ORDER
S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Original dated 20-9-1989, confirming the duty amount of Rs. 21,958/- and also imposing a penalty of Rs. 25,000/- under Rule 173Q of Central Excise Rules, 1944.
2. The facts of the case are that the appellants were manufacturing new trailers of motor vehicle falling under Chapter 87 of Central Excise Tariff Act, 1985, inside their factory premises. On verification, it was ascertained that they had neither taken out any Central Excise licence for the manufacture of the same nor filed any classification list or price list as required under Central Excise Rules. In reply to the show cause notice, they contended that they have not manufactured trailors but only assembling the same without aid of power. On consideration of their pleas, the Additional Collector rejected their submissions and held that on examination of the goods in question, that they are non-mechanically propelled vehicles equipped with one or more wheels constructed for the transportation of goods and held them to be properly classifiable under Chapter Heading 87.16 with description “Trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof”. He also rejected the plea of time bar and in the circumstances, confirmed the duty amount for clearance for the period stated in the show cause notice and imposed penalty.
3. Arguing for the appellants, the learned Counsel submits that the appellants were under the bona fide belief that the item was not dutiable and further submits that a specific reply from Suptd. dated 21-8-1987 was received to their letter dated 1st Sept., 1987 and therefore, the department was aware of their activities and hence there is no question of attracting larger period.
4. The learned DR submits that the classification adopted by the authorities is quite appropriate and as the appellants had not disclosed and the details even by their letter about their manufacturing of the excisable goods. Therefore, the question of bona fide belief or the department having the information does not arise.
5. On a careful consideration, we are satisfied that the original authority has adopted correct classification in the matter and the goods are correctly classifiable under sub-heading 87.16 of the Tariff. As regards the plea of bona fide belief, we are not impressed with this argument, as the appellants ought to have disclosed about the manufacturing process and other details of the item by filing the classification list and declaration. Even the correspondence does not disclose that they had given all the information required by the department, hence it cannot be said that the department had all the knowledge in the matter. Hence duty has been rightly confirmed for the extended period. However, taking the facts and circumstances the plea and the duty amount being only Rs. 25,000/-, we reduce the penalty to Rs. 5,000/-. Except for this modification, the appeal is otherwise rejected.