ORDER
K.L. Rekhi Member (T)
1. In dispute in this case is the rate of duty applicable to flocked fabrics manufactured by the appellants during the period October 1972 to 19-5-1976. Both sides agree now that such fabrics fell under item 19-1 of the Central Excise Tariff. It is also agreed that the appellants were an independent processor and not a composite mill. But while the Collector has held that the flocked fabrics containing 30% or more of non-cellulosic fibre/yarn attracted the rate of duty under Sub-item (1A) of Item 19-I (which had been introduced with effect from 1-3-1973) and the rest as applicable to cotton fabrics processed in any other manner, the appellants contend that all of their flocked fabrics were entitled to be assessed at the lower concessional rate applicable to cotton fabrics-printed under exemption notification No. 88/69-C.E. dated 1-3-1969. The appellants are also aggrieved by the penalty of Rs. 10 lakhs imposed on them by the Collector after holding them guilty of not taking out central excise licence and non-declaration, non-accountal and unauthorised removal of their flocked fabrics.
2. The process of manufacture of the goods was as follows. The appellants purchased base cotton fabrics of Medium B category from the market, coated them with resin (adhesive) and then affixed thereon flocks (finely chopped fibres of nylon, acrylic or viscose) by electrostatic attraction. The finished flocked fabrics gave the appearance of velvet cloth, imitation suede or leather, depending upon the type of flocking done. The flocked fabrics were used as sofa covers, furnishing cloth and for manufacture of shoes etc. From the point of view of the tariff, they were admittedly cotton fabrics as cotton predominated in the finished fabric. However, coming to the points of detail, while some contained 30% or more of non-cellulosic fibre/yarn (because of nylon & acrylic flocks), the rest contained viscose, besides the cotton base. But all of them were flocked all over the cloth surface with flocks of uniform size and colour.
3. During the hearing before us the appellants pressed for only the following three pleas:-
(1) In respect of flocked fabrics containing 30% or more of non-cellulosic fibre/yarn, the rate of duty should depended on the nature of the fibre/ yarn used in weaving of the base fabrics, which was all cotton in their case, and not on the composition of the finished flocked fabric [Reliance on 1983 E.L.T. 602 (C.E.G.A.T.)-M/s. Ruby Mills Ltd]. Thus, in effect, the nature of the flocks used-whether cellulosic or non-cellulosic -should not matter at all for determining the rate of duty.
(2) Flocking was a process of printing, flock printing to be precise. Flock printed fabrics should, therefore, more appropriately fall in the entry “Printed” in the exemption notification and not in the residual entry “Processed in any other manner” thereof [Reliance on Indian Standard Glossary of Terms Relating to Treated Fabrics, IS: 2244-1972, Textile Terms and Definitions by Manchester Textile Institute, 1975, Collector of Central Excise, Bombay’s Trade Notice dated 23-3-1976 and Board’s Tariff Advice dated 1-12-1978].
(3) The penalty of Rs. 10 lakhs imposed by the Collector was unjustified and, in any case, highly excessive. The history of the dispute as set out in the impugned order would show that the central excise authorities themselves were in doubt as to the correct sub-item of the tariff applicable to their goods. The Gujarat High Court, in the famous Vijaya Textiles case, held that processing of duty paid cotton fabrics, though it amounted to manufacture, did not attract further duty under item 19 but under the newly introduced levy under Item 68 of the tariff with effect from 1-3-1975, that though the Government restored the earlier practice of charging processing duty under Item 19 retrospectively by the Textile Ordinance of 1979 (later enacted as Act 6 of 1980) and though more recently the Supreme Court, in its judgment in the case of Empire Industries Ltd. 1985 (20) E.L.T. 179 (SC), has reversed the Gujarat High Court judgment, these facts were sufficient to show that independent processors like the appellants could have a genuine doubt about any further duty liability on them. Secondly, according to the appellants estimate, the duty as demanded by the Collector would not exceed Rs. 2 lakhs, though the department itself had not yet quantified the amount. In the circumstances, the Collector did not follow a judicial approach when he adjudged the penalty at Rs. 10 lakhs.
