Star Paper Mills vs Collector of Central Excise, Meerut>1998(07)LCX0225

1998(07)LCX0225

IN THE CEGAT, COURT NO. III, NEW DELHI

Ms. Jyoti Balasundaram, Member (J) and Shri V.K. Agrawal, Member (T)

STAR PAPER MILLS

Versus

COLLECTOR OF CENTRAL EXCISE, MEERUT

Final Order No. 486/98-C, dated 7-7-1998 in Appeal No. E/3236/93-C

Advocated By : Shri V. Sridharan, Advocate, for the Appellant.

Shri A.K. Madan, SDR, for the Respondent.

[Order per : Jyoti Balasundaram, Member (J)]. - The above appeal arises out of the order of the Collector of Central Excise, Meerut confirming a duty demand of Rs. 11,34,104.39 p. on printing and writing paper manufactured and cleared by the appellants during the period from 18-10-1987 to 12-3-1988 on the ground that such paper fell for classification under CET sub-heading 4802.99 and not under sub-heading 4802.10 which covers printing and writing paper containing not less than 75% by weight of pulp from bagasse and attracting nil rate of duty during the relevant period. The duty has been confirmed on a quantity of 389.425 MTs of paper for which bagasse pulp content has been determined as being below 75%. The contention of the appellants that the ash content is to be deducted to determine the bagasse pulp content percentage and if such deduction is made, the percentage of bagasse pulp content will be 75% or more, has been rejected by the Adjudicating authority for the reason that ash content in paper remains throughout the stage of manufacture i.e. right from the stage of production of pulp itself. The Collector has referred to the Board’s Circular No. 13/11/87-CX, dated 18-12-1987 and Notification No. 190/80-CX, dated 8-12-1980 and has concluded that, since the Circular and the Notification only provide for deduction of percentage of additives like fillers etc. ash content in the pulp cannot be deducted.

2. We have heard Shri V. Sridharan, learned Counsel who principally contends that ash is nothing but a filler and therefore, ash content in the pulp should be deducted in order to arrive at the percentage of bagasse pulp content in the paper manufactured by them and that the demand is barred by limitation since there was no misdeclaration or suppression on the part of the appellants who had all along intimated the department regarding the commencement and dis-continuance of manufacture of the paper in dispute, filed monthly returns regarding more consumption of bagasse pulp, filed classification lists from time to time during the relevant period and maintained registers which registers were found to be incorrectly maintained. He further submits that the Collector has only given a finding that the quantity of 389.439 MT of paper has resulted in “escapement of duty due to wrong method of calculation adopted for determination of bagasse pulp content in the paper for availing nil rate of duty.” There is no finding that the appellants were guilty of any deliberate mis-statement or suppression with intend to evade payment of duty, thereby making applicable the extended period of limitation under the proviso to Section 11A of the Central Excise Act, 1944 and further that the Collector has not imposed any penalty upon the appellants.

3. The learned SDR Shri A.K. Madan reiterates the findings in the impugned order, emphasising that the Board’s Circular and Notification referred to herein above are not relevant for the purpose of present demand, which is based entirely upon the classification of the paper under sub-heading 4802.99, rejecting the classification claimed by the appellants under sub-heading 4802.10 due to the fact that the writing and printing paper was found to contain less than 75% by weight of pulp made from bagasse.

4. We have carefully considered the rival submissions. The records disclose that the appellants were regularly filing copies of monthly consumption of bagasse pulp, maintaining registers prescribed by the Board which have not been found to be incorrect in any particulars, filing classification lists which have been approved from time to time by the proper officer, extending the benefit of nil rate of duty under CET sub-heading 4820.10. The Central Excise officers were also maintaining registers as prescribed by the Board. In this register, there is no requirement for showing ash content in the paper. Therefore, the appellants cannot be said to have concealed or suppressed the percentage of ash content which they were required to disclose for the purpose of deciding classification of their printing and writing paper. Our view is buttressed by the fact that although the appellants had raised the plea of limitation before the Collector, he has not given any finding thereon and has not upheld the charge of suppression/mis-statement with intent to evade payment of duty but only held that the quantity of paper on which the demand has been confir- med by him, has resulted in “escapement of duty due to wrong method of cal- culation adopted for determining pulp content in the paper for availing nil rate of duty.” He has also not imposed any personal penalty upon the appellants.

In the light of the above discussion, we uphold that the demand in the present case is barred by limitation and accordingly set aside the same and allow the appeal, without going into the merits of the matter.

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Equivalent 1999 (106) ELT 204 (Tribunal)