2003(02)LCX0055

IN THE CEGAT, NORTHERN BENCH, NEW DELHI

S/Shri V.K. Agrawal, Member (T) and P.S. Bajaj, Member (J)

H.P.L. CHEMICALS LTD.

Versus

COMMISSIONER OF C. EX., CHANDIGARH-I

Final Order No. 134/2003-NB(B) and Misc. Order No. 27/2003-NB(B), dated 13-2-2003 in Appeal No. E/2560/2001-C

CASES CITED

Commissioner v. H.P.L. Chemicals Ltd. — 2000(12)LCX0250 Eq 2001 (127) ELT 0069 (Tribunal) — Referred.... [Para 6]

Richardson & Cruddas Ltd. v. Commissioner — 2001(11)LCX0095 Eq 2002 (145) ELT 0168 (Tribunal) — Relied on [Para 4]

REPRESENTED BY :   Shri M. Chandrasekharan, Sr. Advocate, for the Appellant.

Shri V. Valte, SDR, for the Respondent.

[Order per : P.S. Bajaj, Member (J)]. - Heard.

2. The appellants have moved the present ROM application seeking rectification of mistake in the impugned final order No. 98/02-C dated 9-5-2002 vide which their appeal was dismissed. The ground made out for seeking rectification in the application is that, the issue of limitation specifically raised by them in the grounds of appeal had not been considered while passing the impugned order. This very ground has been reiterated by the counsel before us.

3. The learned SDR has, however, contended that the plea of limitation raised by the appellants could not be considered as they did not put up appearance on 9-5-2002 - the date on which the appeal was listed for hearing.

4. We have heard both sides and gone through the record. From the record we find that on 9-5-2002, the present appeal was posted for regular hearing, but on that date none appeared on behalf of the appellants and the Bench decided the appeal by following the earlier order of the Tribunal passed in the appellants’ own case regarding the classification of the goods. They, no doubt, raised the issue of limitation in the grounds of appeal by alleging that the demand was time-barred as there was no suppression of material facts by them from the Department, but the same had not been considered. In the case of Richardson & Cruddas Ltd. v. CCE. Mumbai-I, 2001(11)LCX0095 Eq 2002 (145) ELT 0168 (T) = 2002 (049) RLT 0239 (CEGAT-Mum.), it has been observed by the Bombay Bench of the Tribunal that non-consideration of the plea made in the appeal memo is a mistake apparent on the record. That being so, the ROM application of the appellants deserves to be accepted as their plea of limitation has not been considered, though raised in the memo of appeal, by the Bench while passing the impugned order. Therefore, the impugned final order dated 9-5-2002 is recalled.

5. We have heard both the sides on merits also. The appellants are engaged in the manufacture of Hydrazine, an inorganic chemical. The issue involved was the classification of the residue material which is left in centrifuge while manufacturing the main product with the help of Chemical Combination of Caustic Soda and Chlorine. The appellants had claimed classification under Tariff Heading 2501 as Denatured Salt on the ground that this residue material contained more than 50% Sodium Chloride with mixture of other salts and is unfit for human consumption, whereas the stand taken up by the Revenue is that, the residue material in question falls under Tariff Heading 3842 being residue product of Chemical and Allied Industries not elsewhere specified.

6. The adjudicating authority no doubt initially did not accept the classification as propounded by the appellants. But it is an admitted fact that their appeal against that order of the adjudicating authority, was accepted by the Commissioner (Appeals) vide order-in-appeal No. 696/CE/CHD/2000. However, that order of the Commissioner (Appeals) was reversed by the Tribunal vide Final Order No. 526/2000 dated 7-12-2000 as reported in 2001 (127) ELT 69.

7. From all the above referred admitted facts, it is quite evident that there was bona fide dispute regarding the classification of the residue material produced by the appellants in the course of manufacture of the final product. Therefore, it is difficult to accept that there was any suppression of material fact by the appellants from the Department. The appellants disclosed their entire process of manufacture of the final product, and the stage at which the residue material came into existence, to the Department. According to their belief, the residue materials were classifiable under Tariff Heading 2501, whereas the Department wanted classification under Tariff Heading 3824. This dispute between the parties was set at rest only by the Tribunal ultimately vide final order dated 7-12-2000, referred to above. In these circumstances, it is difficult to accept the plea of the Revenue that there had been suppression of material facts by the appellants so as to allow them to revoke the extended period of limitation. The duty demand pertains to the period September 1994 to July 1996, whereas the show cause notice was issued to them only on 21-7-1999 much after the prescribed period. Therefore, apparently the duty demand raised by the Revenue, is time-barred.

8. In view of the discussion made above, the impugned order of Commissioner (Appeals) cannot be legally sustained and is set aside on the question of limitation. The appeal of the appellants accordingly stands allowed with consequential relief if any, permissible under the law.

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Equivalent 2003 (154) ELT 0435 (Tri. - Del.)