4. The appellants added that though the descriptive part of the old item 19-1(1), (1A) and (2) was revised with retrospective effect into the present item 19-I(a) and (b) by the Ordinance of 1979 with the object of validating the processing duty, for rates as applicable to processed fabrics, such as theirs, one had still to look to the corresponding old item and the exemption notification. They also stated that though valution of their finished fabrics was one of the points before the Collector, he left that point to be determined by the lower authority and they had, therefore, no submissions to make regarding the valuation aspect before us.
5. The learned representative of the department relied on the Collector’s order and added that the penalty adjudged by the Collector was justified because there had been total suppression and non-declaration on the part of the appellants which persisted even after the introduction of the residuary tariff item 68 with effect from 1-3-1975.
6. We have carefully considered the submissions made by both sides. Before starting the discussion, it would be worthwhile noticing the tariff item No. 19 as it existed during the material period (1972-76) :
“19. COTTON FABRICS
“Cotton Fabrics” means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chadders, bedsheets, bed-spreads, counter panes, table, cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials but does not include any such fabric if it contains-
(i) 40 per cent or more by weight of wool; (ii) 40 per cent or more by weight of silk; (iii) 60 per cent or more by weight of rayon or artificial silk; or (iv) 50 per cent or more by weight of jute (including Bimlipatam Jute or mehta fibre). Provided that in the case of embroidery in the piece, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial plastic materials, the percentages referred to in (i) to (iv) above shall be in relation to the base fabrics which are embroidered or impregnated or coated, as the case may be. I. Cotton Fabrics other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated or coated preparations of cellulose derivatives or of other artificial plastic materials- (1) Coating, suiting, tussors, corduroy, gaberdine bed-ford, satin, denim, lapet butta fabrics and round mesh mosquito netting, lace, knitted fabric, tapestry, furnishing fabric including jacquard curtain cloth, gadlapot, mattress fabric, terry towel including turkish towel, terry towelling cloth including turkish towelling cloth, blanket, canvas, duck, filter cloth, tracing cloth and bukram cloth. *(1A) Cotton fabrics other than those falling under 1(1) containing 30 per cent or more by weight of fibre or yarn or both of non-cellulosic origin. (2) Others - (a) Cotton Fabrics, Superfine-that is to say, fabrics in which the average count of yarn is 48s or more. (b) Cotton Fabrics, Fine-that is to say, fabrics in which the average count of yam is 35s or more but is less than 48s. (c) Cotton Fabrics, Medium A-that is to say fabrics in which the average count of yarn is 26s or more but is less then 35s. (d) Cotton Fabrics, Medium B-that is to say, fabrics in which the average count of yarn is 17s of more but is less than 26s. (e) Cotton Fabrics, Coarse-that is to say, fabrics in which the average count of yarn is less than 17s. (f) Cotton Fabrics not otherwise specified. II. Embroidery, in the piece, in strips or in motifs, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power. III. Cotton fabrics impregnated or coated with preparation of cellulose derivatives or of other artificial plastic materials. Explanation I.-"Base fabrics" means fabrics falling under Sub-item I of this item which are subjected to the process of embroidery or which are impregnated or coated with preparations of cellulose derivatives or of other plastic materials.
7. Taking up the case of flocked fabric containing 30% or more of non-cellulosic fibre/yarn first, we find nothing in Item 19 to support the contention of the appellants that for the purpose of determining classification under sub-item 19-1 (1A), composition of the fibre/yarn that goes into weaving the fabric alone is relevant and that if such composition undergoes a change due to Introduced with effect from 1-3-1973. subsequent processing, such change should be ignored. No doubt, the proviso in the main definition part of Item 19 says that the percentages of various fibres mentioned therein should relate to the composition of the base fabric, it does so only in relation to the finished fabrics falling in Items 19-11 and III. This is made further clear in the Explanation appended to the item. So far as the fabrics falling under item 19-I are concerned, the percentages have to relate to the fibre/yarn contained in the finished fabric which is the subject matter of assessment. This is in accordance with the well settled principle that unless there is some provision to the contrary in the context, the goods ought to be taxed on the basis of the condition in which they are at the time of removal. This principle has been reiterated by the Supreme Court in a recent judgment in the case of Calico Mills 1985 (21) E.L.T. 633 (SC). In this case, going by the statutory percentages, the goods were cotton fabrics at the intermediate stage but became art silk fabrics at the finished stage. The Supreme Court ruled that the condition of the goods at the intermediate stage was irrelevant and that duty liability should be determined on the basis of the nature and character of the final finished fabrics. We put this judgment to the appellants at the time of arguments. The reply they gave was that the intermediate stage fabrics in Calico Mill’s case were not marketable while the base fabrics purchased by them were marketable. We fail to see how this distinction, if at all it was there, could detract from the general principle that the goods should be taxed in the form they are presented for charge of duty. We have also seen the Tribunal’s order in Ruby Mills’ case which has been relied on by the appellants. Its ratio is exactly the same as that of the Supreme Court judgment aforesaid. Far from supporting the appellant’s contention, it in fact demolishes it. We hold, therefore, that the Collector was right in charging duty under Sub-item (1A), for the period from 1-3-1973 onwards, so far as the flocked fabrics containing 30% or more of non-cellulosic fibre/yarn in the finished fabrics are concerned.
