ORDER
P.G. Chacko, Member (J)
1. M/s. Aeon’s Construction Products Limited (AEON’S), the appellants in Appeal No. E/485/2001 are manufacturers of concrete blocks, both hollow (light weight) and solid (heavy weight). The dispute in this case relates to heavy weight blocks of interlocking type, which were used for paving floors. AEON’S classified these blocks under heading 68.07 of the Central Excise Tariff Act Schedule for the period prior to the 1997 Budget and under sub-heading 6807.20 of the said Schedule for the subsequent period and cleared the goods on payment of duty in terms of Notification No. 36/94-C.E., dated 1-3-1994 (as amended) for the pre-Budget period and in terms of Notification Nos. 15/97-C.E., dated 1-3-1997, 5/98, dated 2-6-1998 (as amended) and 5/99 dated 28-2-99 for the post-Budget period. These clearances covering the period April, 1994 to September, 2000 were taken up by the department for an investigation. It appeared to the department from verification of the appellants’ records and allied enquiries that the goods had been misclassified by the party with intent to claim undue benefit of the above Notifications. Therefore, the department issued the following three show-cause notices to the party:
(i) Show-cause notice dated 11-10-1999 issued by the Commissioner of Central Excise demanding differential duty on concrete blocks for the period 1994-1995 to 1998-1999.
(ii) Show-cause notice dated 4-11-1999 issued by the Superintendent demanding similar duty for the period April to September, 1999.
(iii) Show-cause notice dated 20-11-2000 issued by the Superintendent raising similar demand for the period November 99 to September, 2000.
The above show-cause notices proposed to recover differential duty from the assessee by denying the benefit of concessional rate under the aforesaid Notifications. The first show-cause notice invoked the extended period of limitation in terms of the proviso to Section 11A(1) of the Central Excise Act by alleging suppression of facts. The demands raised in the second and third show-cause notices were within the normal period of limitation prescribed under Section 11A(1). All the notices proposed to impose penalties on the assessee, the Commissioner’s show-cause notice invoking both Section 11 AC and Rule 173Q and the Superintendent’s notices invoking only Rule 173Q for the purpose. The show-cause notices were seriously contested. With regard to the notices issued by the Superintendent, it was, inter alia, contended that the notices were issued without jurisdiction. On the proposal for demanding differential duty on the subject goods and imposing penalties, the assessee raised numerous grounds in their reply to the notices. After rejecting the preliminary objection (as to jurisdiction) raised by the assessee, the Commissioner passed a common Order in adjudication of the three show-cause notices after hearing them. In this connection, it needs to be mentioned that the two notices issued by the Superintendent were rightly included for adjudication in terms of Board’s Circular No. 362/78/97/CX, dated 9-12-1997, wherein it was decided that where different cases of the same noticee involving the same issue were due to be adjudicated in a Commissionerate, all such cases would be adjudicated by an officer competent to decide the case involving the highest amount of duty. The Commissioner, in his order, confirmed demand of duty to the extent of Rs. 1,01,23,723/- against the assessee after allowing abatement of duty from assessable value in terms of Section 4 (4)(d)(ii) and imposed on them penalties of Rs. 83,18,399/- and Rs. 20 lakhs under Section 11AC and Rule 173Q respectively. The appeal of AEON’S is against this decision of the Commissioner. In Appeal No. E/171/02 filed by the department, the appellant has challenged grant of the benefit of Section 4(4){d)(ii) to the assessee.
2. Heard both sides. ld. Counsel for the assessee challenged the demand of duty for the period 1994-1995 to 1998-1999 on the ground of time-bar. As regards the two show-cause notices issued for the subsequent period, he argued that those notices wherein misdeclaration was alleged against the assessee ought to have been issued by the Commissioner. Ld. Counsel also challenged the entire demand on merits. Ld. SDR argued in defence of the adjudicating authority’s findings except in respect of the assessee’s claim for abatement of duty under Section 4(4)(d)(ii). Case law was profusely cited from both sides to buttress their respective standpoints. We shall consider the submissions in relevant contexts in the course of our discussion vide infra.
