JUDGMENT
Jyoti Balasundaram, Member (J)
1. For reasons recorded below we waive the predeposit of duty of Rs. 14,80,269.75 confirmed against the assessees and penalty of Rs. 1 lakh imposed upon them and stay the recovery thereof, and proceed to dispose of appeal itself with the consent of both sides as the issue stands settled by earlier decisions of the Tribunal.
2. The duty demand in the present case arises as a result of denial of benefit of concessional rate of duty in terms of Notification No. 258/87 which is available to man made fabrics containing Polyester below 70% (concessional rate of duty of Rs. 1.30 Sq. Mtrs.). The benefit has been denied on the ground that the polyester contents of the grey fabrics supplied by the grey fabrics manufactured and process by the assessee herein exceeded 70%. It is the contention of the appellants before us that the extended period of limitation is not available—–. In this case the show cause notice dt. 4.3.1993 covers the period from March 1989 to January 1990—–, since the appellants had no knowledge that the Polyester contents in the grey fabrics supplied to them was in excess of 70%. They submit that in such a situation they cannot be held guilty of any suppression of concealment with an intention to evade payment of duty and therefore contended that the entire demand is unsustainable as it is time barred.
3. The prayer for setting aside of the demand of duty and penalty is vehemently opposed by Ld.DR who reiterated the finding of the authorities below.
4. We have considered the rival submissions, We find that the show cause notice alleged suppression of the polyester contents of the grey fabrics; that the adjudicating authority held “it is presumed that assessee is also a party to the misdeclarations in respect of the composition of the fabrics”; that the lower appellate authority held that the fact that the appellants had filed a declarations, while operating under Notification No. 305/77 itself would show that they were guilty of suppression of facts. However we are unable to bring ourselves to agree, that here has been any suppression on the part of the appellants before us unless it is shown that the appellants were aware of the wrong description/declaration of the grey fabrics. Till then they cannot be held to have suppressed or concealed facts relating to the composition of the grey fabrics. In the case of Paras Prints Pvt. Ltd. v. Commissioner of Central Excise, Surat [2000 (120) ELT 662 (Tribunal)], the Tribunal has held that in the absence of any allegation in the notice or finding of the Commissioner that the appellant knew or deliberately failed to declare the correct cost of the grey fabrics and also, there being no legal requirement for the processors to verify the correctness of the declaration furnished by the owners, extended period is not applicable. In the present case the ratio of the above decision is directly (SIC) it has not been brought out as to how the appellants had any knowledge that the description of the grey fabrics supplied to them was incorrect. We therefore hold that the demand of duty and penalty is barred by limitation, and allow the appeal.
(Pronounced in Court)