of Central Excise, Mumbai Vs. Lajya Dyeing & Bleaching Works  Insc
206 (19 February 2008)
Bhan & J.M.Panchal
O R D
E R CIVIL APPEAL NO.2516 OF 2002
hereinafter referred to as the 'assessee', was a job worker and was engaged in
the processing of fabrics falling under Chapter heading 54 & 55 of the
First Schedule to the Central Excise Tariff Act, 1985 (for short 'the tariff
Act'). Assessee had accepted the declaration filed by the merchant
manufacturers who was supplying fabrics to the assessee and gave an undertaking
that it would comply with all the requirements and discharge all the
liabilities under the Central Excise Act, 1944 (for short 'the Act').
notification No.254/87 as amended by Notification No.57/89 dated 1.3.1989,
benefit of concessional rate of duty is available to a man made fabrics
containing polyster below seventy percent. Assessee filed classification lists
declaring the man made fabrics containing polyster below 70%. The said
classification lists were approved by the Assistant C.A.No.2516/02 ....
(contd.) - 2 - Collector, Central Excise believing that the statement of the assessee
given in the classification lists was true and correct.
were collected from the assessee-company and they were got chemically tested
which indicated that they were having polyster above 70% and thus would attract
higher rate of duty and the assessee company had mis- declared the contents of
the fabrics at the time of filing the classification lists with deliberate
intention to evade payment of excise duty.
a show cause notice dated 4.3.1993 invoking the extended period of limitation
under Section 11A was issued to the assessee for the period 04.03.1989 to
16.01.1990 demanding differential duty of Rs.14,80,269.25 and also asking them
as to why a penalty should not be imposed under the Central Excise Rules, 1944.
had replied to the show cause notice vide its letter dated 7.9.1993 stating
that the declarations given by merchants were relied upon and submitted to the
department as prescribed by Notification No.305/77 and that the charge of mis-declaration
was not tenable and therefore the demand was time barred.
adjudicating authority held that "it is presumed that assessee is also a
party to the mis- C.A.No.2516/02 .... (contd.) - 3 - declaration in respect of
the composition of the fabrics" and confirmed the demand of Rs.14,80,269.75
on the assessee and imposed a penalty of Rs.1 lakh on the assessee. He also
imposed a penalty of Rs.5,000/- each on the merchant manufacturers. Appeal
filed by the assessee before the Commissioner(Appeal) was rejected.
further appeal to the Tribunal, the Tribunal, relying upon an earlier decision
of the Tribunal in the case of Paras Prints Pvt. Ltd. vs. Commissioner of
Central Excise, Surat reported in 2000 (120) ELT 662 (Tribunal), 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 of limitation is not applicable.
finding recorded by the Tribunal is a finding of fact which does not call for
Appeal is dismissed. No costs.