3. Ld. Counsel has raised a jurisdictional objection with regard to the show-cause notices issued by the Superintendent. These show-cause notices which demanded duty for the normal period of limitation did not invoke the proviso to Section 11A(1) of the Central Excise Act, 1944. They, however, alleged that AEON’S misdeclared their commodity viz. “solid concrete blocks” under tariff sub-heading 6807.20 (as blocks used in pre-fabricated buildings) attracting lesser rate of excise duty. Counsel has argued that, on account of this allegation, the notices should have been issued by the Commissioner. According to him, the Superintendent had no jurisdiction to issue any show-cause notice containing allegation of misdeclaration against the noticee. In this connection, ld. Counsel has relied on the Supreme Court’s judgment in the cases of Collector v. ONGC [1998 (103) E.L.T. 3 (S.C)] and Collector v. Alcobex Metals [2003 (153) E.L.T. 241 (S.C.). He has also relied on the Tribunal’s decision in Rubber Complex (India) Ltd v. CCE [1999 (111) E.L.T. 716 (Tribunal). We observe that ld. SDR has been able to distinguish the cited cases successfully. What was held in ONGC’s (supra) case was that only the Collector of Central Excise was competent to issue a Notice under the proviso to Section 11A(1) of the Act. Both the show-cause notices under reference were admittedly issued for normal period prescribed in the main part of Section 11A(1) of the Act, without having to invoke the larger period of limitation prescribed under the proviso thereto. In the case of Alcobex Metals (supra), however, it was held by the Apex Court that, if fraud, collusion, misstatement of fact etc., were alleged in the show-cause notice, the competent authority to issue such notice would be the Collector of Central Excise irrespective of whether the notice was issued within the normal period of limitation or thereafter. This ruling also does not appear to be applicable to the facts of the instant case inasmuch as no allegation of fraud etc. was raised in any of the two show-cause notices in question. Ld. Counsel has argued that the alleged “misdeclaration” is akin to, if not synonymous with, the expression “mis-statement” used in the proviso to Section 11A(1) and, therefore, the show-cause notices containing the allegation of misdeclaration should have been issued only by the Commissioner of Central Excise. Again, we are unable to accept this argument inasmuch as misdeclaration (wrong declaration) of a tariff entry cannot be equated with misstatement of a fact with fraudulent intent. The former viz. misdeclaration of tariff entry might not lead to fraud on the Revenue as correct tariff classification of goods is ultimately the Revenue’s burden, diligent discharge of which by the Revenue would safeguard the Revenue’s interests. On the other hand, misstatement of material facts with intent to evade payment of duty can possibly defraud the Revenue. For this very reason, the Tribunal’s decision in the case of Rubber Complex (supra) also does not appear to be supportive of the asseesee’s case. In that case, the expression “clandestine” was held to be akin to expressions like fraud used in the proviso to Section 11A(1). We do not think that wrong declaration of a tariff entry attracting lesser rate of duty can be equated with fraud, suppression etc. which are expressions with the element of mens rea inbuilt therein. We further observe that, in the case of Rubber Complex (supra), the show-cause notice was accompanied by a corrigendum whereby adjudication of the case was transferred from the Assistant Commissioner to the Additional Commissioner, from which fact it is obvious that the Revenue had envisaged the notice as one under the proviso to Section 11A(1) ibid. For the aforesaid reasons, ld. Counsel’s argument that, on account of the allegation of misdeclaration in the subject show-cause notices the Superintendent was not competent to issue the notices, cannot be accepted. We hold that the Superintendent was competent to issue the show-cause notices.
