1. This appeal filed by M/s Election (Madras) Ltd. is against the order of the Collector dated 21.9.90 passed in adjudication of show-cause notice dated 5.6.89.
2. The department, by the aforesaid show-cause notice, demanded differential duty of excise amounting to Rs.11,14,963.63 for the period from 14.3.86 to 2.3.87 by invoking the extended period of limitation under the proviso to Sub-Section (1) of Section 11-A of the Central Excises and Salt Act, 1944. The show-cause notice, for the purpose of such demand, alleged that the appellants had manufactured and cleared parts of material handling equipments at the lower rate of duty applicable to the complete equipments under Tariff Sub-Heading No. 8428.00 of the Central Excise Tariff Schedule, instead of at the higher rate of duty applicable to parts of material handling equipments under TSH No. 8431.00. The show-cause notice, for the purpose of invoking the extended period of limitation, alleged that the appellants had mis-classified the goods and also suppressed from the department the purchase orders/contracts placed on them by their customers, with the intention of evading payment of duty on the goods at the correct rate. The appellants contested the allegations. The jurisdictional Collector of Central Excise, in adjudication of the dispute, passed the impugned order holding classification of the goods under TSH 8431.00 of the Central Excise Tariff Schedule and confirming the demand of duty against the assessee, after rejecting the latter’s claim for classification of the goods under TSH 8428.00 as also their plea that the entire demand of duty was barred by limitation.
3. We have examined the records of the case and have heard both sides.
4. Ld. Advocate, Sh. G. Shiv Das for the appellants, reiterated the assessee’s case as stated in their reply to the show-cause notice as well as in the memorandum of appeal. Counsel did not press the assessees case on classification of the impugned goods. His arguments were entirely on the point of limitation. Ld. Counsel submitted that no part of limitation. Ld. Counsel submitted that no part of the demand of duty for the period 14.3.86 to 2.3.87 raised in the show-cause notice issued on 5.6.89 was within the normal period of six months prescribed under Section 11-A of the Act and that the extended period of limitation provided under the proviso to Section 11-A (1) of the Act was not invocable in the case of the appellants. Counsel submitted that both material handling equipments and parts thereof were classified under Tariff Item No. 68 of the erstwhile Central Excise Tariff, which was in force upto 28.2.86. Immediately after the new Central Excise Tariff came into effect on 1.3.86, the appellants filed classification list with the department claiming classification of material handling equipments viz. Wagon Tipper, Reclaimer and Conveyor under TSH 8428.00. In that classification list, the appellants had endorsed “LIST ENCLOSED” at the bottom of the description of the goods. The list so enclosed set out the manufacturing process chart for tipper and reclaimer. That chart, in turn, indicated the various parts manufactured by the appellants and the process undertaken by them so as to make them complete tippers. Thus, Counsel added, the department was duly informed that the appellants were manufacturing various parts which were used for fabrication of wagon tipper and reclaimer at the customer’ site. It was after duly noting all those aspects that the Assistant Collector approved the classification list. Ld. Advocate further submitted that, even as early as at the time of filing classification list on 15.7.85 under the erstwhile Central Excise Tariff, the appellants had enclosed an account of the manufacturing process undertaken by them. That chart clearly indicated the various parts manufactured by them for making the wagon tippers and reclaimers. In the light of these facts, ld. Advocate submitted that there was no suppression of facts by the assessee as alleged in the show-cause notice. Counsel further submitted that the appellants filed monthly RT-12 returns and the same were duly assessed by the department. Such returns were accompanied by the gate passes under which the goods were cleared. The gate passes clearly indicated that the appellants were clearing only the parts of wagon tipper which would ultimately make a wagon tipper at the customers’ site. The RT-12 returns filed by the appellants having been duly assessed by the department, there was no room for any allegation that the department was not knowing about the clearance of the parts of wagon tipper. Ld. Advocate further submitted that, whenever any contract was awarded to the appellants, they duly filed the same along with price list, with the department. The price list indicated the various parts manufactured by the appellants. Therefore, Counsel denied the allegation that any such contract was not placed before the department. Ld. Advocate contended that there was neither any suppression of facts nor any mis-classification of goods with intent to evade payment of duty, on the part of the assessee. He, therefore, pleaded for holding that the extended period of limitation was not invokable in the asseessee’s case and the entire demand of duty was time-barred.
