TaxTMI 
TaxTMI 
2006 (8) TMI 190
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct, to which a reply was sent by it in terms of its letter dated 7-12-1994 disclosing the manufacturing process stating : "Brief Manufacturing Process of Paper Based Laminated Sheets The process of manufacture of the above products involving in three major stages is as under : 1. Preparation of Reactive Mixtures like (i) Melamine formaldehyde and (ii) Phenol formaldehyde. The reactive mixture process involves mixing of Melamine Powder with Formaldehyde and Phenol with Formaldehyde in separate chemical reaction vessels, separately under high steam pressure and continuous sterling. The reactive mixture are used for treatment of various papers, used for the manufacture of paper based laminated sheets. 2. Paper treating process : Under the process absorbent Kraft paper is treated with Phenol Form-aldehyde reactive mixture and Overlay Tissue paper and design prints or colour base papers are treated with Melamine formaldehyde reactive mixture under stream through chemical treating and drying machine. 3. Hydraulic pressing process This process is the last and final one which involves hydraulic pressing of various layers chemical mixture treated papers under high hydraulic pressure ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ply thereto was also sent by the Respondent by a letter dated 22-12-1994 stating : "It is intimated that we are using Phenol, Melamine and Formaldehyde falling under Chapter 29 of Central Excise Tariff. Further, it is clarified that a gluing solution is obtained by mixing of phenol and formaldehyde and melamine and formaldehyde. At no stage any product known as plastic or marketable as plastic comes into existence. We are as such not using plastic as an input in the manufacture of paper based laminated sheets." 6.The question as to whether the product manufactured by the Respondent would fall under Chapter 39 or Chapter 48 of the Central Excise Tariff Act came up for consideration before this Court in Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd. [(1997) 10 SCC 350] wherein it was held that in respect of such products classification as provided for in Entry 39.20 would be applicable, stating : "Note (d) clearly provides that products consisting of glass fibres or sheets of paper impregnated with plastics and compressed together as in the present case, if they have a hard and rigid character, would fall under Chapter 39. If they have more the character of paper or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....na fide feel, at any stage that they are using any plastic product for the impregnation of the paper sheets. They had been using phenol for formaldehyd and other additives for preparation of a solution with which the paper was being treated to obtain paper based laminated sheets. The Hon'ble Tribunal in the case of Meghdoot Laminates P. Ltd. v. C.C.E. 1990(49) E.L.T. 75 had held that the products are classifiable under Chapter 48 and not Chapter 39 and accordingly entire industry had classified products under chapter heading 4823.90 and availed the benefit of Notification No. 135/89 dt. 12-5-89, which also referred to the products to be falling under sub-heading 4823.90. Since the duty had been paid by availing the benefit of Notification No. 135/89 as per practice being followed in the industry and as per approval of classification list granted by the competent authority it cannot [Emphasisbe said that exemption has incorrectly been availed." supplied] 11.It was further stated : "..The solution of Phenol Formaldehyd and Melamine was being prepared in house and it was being considered in the industry as Resin and was honestly described as such in the classification list." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had adopted the same manufacturing process and had been extended the benefit of the Exemption Notification of 1989 has not been called in question. If the stand of the manufacturer is correct, there was no reason as to why it should be singled out. 17.This Court decided Bakelite Hylam Ltd. (supra) on 10th March, 1997. The impugned notice was issued only on 9-12-1997 evidently relying on or on the basis thereof. 18.It is not a case where the Respondents had not disclosed the activities of manufacturing products carried out by them by declaration or otherwise. They responded to each and every query of the Appellant, as and when called upon to do so. The authorities of the Appellant must have verified the said disclosures. At least they are expected to do so. The disclosure made by the Respondent was acceptable to them. Their bona fide was never questioned. 19.The applicability of the extended period of limitation is, therefore, required to be considered in the aforementioned context. Proviso, it is trite, provides for an exception. It is not the rule. A case, therefore, has to be made out for attracting the same. 20.In Primella Sanitary Products Pvt. Ltd. v. Collector of C.Ex., G....