8. For their plea that flocked fabrics should be treated as printed fabrics, the appellants seek to rely, inter alia on the following literature :-
IS : 2244-1972-Indian Standard Glossary of Terms Relating to Treated Fabrics.
Definition of “Printing'” :
“A process of enhancing the appearance of cloth by application of colours, pigments or flocks on cloth to produce ornamental designs or special effects.”
Textile Terms and Definitions by Manchester Textile Institute, 1975:
“A method of cloth ornamentation in which adhesive is printed on the fabrics and finely chopped fibres are applied all over by means of dusting on, an air-blast or electrostatic attraction. The fibres adhere only to the printed areas and are removed from the unprinted areas by mechanical action”.
There can be no doubt that both the above definitions of “Printing” are authoritative and can be taken to represent the trade understanding. But the point is that they do not support the appellants’ contention. As commonly understood, printing means embossing of a design or pattern on the fabric which should stand out from the rest of the cloth surface. This is usually achieved by application of different colours or dyes. It can be done by flocking also-by either partially flocking the cloth or by flocking it all over with flocks of different colours. In either case, the important thing is that some design, pattern or special effect should emerge on the cloth surface. But if flocking is done all over with flocks of the same size and colour, the cloth gives the look of a coloured velvet cloth in which no design or special effect is visible. Just as a piece of fabric uniformly dyed all over in the same colour remains only a dyed fabric and cannot be called a printed fabric, so also a fabric uniformly flocked all over with flocks of the same size and colour remains only a plain flocked fabric without having any design, pattern or special effect. We note that both the definitions extracted above insist on “ornamental designs or special effects” and “cloth ornamentation” being produced as a result of the process of printing. Any fabric not having them cannot be called printed fabric. We do not agree with the appellants that flocking by itself should be treated as printing regardless of the fact that it is done in such a way that it produces no ornamentation design or special effect.
9. We do not agree also that the Trade Notice dated 23-3-1976 of the Collector of Central Excise, Bombay supports the case of the appellants. As stated in the opening paragraph of this Trade Notice, it dealt with the classification of “flock printed art silk fabrics” in respect of which the process employed was of “printing different designs”. The samples of their flocked fabrics which the appellants showed us had no design, ornamentation or special effect which stood out from the rest of the cloth surface. The Trade Notice did not deal with this type of plain flocked fabrics. The Board’s Tariff Advice dated 1-12-1978 came much later than the material period before us (1972-76). But apart from that, when it talked of fabrics flocked all over, it could, in the light of the common understanding and trade parlance as discussed by us in paragraph 8 above, mean only these fabrics which had been flock printed, that is, those in which flocking had been done all over the cloth surface in such a way (as, for example, by employing flocks of different colours) so as to bring out some ornamentation, design or special effect. Without this essential condition being fulfilled, flocking cannot be called flock-printing. We, therefore, agree with the Collector that plain flocked fabrics of the appellants, except those falling under sub-item (1A) attracted duty as applicable to fabrics processed in any other manner.