5. Ld. Advocate further argued that, since the appellants have given correct description of the goods in the classification list, the allegation of suppression in the show-cause notice was not sustainable. In support of this argument, Counsel relied on the Tribunal’s decision in the case of Collector Vs. Kinjal Electricals (P) Ltd. [1990 (45) ELT 109]. Counsel pointed out that the appeal filed by the department against the said decision of the Tribunal was dismissed by the Supreme Court as per order dated 25.3.96 in CA No. 4435/88 [1996 (83) ELT A-102]. In support of his arguments on limitation, ld. Counsel also cited the Supreme Court’s decision in the case of National Radio & Electronics Co. Ltd. Vs. CCE AurangabadM [2000 (88) ECR 757 (SC)] as also the decision of the Tribunal Larger Bench in the case of Mutual Industries Ltd. Vs. CCE, Mumbai [2000 (37) RLT 703 (CEGAT-L.B.).
6. Ld. SDR, Sh. K.K. Goel opposed the above arguments. He submitted that the word “parts” had not been mentioned in the relevant classification list filed by the assessee, though it had been mentioned in the classification list filed for the period prior to March, 1986. According to DR, this shows that the assessee deliberately did not declare parts and they declared complete equipments after March 1986. Ld. DR also reiterated the observations and findings contained in the impugned order, and prayed for confirming the demand of duty.
7. We have carefully examined the submissions. We find that, after the new Central Excise Tariff came into force, the appellants filed classification list claiming classification of material handling equipments, namely, tipper, reclaimer and conveyor under TSH 8428.00. That classification list was accompanied by ” PROCEDURE CHART FOR TIPPERS AND RECLAIMERS” which furnished a list of various components for tippers and reclaimers. Copies of these documents are available on record before us. The classification list was duly approved by the Assistant Collector, which fact is not disputed before us. It appears from the description of the goods given in the classification list read with the above procedure chart enclosed with the classification list that the assessee had given correct description of the goods to the department. Further, it is not disputed that the appellants filed monthly RT-12 returns and that the gate passes filed along with the returns indicated that the appellants were clearing only parts of the equipments. We have also confirmed this position by a perusal of the copies of some of the gate passes available on record. That the RT-12 returns were duly assessed by the department is also not disputed. Further, the assessee had also furnished to the department a complete set of contract in respect of the equipments for which Price List in Part-II had already been filed. This was done under cover of letter dated 14.3.86 addressed to the Supdt. of Central Excise, a copy of which is available on record. The fact that a copy of the contract was so furnished to the department by the assessee has also not been disputed before us. In view of this factual position, we hold that the assessee did not suppress any material fact from the department. The Larger Bench in the case of Mutual Industries (supra) held that the extended period of limitation was not invo able where the assessee had filed, with the department, sale contract along with price list. The decision of the Hon’ble Supreme Court in the case of National Radio and Electronics Co. Ltd. (supra) was to the effect that there was no suppression in a case where the contract for sale of goods was disclosed by the assessee to the department and that, in such a case, the extended period of limitation was not invo able. We have already found that the assessee had rendered correct description of the goods to the department, although they claimed classification of the goods under a sub-Heading different from the Sub-Heading under which the department sought to classify the goods. In the case of Collector Vs. Kinjal Electricals (supra), this Tribunal held that, in a case where the assessee rendered correct description of goods in the classification list, any show-cause notice issued beyond the normal period of six months would be barred by limitation as there was no suppression of facts in such a case. The said decision of the Tribunal has been approved by the Hon’ble Supreme Court vide 1996 (83) ELT A-102.
8. We have further noted that ld. Collector has not recorded any categorical finding that the assessee had suppressed facts deliberately. The Collector’s decision rejecting the assessee’s plea of limitation appears to be based on a finding that the assessee had deliberate intention to evade payment of Central Excise duty. We have found no evidence on record to show any such deliberate intention to evade payment of duty, in this case.
9. In view of our findings already recorded, we hold that the larger period of limitation under the proviso to Sub Section (1) of Section 11-A of the Act was not invocable against the assessee and, therefore, the entire demand of duty is barred by limitation. The appeal is allowed on this ground only.