4. Turning to the merits of the case, we notice that AEON’S claimed the benefit of concessional rate of duty for the subject goods in terms of clause (b) of Sl. No. 1 under Notification No. 36/94-C.E., dated 1-34994 for the period up to 28-2-1997 and in terms of Clause (2) of Sl. No. 117 under Notification No. 5/97-C.E., dated 1-3-1997. The Revenue was of the view that the goods attracted Sl. No. 2 under Notification No. 36/94-C.E. and Sl. No. 118 under Notification No. 5/97-C.E. The rival entries under each of the Notifications are extracted below:
———————————————————————–
Notification Sl. Heading Description of goods Rate of
No. 36/94- No. duty
C.E. -----------------------------------------------------------
(1) (2) (3) (4)
-----------------------------------------------------------------------
1. 68.07 (a) The following goods : Nil
(i) Articles of Mica;
(ii) Mosaic tiles, that is to say,
tiles known commercially as 'mosaic
tiles';
(iii) Goods manufactured at the
site of construction of buildings
for use at such site.
(iv) Lightweight (solid or hollow)
concrete building blocks.
(b) Blocks, slabs, lintels, con- 10% ad
crete beams and stairs constituting valorem
intermediates and components of pre-
fabricated buildings falling under
heading No. 94.06
(c) Floor Coverings in rolls or in 30% ad
the form tiles
2. 68.01 to All Goods excluding the following 20% ad
68.07 namely: volrem
(i)Goods specified against S. No. 1 above
and
(ii) All goods falling under heading No.
68.04
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Notification Sl. Chapter Description of goods Rate
No. 5/97-C.E. No. or Head- duty
ing No.
or Sub-
heading
No.
----------------------------------------------------------
(1) (2) (3) (4)
-----------------------------------------------------------------------
117. 68 (1) Goods in which more than 25% by 8%
weight of red mud, press mud or blast
furnace slag or one or more of these
materials, have been used.
(2) Blocks, slabs, concrete beams and 8%
stairs of a kind used in prefabricated
buildings of heading No. 94.06
118 69 All goods other than those mentioned 18%
against S. No. 117
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5. It is noteworthy that the expression “constituting intermediates and components of” used in the pre-Budget Notification was substituted by “of a kind used in” for the post-Budget period. In this context, it is also noteworthy that the description of goods covered by Clause (2) of Sl. No. 117 under Notification No. 5/97-C.E. was adopted, for sub-heading 6807.20 inserted in the Central Excise Tariff with effect from 1-3-1997 under the Finance Act, 1997. Ld. Counsel has argued that, insofar as “blocks” and like items mentioned before “concrete beams and stairs” are concerned, the expression “constituting intermediates arid components of prefabricated buildings” in Sl. No. 1(b) of Notification No. 36/94-C.E. 1 and the expression “of a kind used in prefabricated buildings” in Sl. No. 117(2) of Notification No. 5/97-C.E. have to be read disjunctively by virtue of the comma occuring just before “Concrete beams and stairs” in each entry. According to ld. Counsel, the said expressions are meant only to qualify “concrete beams and stairs” and are not intended to qualify the “blocks” etc. The purport of this argument is that the blocks mentioned at in Sl. No. 1(b) of Notification No. 36/94-C.E. for the period prior to 1-3-97 and in sub-heading 6807.20 (equivalent to Sl. No. 117 (2) of Notification No. 5/97-C.E.) for the subsequent period need not be intermediates/components of prefabricated buildings for the former period and need not be of a kind used in such buildings for the latter period. In other words, the blocks manufactured and cleared by the appellants are per se eligible for concessional rate of duty in terms of Sl. No. 1(b) of Notification No. 36/94-C.E. as well as Sl. No. 117(2) of Notification No. 5/97-CE for the respective periods. Ld. Counsel has pointed out that the appellants had taken such a view as early as in 1996 in a letter sent to the department. Ld. Counsel has also sought to draw support from HSN explanatory notes on Heading 68.10 to his argument that the concrete blocks in question per se would be entitled to the benefit of concession under the Notifications, without there being any need for the appellants to fulfil any condition of constituting intermediates and components of prefabricated buildings or any condition of being of a kind used in such buildings. Ld. Counsel has also attempted to invoke the rule of noscitur a sociis to fortify his plea of disjunction (“comma”- based argument). Finally, ld. Counsel has relied on the Tribunal’s decision in Vinayaka Impex v. Commissioner of Customs, Madras [1998 (101) E.L.T. 660 (T)]. We are unable to accept the Counsel’s argument that the comma preceding “concrete beams” in the description of goods covered by Sl. No. 1(b) of Notification 