2004 (97) ECC 652 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(B)

Shri S.S. Kang, Member (J) and Shri V.K. Agrawal, Member (T)

Indian Oil Corporation Ltd.

Versus

CCE, Mumbai-II

Appeal No. E-1682/92-NB(B)

[Arising out of Order-in-Original No. V-Adj (Ch. 27) 15-12/91-11565 dated 26.11.1991 passed by the Collector of Central Excise, Bombay-II]

Final Order No. 498/2004-B, dt. 15.6.2004, Certified on 6.7.2004

Demand (C. Excise)

Limitation -- Extended period of limitation not invocable -- The show cause notice has been issued on 20.3.91 for demanding the duty for the period from 19.1.86 to 19.3.90 and as such the entire period is beyond the normal period of 6 months specified in Section 11A(1) of the Central Excise Act -- In view of this fact which has not been rebutted by the Revenue it cannot be claimed that there has been misdeclaration by the Appellants with an intent to evade payment of duty or there was wilful suppression by them. There was no justifiable ground for the Tribunal for invoking the First Proviso to Sub-section (1) of Section 11A of the Act. The demand as being time barred without going into the merits of the case is set aside.

Appeal is allowed

PRESENT :

Shri M. Chandrashekharan, Sr. Adv. for the appellant.

Shri Vikas Kumar, SDR for the respondent.

Cases Cited :

1. Densons Pultretaknik v. CCE, 2003 (57) RLT 385 (SC).................................. [Para 2.1]

2. Television & Components v. CCE, Ahmedabad, 2003 (157) ELT 529 (Tri)........ [Para 2.1]

Per : V.K. Agrawal

In this appeal, filed by M/s. Indian Oil Corporation Ltd., the issues involved are whether the products manufactured by them are Speciality Oil or Lubricating Oil eligible for the benefit of Exemption Notification No. 120/84-CE, and whether the demand is hit by time limit specified in Section 11A(1) of the Central Excise Act.

2. Shri M. Chandrashekharan, learned Sr. Advocate, submitted that a show cause notice dated 20.3.91 was issued to them for demanding Central Excise duty for the period from 19.1.1986 to 19.3.1990 on the ground that they were clearing Speciality oil as lubricating oil claiming exemption under Notification No. 120/84-CE dated 11.5.84; that the Commissioner under the impugned Order has confirmed the demand of duty and imposed penalty besides confiscating Land, Building, Plant, and Machinery, etc. with an option to redeem the same on payment of fine on the ground that classification and the rate of duty applicable to the impugned product had already been decided by the jurisdictional Asst. Collector which had been upheld by the Collector (Appeals). The learned Sr. Advocate, further, submitted that all the classification lists have been filed between the period 19.1.1986 and 19.3.1990 wherein the benefit of Notification No. 120/84 was claimed by them; that all these classification lists have been duly approved by the Department finally; that the Order passed by the Asst. Collector on 18.1.91 relates to classification list No. 1/90-91 effective from 20.3.90; that in the said Order dated 18.1.91 the Asst. Collector dealt with the classification list comprising of 423 items and their eligibility to the benefit of the Notification No. 120/84; that on appeal preferred by the Appellants the Collector (Appeals) under Order-in-Appeal No. SDK-5/D-II/91 dated 22.2.91 had remanded the matter to the Asst. Collector for de novo proceedings as the opportunity to explain was not granted to the Appellants; that thus observation of the Collector in the impugned Order that the Order of the Asst. Collector has been upheld by the Collector (Appeals) is not factually correct; that after remand by the Collector (Appeals), the Asst. Collector issued a fresh show cause notice dated 26.2.91 in respect of only 110 products and not in respect of 423 items; that the Asst. Collector under Order-in-Original dated 21.3.91 sixteen products were deleted from the classification list with the direction that Indian Oil Corporation Ltd. would file fresh classification list as and when those products were manufactured and cleared by them. In respect of 59 items the benefit of the Notification was denied to them and in respect of remaining items covered by the show cause notice dated 26.2.91 (i.e. 35 items) the benefit of the Notification No. 120/84 was allowed; that no appeal had been filed by the Revenue against the said Order-in-Original dated 21.3.91; that however, on appeal filed by the Assessee the Collector (Appeals) vide Order-in-Appeal No. SDK/487/B-II/91 dated 25.11.91 again remanded the matter to the Asst. Collector to decide the classification of 59 items after obtaining a test report from the Dy. Chemist, Central Control Laboratories, or any other competent test house.