10. Coming finally to the question of penalty, admittedly there was no declaration or application for licence by the appellants for over three years till they were found out by the authorities sometimes in December 1975-April 1976. They say that they had a bona fide belief that their process of flocking did not amount to “manufacture” and processing of duty paid fabrics by them did not attract any further duty. We are not satisfied that this self-opinionated impression of theirs could be called a bona fide belief when, inspite of a possible controversy between the department and the processors, the independent processors all around them were complying with excise control and were paying the processing duty but the appellants did not as much as disclose even their existence to the authorities, much less seeking any clarification from them. The Gujarat High Court judgment in Vijaya Textiles case (1979 ELT J 181) came much later and even that judgment held that processing of fabrics amounted to manufacture which attracted duty under item 68 which had been introduced with effect from 1-3-1975. From the appellants’ side there had been no voluntary declaration or application even after 1-3-1975. We, therefore, agree with the Collector that the appellants were guilty of suppression and unauthorised removals. Yet we find force in the appellants’ plea that the penalty of Rs. 10 lakhs is excessive when the duty evaded itself comes to about Rs. 2 lakhs. Considering all the facts and circumstances of the case, we reduce the penalty to rupees one lakh (Rs. 1 lakh) only.
11. But for the aforesaid reduction in the amount of penalty, we uphold the Collector’s order and reject this appeal.
G. Sankaran, Vice-President
12. I have perused the order proposed by learned brother Shri Rekhi but I regret I am unable to agree with the conclusions reached therein except as regards the penalty imposed on the appellants which is proposed to be reduced to Rs. 1 (one) lakh only.
13. it is an undisputed position in the present case that the base cotton fabrics were of medium B category. We can, therefore, proceed on the basis that the base fabrics conformed to the composition specifications laid down in the definition of “cotton fabrics” contained in the opening clause of item No. 19 of the Central Excise Tariff Schedule (CET, for short) and fell under sub-item 2(d) of item 191. The question arises whether such fabrics, on being flocked with non-cellulosic fibres, would have fallen for classification under item 19I(1A), CET for the reason that the flocked fabrics contained more than 30% by weight of non-cellulosic fibre. I think “not” for reasons which I shall presently explain.
14. The effect of the retrospective amendments to item 19 CET brought about by the Central Excises and Salt and Additional Duties of Excise (Amendment) Act 1980 (Act No. 6 of 1980) is inter alia to notionally create, as it were, two sub-items of “cotton fabrics”, wherever the expression occurred in the said tariff item-one for cotton fabrics not subjected to any process, and the other for cotton fabrics subjected to one or more of the processes referred to in the amending Act. In the present case, the base cotton fabrics falling under item 19I (2) (d) had already come into existence at the hands of other manufacturers. The appellants purchased such fabrics from the market-there is no dispute about this-and subjected them to flocking. Flocking is comprehended in the term “printing” (see I.S. Standard-IS: 2244-1972-Glossary of Terms relating to Treated Fabrics) which is described as a process of enhancing the appearance of cloth. Flocking, therefore, amounts to processing of cloth, that is, processing of already manufactured fabrics. Thus flocking can be described correctly as a “process” incidental or ancillary to the completion of the manufactured product (flocked fabrics, herein) in terms of the inclusive definition of “manufacture” in Section 2 (f) of the Central Excises and Salt Act not only in the main general definition of “manufacture” but also in the particularised definition of the said term in relation to cotton fabrics” in item 19 CET as retrospectively introduced by the amending Act 6 of 1980-but, it cannot reasonably be deemed, in my view, to be part of the manufacture of the cotton fabric proper since cotton fabric had already come into existence, as we have seen. The flocked cotton fabric would, therefore, fall within the description “cotton fabrics”, subjected to one or more processes…” It is true that the flocking material consisted of non-cellulosic fibre and the finished product-flocked fabric-contained more than 30% by weight of non-cellulosic fibre. But, this would not, in my view, take the flocked fabric from the purview of item 19I (2) (d) into that of item 19 I (1A). This latter item also, in the light of the amending Act 6 of 1980, should be deemed to have consisted of two sub-items, one pertaining to cotton fabrics not subjected to any process and the other to cotton fabrics subjected to one or more of the processes of the type mentioned in the amending Act. The sub-item relating to unprocessed cotton fabrics would cover cotton fabrics in their grey (unprocessed) state if they contain 30% or more by weight of non-cellulosic fibre or yarn or both. When such grey fabric is subjected to any process, including flocking, the resultant processed (flocked) fabric would fall under the sub-item for processed cotton fabrics.