36/94-C.E. and Sl. No. 117(2) of Notification No. 5/97-CE. is disjunctive. That comma is only a conjunctive punctuation. Moreover, the conjunction “and” used between “concrete beams” and “stairs” in each entry connects all the items, from blocks to stairs, all of which are qualified by the expression which follows. We find that, in relation to a similar Notification, this Tribunal has recognised this position in the case of CCE v. Excon Bldg. Material Mfg. Co. Pvt. Ltd. [1999 (112) E.L.T. 516 (T)] wherein the issue was whether hollow concrete blocks manufactured by the said company were eligible for exemption under Notification No. 64/88-C.E., dated 1-3-1988. The assessee in that case had claimed the benefit of concessional rate of duty in terms of Sl. No. 3 of the said Notification. [The description of goods covered by Sl. No. 3 is identical to that covered by Sl. No. 1(b) of Notification No. 36/94-C.E.]. The Tribunal held that as the “hollow concrete block’s” manufactured by the assessee did not qualify to be intermediates or components of prefabricated building, they were not eligible for the benefit of exemption under Notification No. 64/88-C.E. In holding so, the Tribunal considered that the item “blocks” occurring in the description of goods was qualified by the expression “constituting intermediates and components of pre-fabricated buildings”. In view of the Tribunal’s decision in Excon case (supra), ld. Counsel’s argument that the Concrete Blocks in question were per se eligible for the benefit of exemption under Notifications No. 36/94-C.E. and 5/97-C.E., without there being any obligation for the appellants to show that the blocks constituted intermediates and components of pre-fabricated buildings or that they were of a kind used in pre-fabricated buildings cannot be accepted. Ld. Counsel has relied on the Tribunal’s decision in Vinayaka Impex (supra), wherein the description of goods covered by Sl. No. 1 of Notification No. 30/95-Cus. had arisen for interpretation. This description reads as under :-
“Woven pile fabrics, chenille fabrics, terry towelling and similar woven terry fabrics, including narrow woven fabrics of width not exceeding 30 cm. and not containing elastomeric yarn or rubber thread.”
The Tribunal held that the expression “narrow woven fabrics” could not be read in conjunction with the preceding expressions such as woven pile fabrics as there was a comma after each expression. We notice that the expression “narrow woven fabrics” which accompanies the word “including” belongs to an inclusive clause and nothing contained in the inclusive clause is applicable to the outlying expressions such as “woven pile fabrics”. Obviously, there is nothing in common between the Notification provisions considered in Vinayaka Impex (supra) and the Notification provisions being considered in the instant case. The reliance placed by ld. Counsel on Vinayaka Impex (supra) is, therefore, misconceived. We also do not think that the instant case is a good case for application of the rule of “noscihir a sociis” nor for invoking HSN explanatory notes. The rule of “noscitur a sociis” means that, when two or more words which are susceptible to analogous meaning are coupled together, they are understood to be used in their cognate sense. Such words should take colour from each other i.e. the more general gets restricted to a sense analogous to the less general. The meaning of a doubtful word may be ascertained by reference to the meaning of the words associated with it. This rule is not to be applied where the provision of law to be construed is clear and unambiguous, as held by the Tribunal’s Larger Bench in the case of Commissioner v. Surya Roshini Ltd. [2001 (128) E.L.T. 293 (Tri-LB)] cited by ld. SDR. We find no ambiguity in the meaning of the description of goods at Sl. No. 1(b) of Notification No. 36/94-CE, or at Sl. No. 117(2) of Notification No. 5/97-C.E. The legislative intent is clear from the language used for describing the goods. The intention behind the above provisions of the Notifications was to provide concessional rate of duty for intermediates and components of prefabricated buildings falling under heading 9406 for the period prior to 1-3-1997 and for structural items of a kind used in pre-fabricated buildings for the subsequent period. In the instant case, the Commissioner found that AEON’S did not adduce any evidence to show that their concrete blocks constituted intermediates and components of prefabricated buildings for the period prior to 1-3-1997 and were of a kind used in such buildings for the subsequent period. This finding of the Commissioner has not been rebutted by the assessee. The car factory building of M/s. Hindustan Motors Limited, in which such blocks were shown to have been used, was, however, not shown to be a “prefabricated building” within the meaning of Note 4 to Chapter 94 of the Central Excise Tariff.
