(A.K. Sikri and Rohinton Fali Nariman, JJ.)
M/s. Caprihans India Ltd. _________________ Appellant
v.
Commissioner of Central Excise, Surat ______ Respondent
Civil Appeal No. 5239 of 2006, decided on September 9, 2015
The Order of the court was delivered by
Order
1. The appellant-assessee herein is engaged in printing of PVC films/sheets at its factory located in Daman. The appellant has classified its goods under Chapter Heading 4901 of the Schedule to Central Excise Tariff Act, 1985, and were clearing the goods by paying the excise duty payable for the items covered by the said Heading. Show Cause Notice dated 18.02.1994 was issued by the Department asking the appellant to show cause as to why the aforesaid goods manufactured by the assessee be not classified under Chapter Heading 3926.90. The appellant contested the same. The plea of the appellant was accepted and orders dated 27.05.1994 were passed thereby dropping the proposed move in the Show Cause Notice and allowing the appellant to clear the goods with classification under Chapter Heading 4901. The goods in this manner were thereafter cleared from 1994 till 1999 when another Show Cause Notice dated 31.05.1999 was issued for the period 28.05.1994 to 30.06.1996 stating that during this period goods were wrongly cleared under Chapter Heading 4901 and instead appropriate classification was 3926.90. On that basis, differential duty was demanded and interest and penalty were also proposed. The appellant filed its reply stating the facts mentioned above, submitting that the goods were rightly classified under Chapter 4901. The contention of the appellant was not accepted resulting into passing of Order-in-Original dated 29.12.2000. This order has been affirmed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as ‘CESTAT’) as well.
2. We may mention here that the appellant has also taken the plea that the Show Cause Notice dated 31.05.1999 is time barred and is issued beyond the period of six months inasmuch as the period covered in the said Show Cause Notice is 28.05.1995 to 30.06.1996, further submitting that there was no mis-statement or mis-declaration on its part and therefore, the Revenue was not entitled to invoke the extended period of limitation contained in proviso to Section 11A of the Central Excise Act. This plea was not accepted by the adjudicating authority on the ground that the assessee had deliberately mis-declared their activity of printing of PVC films/sheets as motif and pictorial representation falling under Chapter 49 of Central Excise Tariff Act, 1985, in order to mislead the department and taken undue advantage of Section Note 2 of Section VII of the said Act. The appellant had challenged the Order-in-Original before the CESTAT, also on the ground that it was barred by limitation. The CESTAT has, however, not gone into those issues at all while dismissing the appeal of the appellant.
3. We are of the opinion that the present appeal warrants to be allowed only on the ground that the impugned show cause notice was time barred and it was not a case where the Revenue could invoke the provisions of proviso to Section 11A of the Central Excise Act and take benefit of the extended period of limitation. From the facts noted above, it becomes clear that the Department had issued Show Cause Notice way back on 18.02.1994 asking the appellant to reclassify the goods under Chapter Heading 3920. Therefore, all relevant facts were within the knowledge/notice of the Department. Not only this, after the appellant had filed the reply to the said Show Cause Notice and was heard in the matter, the proposed move in the said Show Cause Notice was even dropped.
4. Therefore, under the aforesaid circumstances, by no stretch of imagination, the appellant can be treated as a person who had misled the authorities or made any mis-statement/mis-declaration. The appeal is allowed on this ground itself without going into the issue of classification setting aside the impugned order. As a result, the impugned orders passed by the authorities below are set aside.
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