15. That the above view is a reasonable one would gain support, although indirectly, from the fact that when item No. 19 CET was amended in 1980 providing for a specific sub-item (19-IV) for “cotton fabrics covered partially or fully within textile flocks or with preparations containing textile flocks, such as flock printed fabrics and flock coated fabrics” the proviso to the main definition of “cotton fabrics” in the opening clause of item No. 19 CET was also amended to specifically provide that in the case of fabrics covered partially or fully with textile flocks or with preparations containing textile flocks, the specifications as to the percentages of the constituents in the fabric [(i) cotton predominates in weight or (ii) the cotton content of the fibre is more than 40%, by weight and 50% or more by weight of non-cellulosic fibres or yarn or both] shall be in relation to the base fabric which is covered with textile flocks.
16. In the above view of the matter, the subject flocked fabrics would continue to fall under item No. 191 (2) of the Central Excise Tariff as it stood at the relevant time.
17. In Ruby Mills Ltd. Bombay v. Collector of Central Excise, Bombay-1983 E.L.T. 602, the facts, in brief, were that Ruby Mills manufactured a blended fabric containing 28% terene at the grey stage and 31.8% at the processed stage. The assessee claimed classification of the fabric under item No. 19 (1) (2), CET, which was allowed by the Assistant Collector. Subsequently, the authorities sought to revise the classification of the processed fabric to 191 (1 A). One of the processes which the fabric was subjected to resulted in burning out a part of the cotton fibre resulting in the percentage of terene going up to 31.8%. The assessee’s contention was that the composition of the fabric at the grey stage was the elevant consideration and, on this basis, the correct classification would be under item 19 I(2) as “Cotton fabrics, others” and not under item 19 I (1A) as “cotton fabrics containing 30% or more by weight of fibre or yarn or both of non-cellulose origin.”
18. The revenue’s contention, on the other hand, was that where grey fabric falling under item 19 1(2) was processed in the same factory and the processed fabric fell under item 19 I(1A), it was the latter item that was relevant for assessment. The Tribunal held that through the grey fabric might have fallen under item 19 (1) (2), after the fabric was subjected to processing resulting in change in the relative percentages of the constituent fibres or yarn, the non-cellulose fibre content going upto a figure over 30%, the processed fabric was correctly classifiable under item 19 I (1A).
19. It is to be considered whether the ratio of the above decision has application to the facts of the present case. In this connection, it is to be noted that in the Ruby Mills case, it was the same factory which manufactured the grey fabric that processed the grey fabric into one containing over 30% terene. In the case before us, the grey fabric was manufactured by some one else and the assessee purchased it from the market. More importantly, in the Ruby Mills’ case, the composition of the “base” fabric underwent a change as a result of a certain process resulting in liberation of acidic matter which burnt out a part of the cotton fibre present in the fabric resulting in a change in the composition of the “base” fabric. In the case before us, the composition of the “base” fabric has not undergone any change. The short fibre or flocks were made to adhere to the base fabric by a particular process without, however, any change in the composition of the “base” fabric. No doubt the composition of the flocked fabric was not the same as that of the base fabric. However, the situation in the present case is clearly and materially different from that in the Ruby Mill’s case. I do not think that the Ruby Mills decision has any application to the facts of the present case.
20. In Union of India and Ors. v. Ahmedabad Manufacturing and Calico Printing Co. Ltd. (Calico Mills Ahmedabad)-19%5 (21) ELT 633 the facts, briefly stated, were that the Mills were manufacturing a processed fabric known as “Calikut Special”. At an intermediate stage of production of the said fabric, it contained 46% of synthetic fibres and 54% cotton fibres. It was subjected to further processing such as bleaching, heat setting etc. and, at the time when the goods reached the final stage of production, the cotton content was reduced to about 38.42% and the synthetic fibre content went up to 61.52%. Having regard to the cotton content of the final product which was less than 40%, the goods were treated as Art Silk Fabrics under item No. 22 of the Central Excise Tariff Schedule. At some stage, the Central Excise authorities proposed to treat the goods as falling under item No. 19 as cotton fabrics on the ground that at the intermediate stage of production, the cotton content was more than 40% and the synthetic fibre content was less than 60%. The Mills contested the department’s stand by saying that it was the composition of the final product that mattered. On the matter reaching the Gujarat High Court in writ proceedings, the Court directed assessment under item No. 22, agreeing with Mill’s contention. When the matter reached the Supreme Court by special leave, the Court held that the character of the goods at the intermediate stage of production could not be taken into consideration for determining the liability to duty. The processes, after the intermediate stage in the case before the Court, formed an integral part of the manufacture of the product in question and the classification of the manufactured product for the purpose of excise duty, held the Court, should depend upon its nature and character at its final stage of production unless a contrary intention appeared from the statute. On this basis, the Court held that even though the product might have fallen under item No. 19 at the intermediate stage of production, at the final stage when duty became exigible, it became taxable under item 22 only.
