ORDER
S.K. Bhatnagar, Vice President
1. This is a stay application filed with reference to the order-in-original passed by the Commissioner, Allahabad dated 25-1-1996.
2. Learned counsel stated that the appellants are a small scale unit registered at Lucknow. They had filed a classification list effective from 22-9-1989 claiming the benefits of the Notification No. 175/86 on the ground that they were a small scale unit duly registered with proper authorities.
3. The Assistant Collector, however, passed his order on this classification list only in 1991 and the same was communicated to the appellants vide letter dated 12-4-1991.
4. On receipt of this communication, they found that they had been denied the benefits of small scale industry Notification and the classification list had been amended approving it only for standard rate of duty.
5. This letter of the department did not indicate any reasons for disallowing the benefit claimed by them and amending the classification list as proposed by them i.e. for denying the exemption. Hence, they addressed a letter dated 27-4-1991 to the Assistant Collector requesting that they may be informed of the reasons for the above amendment in the classification list by issue of a proper adjudication order. However, no such order was received. Instead, they were served with a show cause notice dated 15-4-1994 asking them to pay the amount demanded in that notice on the ground that they had failed to produce registration certificate from the Directorate of Industries as required in terms of the Notification No. 175/86.
6. It was their submission that first and foremost they had submitted the required registration certificate to the Superintendent of Central Excise as evident from their letter dated 16-2-1988. The receipt of which was duly acknowledged by the concerned officer as evident from the photocopy enclosed in their paper book.
7. This certificate of the Directorate of Industries, Lucknow is dated 15-12-1979.
8. In the circumstances, they were eligible for the benefit claimed by them.
9. Subsequently, they had extended their activities on to the site and had started manufacturing various other items of machinery including the machinery for sugar mills and accordingly they had further addressed appropriate communication to the proper officer in the Directorate of Industries and obtained necessary approval.
10. It was, therefore, their contention that it was erroneous on the part of the Assistant Collector to have denied the benefit claimed by them.
11. It was also their contention that there has been violation of principles of Natural justice inasmuch as neither a show cause notice was issued nor a hearing was granted before amending the classification list and in this connection, he would like to draw attention to the order of the Tribunal in the case of Foods, Fats and Fertilizers Ltd. reported in 1987 (30) E.L.T. 538 (Tri.).
12. It may be noticed that the show cause notice had been issued more than 3 years of their submission of the classification list and clearance of the goods pending approval thereof. The notice was, therefore, time barred and the Department had no justification for invoking the extended period of limitation since they had furnished all the required information at the time of filing of the classification list, as brought out above.
13. In this connection, he would like to rely upon the order in the case of S.D. Kemexc Industires reported in 1995 (75) E.L.T. 377 (Tribunal) which shows that in this case the show cause notice was issued for one year even after receipt of information by the Department, hence extended period of limitation was not considered as applicable.
14. Learned DR stated that he would like to point out that the learned Collector has observed in his order that the required certificate from the Directorate of Industries had not been produced before him.
15. The letter addressed to the Superintendent on 16-2-1988 has apparently been failed much before the filing of the classification list and in the normal course, when they had claimed the benefit of Notification for SSI certificate they should have inclosed a copy thereof.
16. Further more, even this certificate is in respect of items other than those which are in question and, therefore, not relevant for our purpose.
17. It was also his submission that in case the appellants were aggrieved of the order of the Assistant Collector on the classification issue, it was open to them to have filed an appeal and not having done so they cannot at this stage make an issue thereof.
18. It was also his submission that even the subsequent certificate produced by them dated 27-9-1995 which relates to a period subsequent to the period in question.
19. We have considered the above submissions. We observe that there is lot of force in the argument of the learned Counsel that the appellants had duly filed classification list claiming benefit of the exemption Notification No. 175/86 as early as September 1989 and SSI registration certificate had been submitted to the Superintendent even before filing the classification list. Thus they had cleared the goods only after filing the classification list pending approval of the Assistant Collector. In the circumstances, prima facie, it appears that they had supplied the required information to the Department and, therefore, it was open to the Department to make such enquiries or conduct such verification as may be required for the purpose of approving the classification list and if necessary issue show cause notice or demand notice in the normal period of limitation. Hence, prima facie the appellants appear to have a better case on time bar. The question as to whether the certificates produced were sufficient for the purpose is agruable and could be considered more appropriately during the course of hearing of the main appeal, as such certificates are issued under IDR Act and those provisions have also to be gone into.
20. Looking to the totality of facts and circumstances and noting the above aspects in particular, we waive the pre-deposit of the amount in question and stay its recovery during the pendency of the appeal.