Apple Systems Pvt. Ltd. vs Commissioner of Central Excise, Calcutta-I>2000(11)LCX0055

2000(11)LCX0055

IN THE CEGAT, EASTERN BENCH, KOLKATA

Smt. Archana Wadhwa, Member (J) and Dr. S.N. Busi, Member (T)

APPLE SYSTEMS PVT. LTD.

Versus

COMMISSIONER OF C. EX., CALCUTTA-I

Order No. A-1874/CAL/2000, dated 15-11-2000 in Appeal No. ER-292/2000

Advocated By : Shri S.K. Roychowdhury, Advocate, for the Appellant.

Shri A.K. Chattopadhyay, JDR, for the Respondent.

[Order per : Archana Wadhwa, Member (J)]. - Vide the impugned order passed by the authorities below, duty of Rs. 2,57,537.40 has been confirmed against the appellants and personal penalty of Rs. 30,000/- has been imposed.

2. We have heard Shri S.K. Roychowdhury, learned Advocate for the appellants and Shri A.K. Chattopadhyaya, learned JDR for the Revenue.

3. The demand in question has been confirmed for the period 1988 - 89 to 1991-92. The appellants during the relevant period were availing benefit of small scale Not. No. 175/86-C.E., dated 1-3-1986 and thereafter 1/93-C.E. Appellants were manufacturing two items ‘Line Conditioner’ and ‘Ferro Resonance Voltage Regulator’. There is no dispute as regards the Ferro Resonance Voltage Regulator being classifiable under Chapter 90. Both sides are disputing the correct classification of Line Conditioners. Whereas the appellants are claiming classification of the Line Conditioner u/s.h. No. 8473.00, the Revenue’s contention is that the same are classifiable under Chapter 90. As such, by observing that Line Conditioners are also classifiable under Chapter 90, the benefit of Not. No. 175/86-C.E. or 1/93-C.E. has been restricted to the first clearance of Rs. 15 lac on the premises that the goods fall under one Chapter. On the other hand, Shri Roychowdhury, learned Advocate shows us the classification list filed by the appellants in December, 1989 and the correspondence between the appellants and their jurisdictional Central Excise Authorities for impressing upon the point that right from the beginning the appellants have claimed the classification of Line Conditioner under Chapter 84 and the Revenue was also aware of the same. As such, as regards the classification of the product, Revenue cannot plead ignorance so as to invoke longer period of limitation. Inasmuch as during the relevant period the Revenue was in knowledge of the fact that the appellants have claimed classification of their two products under two different Chapters, the benefit of exemption to the first clearance of Rs. 30 lac in terms of small scale notification should have been granted to them. Even if the Line Conditioners are to be considered as classifiable under Chapter 90 the Revenue cannot invoke longer period of limitation.

4. Shri A.K. Chattopadhyay, learned JDR, appearing for the Revenue reiterates the reasoning of the adjudicating authority and submits that even if the contention of the appellants is accepted to be correct, a reading of the show-cause notice shows that clearance value of the appellants during different financial years exceeded Rs. 30 lac and as such, in any case the appellants are required to pay duty on the clearance over and above Rs. 30 lac.

5. After giving our careful consideration to the submissions made from both sides, we find both the sides to be correct. As regards the Line Conditioners and the correspondence exchanged by the appellants with their jurisdictional Central Excise authorities we find that the appellants’ claim for classification of Line Conditioners was in the knowledge of the Revenue. As such, the Revenue in the year 1993 cannot restrict the benefit of Not. No. 175/86-C.E. and 1/93 by contending that the appellants had proposed classification of Line Conditioners under Chapter 84 with intent to avail the small scale exemption benefit in respect of first clearance of Rs. 30 lac instead of Rs. 15 lac. As such, we hold that the demand of duty raised in the year 1993 on this ground is unsustainable.

6. However, we find from the show cause notice during the various financial years especially in the year 1989-90 and in the year 1990-91, the appellants had exceeded the limit of Rs. 30 lac. As such, even if the appellant’s contention is accepted that they are entitled in respect of first clearance of Rs. 30 lac they are still required to pay duty on the balance clearance. The above position has not been disputed by Shri S. K. Roychowdhury, learned Advocate. It is also on record that the appellants did not inform their Central Excise Authorities as regards the progressive total clearance of their final product during the various years. As such, we hold that in respect of payment of duty on the balance clearance, limitation will not apply.

7. There is another issue as regards the payment of duty on 38 pieces of Uninterrupted Power Supply System (UPSS) manufactured and removed from another unit of the appellants under the same proprietorship. Shri Roychowdhury has explained that the value of the said 38 pcs. of UPSS has already been included in the total value of clearance from the appellants’ factory while raising the demand of duty vide the impugned show cause notice. As he is not disputing the liability of the appellants to pay duty on 38 pcs. of UPSS, the value of which has already been included in the progressive total value of the clearance from the appellant’s factory, no orders are required to be passed on the same.

8. In view of the foregoing, we hold that duty liability of the appellants is to be requantified after extending the benefit of first clearance of Rs. 30 lac at nil rate of duty in terms of the notifications. As regards the personal penalty of Rs. 30,000/- keeping in view the submission made by Shri S.K. Roychowdhury, learned Advocate that with the reduction in duty, quantum of penalty should also be reduced, we reduce the same to Rs. 20,000/- (rupees twenty thousand only). The appeal is disposed of in the above terms.

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Equivalent 2001 (137) ELT 0250 (Tri. - Kolkata)