2.1 Learned Sr. Counsel contended that the duty has been demanded in respect of such items under the impugned Order though the benefit of the Notification had been extended to the Appellants by the Asst. Collector under Order dated 21.3.91 against which no appeal was filed by the Revenue; that thus the impugned Order is not sustainable. Finally Sr. learned Advocate submitted that as the Appellants have been filing the classification list as required under Rule 173B of the Central Excise Rules, 1944 from time to time and which have all been finally approved, the extended period of limitation for demanding the duty is not invocable inasmuch as there was no suppression on their part as in all the classification lists names of all the items were indicated and benefit of Notification No. 120/84 was specifically claimed. He, further, contended that the show cause notice dated 20.3.91 itself as well as the description of the facts in the Annexure thereof do not show any suppression or mis-statement with intent to evade payment of duty; that as there has been no allegation about intent, on the part of the Appellants, to evade payment of duty or that suppression of mis-statement was wilful, Proviso to Section 11A(1) is not attracted and duty cannot be confirmed for the extended period. Reliance has been placed on the decision in the case of Densons Pultretaknik v. CCE, 2003 (57) RLT 385 (SC) wherein it has been held that for invoking extended period of limitation under the said provision duty should not have been paid, short levied or short paid by suppression of fact or any contravention of any provision or Rules but there should be wilful suppression.........by merely claiming it under Heading 3926.90 it cannot be said that there was any wilful mis-statement or suppression of facts. Hence, there was no justifiable ground for the Tribunal for invoking the First Proviso to Sub-section (1) of Section 11A of the Act." Reliance has also been placed on the decision in the case of Television & Components v. CCE, Ahmedabad, 2003 (157) ELT 529 (Tri).

3. Countering the arguments Shri Vikas Kumar, learned SDR, submitted that the Appellants themselves have published a reference booklet namely "Product Line" on the wide range of lubricants, fuels, special products, and bitumen manufactured by them; that the products in question had been described in this booklet as speciality oil by the Appellants themselves; that thus they had intentionally misdeclared their product in the classification list filed by them and they claimed the benefit of Notification No. 120/84 with an intent to avoid payment of duty; that therefore, the extended period of limitation is clearly invocable in the present matter.

4. We have considered the submissions of both the sides. It has not been disputed by the Revenue that the Appellants have filed classification lists from time to time. In fact it is mentioned in the impugned Order itself (Para 2 of the Order-in-Original); that "on the basis of intelligence received that M/s. Indian Oil Corporation Ltd. were clearing dutiable speciality oil as lubricating oil an in-depth scrutiny of their product and the classification list filed by them were undertaken." It is thus apparent that the Appellants duly filed classification list. The learned Sr. Advocate for the Appellants had also drawn our attention to the classification list filed by them effective from 28.2.86 wherein they have classified their products mainly under Sub-heading 2710.99 of the Schedule to the Central Excise Tariff Act had claimed the benefit of Notification No. 120/84-CE dated 11.5.84 as amended. This classification list was verified by the Range Suptd. and was found to be in order. Thereafter, the classification list was approved by the Asst. Collector of Central Excise on 19.7.86. In view of this fact which has not been rebutted by the Revenue it cannot be claimed that there has been misdeclaration by the Appellants with an intent to evade payment of duty or there was wilful suppression by them. The Supreme Court in the case of Denson Pultretaknik (supra) has held that extended time limit for demand of duty is not invokable for merely claiming classification under different Tariff Heading as it does not amount to wilful mis-statement or suppression of fact. The Tribunal has also held in the case of Television & Components that having approved the classification lists it would not be proper for the Department to turn around and put the blame on the Assessee for mentioning the goods incorrectly. Accordingly the extended period of limitation is not invocable in the present matter. The show cause notice has been issued on 20.3.91 for demanding the duty for the period from 19.1.86 to 19.3.90 and as such the entire period is beyond the normal period of 6 months specified in Section 11A(1) of the Central Excise Act. We, therefore, set aside the demand as being time barred without going into the merits of the case. Therefore, the appeal is allowed.