21. Again, it is to be noted that in the Ahmedabad Calico Mills case also, it was an integrated process of manufacture and the Supreme Court was adjudicating upon the question whether in an integrated process of manufacture, for the purpose of liability of duty, the composition of the final product was relevant or that of the intermediate product. In the case before us, as we have already seen, the process of manufacture was not an integrated one. The base fabric falling under item No. 19 1(2) was manufactured by some one else, bought by the assessee before us, and subjected to the process of flocking. The facts not being similar, the ratio of the Supreme Court’s decision, in my view, does not apply.
22. Reference was made during the course of the hearing to the judgment of the Allahabad High Court in Flocks (India) Private Ltd. v. Govt. of India and Ors. 1983 ELT 197. The goods therein were flocked fabrics. The competing items were, however, 19 I and 19 III. There was no occasion, because there were no submissions to that effect, for the court to consider item 191(1 A). The court ruled in favour of item 19 I. Therefore, the said judgment would not help us in resolving the dispute before us since, for obvious reasons, the issue was not before the court.
23. The next question is whether such fabrics would be eligible for the concessional rate of duty applicable to printed fabrics. It is seen from the tariff’ advice No. 65/78 that the Board itself considered the question of classification of cotton fabrics whether flocked partially in pattern or flocked all over. It said in the tariff advice that fabric whether flocked partially in pattern or flocked all over would attract excise duty as flocked printed fabrics under item 19I. Turning to the Indian Standard 2244:1972 (Glossary of Terms relating to Treated Fabrics;, we find that “printing” has been defined as “a process of enhancing the appearance of cloth by application of colours, pigments or flocks on cloth to produce ornamental designs or special effects”. The term “printing”, therefore, in relation to treated textile fabrics is seen to comprehend not only what one understands by the conventional sense of the term but also processes by which special effects are imparted to the fabric. The effect of flocking cotton fabrics all over with flocks is to produce a special velvety effect. This apart, tariff item 19-IV (as inserted in the tariff in 1980) also refers to cotton fabrics covered partially or fully with textile flocks or with preparations containing textile flocks as flock printed/flock coated fabrics. It is also seen from the extracts from the book “Textile Fabrics and Their Selection” by Wingate (quoted by the Collector of Central Excise, Bombay in his trade notice No. 39 (MP) Rayon and Silk Fabrics/3/76 dated the 23rd March 1976) that flock printing refers to “the application of short dyed cotton, rayon or wool fibres to fabric or, paper”. Further, the two methods of flock printing are described in the following terms :
(1) “The flock fibres are processed into the resin substance, which has already been printed on the fabrics, and (2) the flock is applied to the resin printed fabric by electrolysis (electrostatics). The second method produces a velvety surface.”
24. The fabrics before us have a velvety surface as a result of being flocked all over. Thus, it would be reasonable to hold that the subject fabrics come within the purview of the term of fabrics subjected to the process of "printing". 25. In the result, I would allow the appeal with a 'direction to the Collector to recalculate the duty liability of the appellant taking into account the above findings. In so far as the penalty levied on the appellant is concerned, I agree with the conclusion reached by brother Shri Rekhi. V.T. Raghavachari, Member (J)
26. I have carefully perused the orders proposed by brother Shri K.L. Rekhi and Vice-President, Shri G. Sankaran. I agree with the reasonings as well the conclusions arrived at by Shri G. Sankaran and, therefore, concur with the order proposed by him. Order.-In accordance with the majority “judgment, the appeal is allowed with the direction to the Collector to re-calculate the duty liability of the appellants taking into account the findings in the majority judgment. The penalty levied on the appellants is reduced to Rs. 1 lakh only.