the order of the Collector (Appeals). At no earlier point of time were the appellants intimated that they were being asked to pay excise duty on the said liquid paraffin at two stages; first, when it was manufactured and then when it was packed and labelled. The only controversy when the matter went to the Collector (Appeals) was whether the said liquid paraffin fell within T.I. 68 as the appellants urged or it fell under T.I. 8 as one Assistant Collector held or under T.I. 14E as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r (b) Vaporizing oil Five hundred rupees per kilolitre at fifteen degrees of Centigrade thermometer. Explanation 1 - The expression "mineral oil", "flashing point" and "flame height" have the meanings respectively assigned to them in Explanations I and II of Item No. 8 and in Explanation II to item No. 7. Explanation II - This item does not include - (a) base mineral oils (suitable for use in the manufacture of lubricating oils and greases) including mineral oils commonly) known as transformer oil base stock or Transformer oil feed stock; and (b) lubricating oils including spindle oils, flushing oils and jute batching oils. 10. The Deputy Chief Chemist having opined that....