6. It was argued by ld. Counsel that the Concrete Blocks in question were to be held to be of a kind used in prefabricated buildings by virtue of their special characteristics, without there being any need of evidence. The characteristics of the Blocks, stated by the Counsel, are that:-
(i) They have interlocking devices for easy fabrication of building.
(ii) Cement mortar is not required to bond the blocks, which are laid on a compacted sand bed with a gap of 3 mm. between blocks, which is filled with fine sand,
(iii) Blocks are suitable for speedy fabrication of building as they are easy to be assembled.
Obviously, the Counsel’s argument is for paving blocks which are paved on open floor/ground. But any such floor/ground paved with concrete blocks is not a building capable of being prefabricated. For this very reason, we also think that the Counsel’s, argument that a floor or ground paved with concrete blocks, appurtenant to any building, should be treated as ‘”building” is not relevant. Notifications 36/94 and 5/97 required that the blocks be actually used as components of prefabricated buildings for the period prior to 1-3-1997 or be of a kind used in such buildings for the subsequent period. This requirement could be met only through positive evidence, which is missing in the instant case. Therefore, following the ratio of the decision rendered in the case of Excon (supra), we hold that the Concrete Blocks in question were not eligible for the benefit of concessional rate of duty in terms of Sl. No. 1(b) of the Notification No. 36/94-C.E. or in terms of Sl. No. 117 (2) of Notification No. 5/97-C.E.
7. We shall now turn to the plea of time-bar raised by ld. Counsel. It was argued that the entire demand raised in show-cause notice dated 11-10-1999 for the period 1994-1995 to 1998-1999 was barred by limitation as there was-no valid reason for invoking the extended period of five years prescribed under the proviso to Section 11A(1) of the Central Excise Act. Counsel submitted that the appellants had not suppressed any relevant fact before the department as alleged in the notice. In classification list filed on 28-11-1994, they had declared their product as “blocks/slabs, lintels, concrete beams and stairs constituting intermediates and components of prefabricated buildings falling under heading 94.06. The sizes of various solid concrete blocks were also furnished in the classification list and the benefit of Notification No. 36/94-C.E. was also specifically claimed therein. This classification list was verified and approved by the proper officer of the Department. Later on, for the post-Budget period, a fresh classification list was filed on 4-4-1997, wherein the appellants mentioned heading 6807.00 against the description of Concrete Blocks. The proper officer himself amended this entry as 6807.20 after necessary verification. Therefore, Counsel submitted, the relevant facts had been fully disclosed to the department. Counsel also referred to the letter dated 12-7-1996 issued to the appellants by the Central Excise Range Superintendent. In that letter, the Superintendent had acknowledged that the appellants were clearing the concrete blocks (solid) on payment of duty at the rate of 10% in terms of Notification No. 36/94-C.E. In that letter, the Superintendent further directed that the concrete hollow blocks (light weight) manufactured by AEON’S also should be cleared on payment of duty at the same rate. In their reply dated 19-7-1996 to the above letter of the Superintendent, the appellants pointed out that the hollow blocks were entitled for the benefit of nil rate of duty in terms of Sl. No. 1(a) of Notification No. 36/94-C.E. whereas the solid concrete blocks would be covered by Sl. No. 1(b) of the Notification which attracted 10% duty. Copies of the aforesaid classification lists and the correspondence between the assessee and the department are available on record and we have perused the same. We find that the above submissions of the Counsel are factually correct and have not been disputed. It is particularly noticed that, in their reply dated 19-7-1996, AEON’S had explicitly stated their standpoint in the following words :-
“We may further like to add that it is our Understanding that the said notification prescribed effective rate of 10% on slabs, lintels, blocks other than goods covered by item ‘a’ of the said notification without any requirement that they should constitute an intermediate and components of prefabricated building and only beams and stairs should constitute as intermediate components of pre-fabricated building to be entitled to the exempted rate.”
