V.K. Agrawal, Member (T)
1. The Revenue has preferred this appeal against the Adjudication Order No. 65/91 passed by the Collector, Central Excise, Bombay-II, dropping the demand of Central Excise duty against M/s. Standard Laminates (Paper) (P) Ltd.
2. When the matter was called no one was present on behalf of the Respondents. In fact, notice of hearing sent to them by registered post has been received back from the postal authorities with the remark “Left”. Registry also informs that even earlier notices sent to the Respondents by registered post have been received back. In view of this we heard Shri M.P. Singh, learned D.R. and perused the records for disposal of the appeal.
3. Shri M.P. Singh, learned D.R., mentioned that the Respondents manufacture Decorative Laminated sheets, Industrial Laminated sheets, One side/Both side Copper clad Industrial Laminated sheets and flexible laminates. On the basis of intelligence to the effect that the Respondents were indulged in evasion of Central Excise duty by removing the excisable goods clandestinely and undervaluing the same, their factory premises and registered office premises along with premises of their dealers were searched on 6-1-1988 and after carrying out the investigation a show cause notice dated 1-3-90 was issued to them for demanding central excise duty amounting to Rs. 62,25,187.50 paise and for imposing penalty on the Respondents as well as certain individuals; that the Collector Central Excise under the impugned Order dropped the demand of central excise duty, holding that the duty was demanded at the rate of 35% ad valorem applicable to the goods falling under Sub-heading 3920.31 of the Schedule to the Central Excise Tariff Act whereas the impugned product Laminated Decorative sheets was classifiable under Sub-heading 4818.90 (under Sub-heading 4823.90 from 1-3-88) and as such it would be against the law to confirm the duty under Chapter 48 when the show cause notice proposed recovery under Chapter 39. The learned D.R. further mentioned that though the Collector dropped the demand he gave his specific finding that the malafides of the respondents had been proved as they had not been able to refute any of the allegation set out in the show cause notice; that they had clandestinely manufactured and cleared excisable goods, deliberately, did not account for raw materials, opened bank accounts under fictitious name with ulterior motive to evade payment of duty. He, therefore, imposed penalty on Respondents as well as on Shri Indu Kumar N. Doshi, Shri Bharat Kumar K. Sutaria, and Shri Himanshu Indu Kumar Doshi.
3. Learned D.R. mentioned that the Respondents have classified the impugned product under Chapter 39 in the classification list filed by them and the classification of the product was not the subject matter of the show cause notice issued in the present matter. The show cause notice was issued only for demanding the duty on the goods clandestinely removed and differential duty payable on account of undervaluation of the product; that in view of this fact it was not open to the Collector not to confirm the duty against the Respondents when he had come to the conclusion that the charge levelled against them were proved. He finally submitted that in any case the Supreme Court in the case of CCE, Hyderabad v. Bakelite Hylam Ltd., 1997 (91) E.L.T. 13 (S.C.) has held that Decorative laminate sheets are classifiable under Chapter 39, Sub-heading 3920.31/3920.37. The learned D.R. submitted that in view of this decision of the Supreme Court the demand under Chapter 39 of the Tariff is justified and in view of the findings of the Collector that the charges levelled against them have been proved the Respondents are liable to pay central excise duty.
4. We have considered the submissions of the ld. D.R. and perused the records. As emphasised by the learned D.R. the Collector in the impugned Order has specifically mentioned that the allegations levelled against the Respondents have been proved as they were not able to refute the same. No cross objection has been filed by the Respondents nor they have appeared for hearing in the matter at any time. Accordingly the finding of the Collector that the charges levelled against them have been proved remains unrebutted and as such it has to be upheld. The Collector had not confirmed the demand of duty as according to him the demand of duty was made considering the impugned goods falling under Chapter 39 whereas the goods were held to be classifiable under Chapter 48 of the Central Excise Tariff. The dispute regarding the classification of the impugned product has been set at rest by the Supreme Court in the case of Bakelite Hylam, supra, according to which the impugned product is classifiable under Chapter 39 of the Central Excise Tariff only. In view of these facts and circumstances the demand of central excise duty demanded under show cause notice becomes payable by the Respondents. Accordingly we uphold the demand of Central Excise duty amounting to Rs. 62,25,187-50 and allow the appeal filed by the Revenue.