ORDER
Gowri Shankar, Member (T)
1. The appellant was engaged in the manufacture inter alia of mild steel pipes. From 1980-81 onwards, it appears, the appellant availed of benefit of notification exempting the small scale manufacturers from payment of duty on the goods to the extent of the value specified for this in such notification, such as Notification 105/80. It is contended that these declarations had been filed in time for the periods 1980-81 to 1990-91, although this is a matter of doubt as will presently be seen. It is further contended that no dispute was raised by the department subsequent to filing these declarations. The department however issued notice dated 9-7-1991 alleging that appellant did not pay duty on the mild steel pipes manufactured and cleared without payment of duty from 20-5-1988 to 10-5-1991. The notice also proposed confiscation of a consignment seized from the appellant’s premises.
2. The assessee took the stand, in reply to the notice, that it had filed declarations claiming the notification granting exemption from payment of duty to the extent of the value of the goods being cleared. It is contended that it was not aware that, subsequent to 1987-88 the exemption available for mild steel pipes under Notification 208/83 had been withdrawn and continue to file such declarations. It was pointed that the correctness of the declarations was never questioned by the department and that therefore the notice was barred by limitation. As an alternative, it was also contended that in the event of demand of duty was confirmed, Modvat credit of the duty paid on the inputs should be allowed to be set off against the duty demanded.
3. The Collector did not accept these contentions. He said that Notification 208/83 was not mentioned in any of the declarations. He also noticed that the manufacturing process had not been declared. Therefore, the demand was not barred by limitation and duty was payable. He declined to extend the benefit of Modvat on the ground that the documents relating to the purchase of inputs which were produced did not show that the inputs were utilised in the manufacture of final product. He ordered confiscation of the seized goods and imposed a penalty. Hence this appeal.
4. It is contended before me that the appellant had wrongly cited the Tariff Item 68 in the declaration filed even after 1988 by which the date the Tariff Item 68 ceased to exist, since the tariff itself had been replaced. It is contended that the department at no stage raised any objection. The appellant therefore was genuinely under the impression that no duty was payable had no intention to evade payment of duty and hence the demand is barred by limitation. The Supreme Court’s judgement in Tamil Nadu Housing Board v. C.C.E. -1994 (74) E.L.T. 9 (S.C.).is cited in support.
5. The departmental representative adopts the reasonings in the impugned order.
6. It is first of all not very clear as to whether all the declarations stated to have been filed for 1980-81, 1981-82, 1982-83, 1983-84, 1987-88, 1988-89, 1989-90 and 1990-91 had actually been filed and if so whether they were filed within the appropriate time.
7. In addition to seeing the photocopies produced in the appeal, I have seen the original produced at the time of hearing all the declarations. Declaration dated 20-9-1988 is seen to have been filed on 23/9 (apparently 1980). Two other declarations are produced, which do not bear any date. There is some reference to the financial year one of which is dated 14-4 year not being known. There is no declaration filed for 1986-87 and 1987-88. The explanation that they were not filed because production was not significant does not answer the point; however insignificant the production, the declaration was required to be filed. Although duty had not been demanded for this period, it has significance. This is the period when the earlier tariff, and with it Tariff Item 68 ceased to exist. The notice does not proceed on the footing that the declarations were filed in all the years. It is entirely unclear from the Collector’s order whether he accepts that the declarations for these were filed and if so received within time. If the appellant had been filing the declarations that it manufactured of mild steel pipes, these declarations were received by the department and the department was aware from the declarations that it manufactured these goods and did not intend to pay duty, the appellant’s contention that the demand was barred by limitation would succeed. If, however, the department was not at all aware of the manufacture of these goods or would not reasonably know from the declarations if any filed that the appellant had not paid duty on them, it is not possible to say straightaway that the departmental officers had material before them to conclude that the appellant manufactured these goods but did not pay duty on them. There could then be a basis for invoking the extended period unless of course the appellant is able to establish that it entertained the belief that the goods were not liable to duty. These issues are not all discussed in the order of the Collector and I am of the view that they should be properly examined. On this being pointed out to the advocate for the appellant, he says that he will be able to satisfy the Commissioner on these points but seeks access to the department’s records at the range to establish that the declarations were received. While I accept this request, I made it clear that the burden to prove that they were which would otherwise be on the appellant, should not be shifted on to the department. The relevant records ought to be made available to the appellant and reasonable opportunity given to it to make copies. Thereafter, three months may be given to the appellant to make the submissions and thereafter the Commissioner shall pass orders in the matter in accordance with law.
8. Appeal accordingly allowed. Impugned order set aside.