There is nothing on record to show as to how the Revenue reacted to the above argument of the assessee. Obviously, on the part of the Revenue, there was complete silence in the matter for over a period of three years between the above letter of the assessee and the show-cause notice in question. We have no doubt in our mind that the allegations of misdeclaration and suppression raised against the assessee in show-cause notice dated 11-10-1999 are unfounded inasmuch as the party had not only disclosed material facts to the department from time to time during the period 1994-1995 to 1998-1999 but they had also raised a reasoned claim for the benefit of Notification No. 36/94-C.E. As a matter of fact, the Superintendent’s letter dated 12-7-1996 to the assessee is indicative of the department’s knowledge of how AEON’S understood the scope of applicability of this Notification. In the facts and circumstances, it was not open to the department to invoke the larger period of limitation against the assessee to demand duty for the period 1994-95 to 1998-99. In similar circumstances, this Tribunal has held in the case of Subros Ltd. v. CCE, Noida [2003 (162) E.L.T. 626] that the larger period of limitation is not invocable. The assessee can also claim firm support from the Apex Court’s judgment in Padmini Products v. CCE [1989 (43) E.L.T. 195 (S.C.)] in this context. Therefore, the demand of duly affirmed against the assessee for the above period cannot be sustained. The demand raised in each of the show-cause notices issued by the Superintendent is admittedly within the normal period of limitation prescribed in the main part of Section 11A(1) and the same is liable to be honoured by the assessee.
8. The Commissioner has imposed a penalty of Rs. 83,18,399/- on the assessee under Section 11 AC of the Central Excise Act. This penalty, obviously, is incidental to the demand of duty for the period from 28-9-1996 (date on which Section 11AC came into force). We have already set aside the demand of duty up to 1998-1999 which was raised in show-cause notice dated 11-10-1999, under the proviso to Section 11A(1). The other two show-cause notices did not invoke the said proviso either. It is settled law that, where the proviso to Section 11A(1) is not invoked to demand duty. Section 11AC cannot be invoked to impose penalty. Hence the above penalty is liable to be set aside. There is another penalty of Rs. 20 lakhs on AEON’S under Rule 173Q which apparently is incidental to the entire demand of duty covered by all the show-cause notices. We have not found any evidence on record indicating that the appellants contravened any of the provisions of the Central Excise Rules, 1944 with intent to evade payment of duty. The non-payment of duty was on account of the fact that the assessee interpretated and understood the Notifications in the way they did in a bona fide manner without any mens rea. Hence no penalty is warranted under Rule 173Q either.
9. In the Revenue’s appeal, the appellant has challenged the abatement of duty allowed by the Commissioner, in the valuation of the goods, under Section 4(4)(d)(ii). We find that the Commissioner was granting a benefit which was due to the assessee in terms of the said provision of law read with the Tribunal’s Larger Bench decision in the case of Srichakra Tyres Ltd. [1999 (108) E.L.T. 361 (Tri. – Del.)]. We note that the Larger Bench decision has been affirmed by the Supreme Court in the case of Maruti Udyog Ltd. [2002 (141) E.L.T. 3 (S.C.)], the appellant-Revenue has no case.
10. In the result it is ordered as under :-
(i) The demand of duty raised on the assessee for the period 1994-1995 to 1998-1999 and the penalties imposed on them under Section 11AC and Rule 173Q are set aside;
(ii) The demand of duty on the assessee for the period from April, 1999 to September, 2000 is affirmed. It is, however, held that no interest is chargeable on this duty under Section 11AB of the Central Excise Act, 1944 as the demand of duty is not under the proviso to Section 11A(1).
The Commissioner’s order will stand modified to the above extent. Appeal No. E/485/2001 of AEON’S stands disposed of as above while appeal No. E/171 /2002, of the Revenue stands rejected.