ORDER
G.R. Sharma, Member (T)
1. The appellant in this case has contested the findings of the ld. Commissioner in the impugned order. The ld. Commissioner had confirmed demand of duty amounting to Rs. 22,77,900/ stating that the noticee had admitted that there has been a de mand of duty as indicated in the show cause notice during the period Au gust, 1994 to October, 1995. The ld. Commissioner also held that extended period of limitation has rightly been invoked in the SCN.
2. The facts of the case are that the appellant’s firm is 100% Export Oriented Unit (EOU) exporting various types of yarn. A part of the yarn was being cleared in the domestic tariff area on payment of appropriate duty. Two disputes arose first dispute was regarding classification of the product ANTHRA falling under tariff classification under Chapter Heading 52.06 as held by the Department and 52.05 as claimed by the assessee. The second dispute was about payment of duty called as Countervailing Duty (CVD). The Department alleged that the product was classifiable under Chapter Heading 52.06 and that CVD was payable on the yarn cleared by the appel lant. In reply to the SCN, the appellant did not contest classification of the product under Chapter Heading 52.06 but contested the demand of CVD stating that in terms of Section 3 of the Central Excise Act, 1944 only basic Customs Duty leviable under Section 12 of the Customs Act was payable. They therefore submitted that since only duty chargeable under Section 12 of the Customs Act was payable. Therefore, the demand of duty amounting to Rs. 22,77,900/ was not legal and justifiable. The ld. Commissioner after hear ing the submissions of the appellant held as indicated above.
3. Shri Balbir Singh, ld. Counsel appearing for the appellants sub mits that insofar as classification of the product is concerned, there is no dis pute that the product is classifiable under Chapter Heading 52.06, but the demand arising out of this classification is being contested. The ld. Counsel submits that the demand has been raised beyond a period of six months. He submits that in this case, the classification list of the appellant for the material period was approved and therefore in terms of the judgment of the Hon’ble Supreme Court in the case of C.C.E. Baroda v. Cotspim Ltd. [1999 (113) E.L.T. 353], the demand can be only prospective i.e., from the date of issue of SCN. He therefore submitted that the demand on this account is not sustainable in law in view of the above.
4. Insofar as the demand of Rs. 22,77,900/ is concerned, ld. Counsel submits that duty equivalent to the duty payable under Section 12 of the Customs Act should have been demanded. He submits that this demand is not the demand for duty under Section 12 but is the demand under Section 3 of the Customs Tariff Act. He submits that in terms of the provisions of Sec tion 3 of the Central Excise Act, 1944, only duty payable under Section 12 is payable for clearances in the domestic tariff area. He, therefore, submits that this demand is also not sustainable under the Act and therefore prays that the order of classification can be confirmed but the demand may be set aside and the Appeal allowed.
5. Shri Mewa Singh, ld. SDR submits that the Collector has relied on the concession granted by the party by admitting that the payment of Rs. 22,77,900/ has escaped payment. He submits that since this concession was given by the appellants, therefore, the issue should not be contested as being aggrieved by the order. He submits that insofar as classification of the prod uct is concerned, the position taken by the Department has been accepted by the appellant and therefore, the differential duty has rightly been demanded as held by the ld. Commissioner. He reiterates the findings of the ld. Com missioner.
6. We have heard the rival submissions. Insofar as demand of dif ferential duty on account of reclassification is concerned, we note that the demand is not sustainable in view of the judgment of the Apex Court in the case of Cotspun Ltd. reported in 1999 (113) E.L.T. 353.
7. Insofar as the demand of Rs. 22,77,900/ is concerned, we note that the finding of the Commissioner that the noticees have admitted that there has been escapement of duty of Rs. 22,77,900/ is not based on evidence in asmuch as the issue is contested in reply to show cause notice. We agree with the contention of the ld. Counsel for the appellant that this demand is of CVD payable under Customs Tariff Act. We note that provisions of Section 3 of the Central Excise Act, 1944 lays down that only duty, equivalent to the Customs duty payable under Section 12 of the Customs Act is payable on clearance of goods by 100% EOU to domestic tariff area. In this view of the matter this demand is also not sustainable.
8. In view of the above findings the Appeal is allowed. Consequen tial relief, if any, shall be admissible to the appellants in accordance with law.