1995(01)LCX0081
IN THE CEGAT, SPECIAL BENCH `D’, NEW DELHI
S/Shri G.P. Agarwal, Member (J) and P.K. Kapoor, Member (T)
M.P. VEGETABLE FRUITS PRODUCTS
Versus
COLLECTOR OF CENTRAL EX., RAIPUR
Order No. 35/95-D, dated 23-1-1995 in Appeal No. E/598/93-D
Cases Quoted
Agro Foods Punjab Ltd. v. Collector — 1990 (049) ELT 404 [Paras 2, 5]
Padmini Products v. Collector — 1989(08)LCX0031 Eq 1989 (043) ELT 0195 (SC) [Para 7]
Advocated By : Shri N.L. Srivastava, Advocate, for the Appellant.
Shri M.K. Jain, SDR, for the Respondent.
[Order per : P.K. Kapoor, Member (T)]. - This is an appeal against the order dated 3-12-1992 passed by the Collector, Central Excise, Raipur. The appellants are engaged in the manufacture of Tomato Puree which is packed in jerry cans of 35 litre capacity for being supplied to manufacturers of Tomato Ketchup. The appellants filed a declaration in terms of Notification No. 11/88-C.E. (N.T.), dated 18-4-1988 with the intention of availing the benefit in terms of Notification No. 175/86-C.E., dated 1-3-1986. In the said declaration they described their product as `Tomato Puree’ classifiable under sub-heading 2104.90 of the Schedule to the Central Excise Tariff Act, 1985. On the basis of the enquiries made from the appellants in January 1989 when statements of some of their officers were recorded, they were served with a show cause notice dated 27-1-1992 alleging that they had misdeclared their product as classifiable under sub-heading 2104.90. On the grounds that the goods were correctly classifiable under sub-heading 2001.10, the appellants were asked to show cause as to why duty amounting to Rs. 62,311.50 for the period 5-1-1989 to 18-1-1989 should not be recovered from them under proviso to Section 11A of the Central Excises and Salt Act and why penalty should not be imposed on them. Thereafter by the impugned order, the Collector held “Tomato Puree” cleared by the appellants in containers was correctly classifiable under sub-heading 2001.10 attracting Central Excise duty @ 15% ad valorem and confirmed the demand of duty amounting to Rs. 62,311.50 by invoking the extended period under Section 11A and also imposed a penalty of Rs. 15,000/- under Rule 9(2) read with Rule 173Q of the Central Excise Rules, 1944.
2. Appearing on behalf of the appellants Shri N.L. Srivastava, learned Advocate submitted that the Collector had erred in holding that Tomato Puree supplied by them in 35 Litre jerry-cans to manufacturers of Tomato Ketchup was classifiable under sub-heading 2001.10. He stated that sub-heading 2001.10 covers fruit juice concentrate/pulp tomato paste if put up in unit containers. He contended that the goods having been cleared by the appellants in jerry-cans or drums of 35 Litre capacity, they could not be deemed to have been put up in unit containers. He therefore argued that the goods were correctly classifiable under sub-heading 2001.90. In support of his contention he placed reliance on the Tribunal’s order in the case of Agro Foods Punjab Ltd. v. Collector of Central Excise reported in 1990 (049) ELT 404. He submitted that the Collector’s order invoking the extended period for confirmation of the demand in terms of the proviso to Section 11A on the grounds that the appellants had suppressed relevant facts was not sustainable. He contended that the demand issued by the department for a period beyond six months was time barred since the appellants had given in their declaration dated 16-4-1988 the correct description of the goods. He added that in January 1989 when the departmental officers had questioned the officers of the appellants’ factory, they had furnished the details of the nature of the appellants’ product. He contended that under these circumstances, the Collector’s finding in regard to suppression of facts was erroneous.
3. On behalf of the Revenue, Shri M.K. Jain, learned SDR placed reliance in the findings in the impugned order. He contended that the containers of 35 Litre capacity in which the appellants were packing their product will have to be deemed as unit containers since the appellants were selling the goods packed in such containers to M/s. Kissan Products.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that the only points arising for consideration in this case are whether -
(1) Tomato Puree cleared by the appellants in containers of 35 Litre capacity could be deemed as classifiable under sub-heading 2001.10 as held in the impugned order or under sub-heading 2001.90 as claimed by the appellants;
(2) The demand confirmed by the impugned order by invoking the extended period in terms of proviso to Section 11A is sustainable.
5. Taking up the first point we find that in the case of Agro Foods Punjab Ltd. v. Collector of Central Excise (supra) the Tribunal has held that fruit juice concentrate/pulp/tomato paste cleared in barrels or drums would be classifiable under sub-heading 2001.90 and not under sub-heading 2001.10 since they would not be treatable as put up for sale in unit containers. Paras 8 and 9 of the said order being relevant are reproduced below :-
* * * * *
We follow the Tribunal’s order extracted above and hold that “Tomato Puree” cleared by the appellants in jerry cans of 35 Litre capacity could not be deemed as having been put up in unit containers and accordingly it was correctly classifiable under sub-heading 2001.90.
6. Next point to be examined is whether the Collector’s order confirming the demand by invoking the extended period in terms of the proviso to Section 11A on the grounds of suppression is sustainable. The appellants have contended that they in the declaration filed in terms of Notification No. 11/88, dated 16-4-1988 for the year 1987-88 had correctly described their product. They have also stated that complete details about the nature of their product and the mode of its packing were furnished to the Department in January 1989 when the Central Excise officers had visited their factory for carrying out investigations. They have contended that under these circumstances, the Collector’s order confirming the demand by invoking the extended period on the grounds of suppression of facts is not sustainable.
7. Since the appellants had described their product as `Tomato Puree’ in the declaration filed in terms of Notification No. 11/88, dated 16-4-1988 and they had also given all the details as regards the nature of the product and the mode of its packing when statements of their officers were recorded by the departmental officers in January, 1989, we are inclined to agree with the appellants that the charge of suppression of facts with the intent to evade duty, is not sustainable. The classification of their product `Tomato Puree’ indicated by the appellants in the declaration filed for the year 1987-88 was evidently on the basis of their belief that the goods were classifiable under 2104.90. In the case of Padmini Products v. Collector of Central Excise reported in 1989 (043) ELT 195 the Hon’ble Supreme Court has held that for invoking the extended period of five years’ limitation duty should not have been paid, short levied or short paid or erroneously refunded because of either fraud, collusion or wilful mis-statement or suppression of facts or contravention of the provisions of the Act or Rules made thereunder and the extended period of five years is not applicable if there is a mere failure or negligence on the part of the manufacturer to take out a licence or pay duty when there was scope for doubt that goods were dutiable. Having regard to the fact that the appellants had filed a declaration in respect of their product for the year 1987-88 and they had also furnished detailed information as regards their product during the investigations carried out by the departmental officers in the factory in January, 1989, on the ratio of the Supreme Court judgment quoted above we hold that the finding in the impugned order regarding suppression of facts is not sustainable and accordingly we hold that the demand issued on 27-1-1992 for the period 5-1-1989 to 18-1-1989 was time barred.
8. In view of the above discussion, the impugned order is set aside and the appeal is allowed.
Equivalent 1995 (76) ELT 393 (Tribunal)