ORDER
P.C. Jain, Member (T)
1. Briefly the facts of the case [are] as follows :-
1.1 The appellants are manufacturers of Solenoid valves and other products. These products were classified under Tariff Item 68 till 28-2-1986 and thereafter under Tariff Heading 8481.80. The appellants are duly registered as SSI factory and had been availing the benefit of relevant notification as applicable to SSI factories. During 1-3-1985 to 28-2-1986 the appellants were availing of the concession applicable to SSI factories vide Notification No. 77/85. This notification was rescinded by Notification No. 180/86 w.e.f. 1-3-1986. Simultaneously, however, another Notification No. 175/86 dated 1-3-1986 was made applicable. The appellants herein filed a classification list consequent to this change and got the rates approved by the department. However, by another Notification 202/86 the earlier Notification 175/86 was suspended for the period 25-3-1986 to 31-3-1986. Notification 213/86 dated 25-3-1986 became operative for the aforesaid period 25-3-[1986] to 31-3-1986. In other words, the effective rates of duty for the period 25-3-[1986] to 31-3-1986 are determined by the two Notifications 175/86 and 213/86. The appellants have contended that they were not aware of Notification 213/ 86 and therefore, did not file a revised classification list on the basis of the Notification 213/86 and they continued to pay duty on the basis of the earlier approved classification list on the basis of Notification 175/86 during the concerned period 25-3-1986 to 31-3-1986.
1.2 The appellants filed their R.T. 12 return for the month of March indicating payment of duty as per the approved classification list based on Notification 175/86.
1.3 A demand was raised by the Superintendent of Central Excise by his letter dated 18-1-1989 demanding the differential for the period 25- 3-1986 to 31-3-1986. On appeal before the Collector of Central Excise (Appeals) the appellants herein succeeded by getting the matter remanded with a direction to the Revenue to issue a proper show cause notice under Section 11A for demand of duty. Hence a show cause notice was received on 9-11-1990 alleging short payment of excise duty during the period 25-3-1986 to 31-3-1986.
1.4 The original authority has upheld the demand of duty of Rs. 29,713.15p under proviso to Sub-section (1) to Section 11A of the CESA, 1944 on the ground that the appellants deliberately did not file the classification list at a higher rate in terms of Notification No. 202/86 read with Notification 213/86 dated [25-3-1986] and therefore, the larger period of five years for demand of duty was invokable. It was the duty of the assessee to observe the provisions of relevant notification under which the assessee intended to avail.
2. As against this finding on the plea of time bar, learned advocate for the appellants has submitted that the aforesaid finding of the adjudicating authority is erroneous in the available facts and circumstances. The appellants had duly submitted R.T. 12 returns for the month of March 1986 as usual. Excise gate passes were also issued claiming effective rates as applicable under Notification 175/86 as per the approved classification list. R.T. 12 returns for the month of March 1986 have been duly assessed. In the facts and circumstances, it cannot be held, submits the learned advocate, that any wilful mis-statement or suppression of facts has taken place. Mere non-filing of classification list after issue of Notification 213/86 cannot be considered to be wilful suppression of facts or mis-statement of facts. Department was also aware about the issue of the said notification and suitable directions could be issued to the appellants in that respect. Learned advocate has, therefore, submitted that it is merely a case at best of oversight and no wilfulness can be read into the omission of the appellants.
3. Learned JDR, on the other hand, reiterates the findings of the adjudicating authority, as set out above.
4. We have carefully considered the pleas advanced on both sides. In the aforesaid facts and circumstances, we agree to the submissions of the learned advocate. Issue of Notification 213/86 and 202/86 was also well within the knowledge of the department. Non-submission of the classification list by the appellants after issue of the said notifications cannot be considered to be an act of wilfulness particularly when they had filed the relevant R.T. 12 alongwith Excise gate passes. R.T. 12 was also duly assessed by the concerned Range Superintendent. If there was an omission on the part of the appellants to file any classification list consequent to issue of Notification 213/86, the department was also duty-bound to point out the same to the appellants or proper assessment could be made after due observance of the procedure on R.T. 12 itself. Accordingly, we hold that the appellants cannot be laid open to the charge of wilful mis-statement or suppression of facts or with an intent to evade payment of duty, as set out in proviso to Section 11A(1) of the Act. Demand of duty is, therefore, time-barred without going into the question of merits of assessment and we hold accordingly. Hence, appeal is allowed.