JUDGMENT :

Heard Mr. S.C. Keyal, learned Senior Standing Counsel for Central Board of Indirect Taxes as well as Mr. A. Chakrabarti, learned counsel for the respondent.

2. This appeal under Section 35-G of the Central Excise Act, 1944, is directed against the Final Order No. FO/78343/2017 dated 01.12.2017, passed by the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT” for short), Eastern Zonal Bench, Kolkata, in Excise Appeal No. E/70449/2013.

3. By the said order, the learned CESTAT had rejected the demand for duty raised by the appellant, on the ground that the demand was made beyond the normal period of 6 (six) months from the date of issuance of the show-cause notice. Accordingly, the original authority was directed to re-quantify and restrict the demand in terms of the said order by holding that there is no justification to impose any penalty, which was set aside.

4. In this appeal, the case projected by the appellant is that the respondent is dealing in manufacture and sale of “Block Board”. The said item was classified under Chapter Tariff Sub-Heading No. 4408.90 and the prescribed Excise duty was being paid thereon. However, on and from 28.02.1986, the respondent had classified their same product under Chapter Tariff Sub-Heading No. 4410.90, where excise duty prescribed was “NIL”. The Superintendent of Central Excise, Doomdooma Range-I, issued a demand-cum-show cause notice dated 24.07.1995 to the respondent, stating therein that a refund of Rs.68,59,125.62 was given to the petitioner in respect of Central Excise Duty paid by them for clearing of Block Boards for the period from 28.02.1986 to 25.07.1989, vide Adjudication order No. V(18)33/Refund/AC DIG/90/660-666 dated 14.05.1991, passed by the Assistant Collector of Customs and Central Excise, Digboi, which virtually resulted in clearance of Block Boards at ‘nil’ rate of duty for the said period. The respondent was also put to notice that for the period between 26.07.1989 to 28.02.1993, the Block Boards were cleared at ‘nil’ rate of duty by classifying the same under Sub-Heading No. 4408.90 of the Central Excise Tariff. However, the Supreme Court of India, by its judgment dated 20.03.1995, passed in the case of Collector of Central Excise, Shillong v. Wood Crafts Products & Ors., 1995 (77) ELT 23 (SC), had confirmed that the correct classification of Block Board was under Sub-Heading No. 4408.90 of the Central Excise Tariff for the period from 28.02.1986 to 19.03.1990, 20.03.1990 to 28.02.1992 and 01.03.1992 onwards. Accordingly, the following demand was raised upon the appellant:-

(I) Rs.67,04,503.08 (Basic) } Refunded to them for the period from

+ Rs.1,54,612.54 (Special)} 28.02.1986 to 25.07.1989

(II) Rs.66,85,752.92 (Basic) } Subsequent clearance at NIL rate of

+ Rs.6,49,888.71 (Special)} duty for the period from 26.07.89 to 28.02.1993

(III) Total - Rs.1,33,90,266.00 (Basic)

+ Rs.8,04,501.25 Special

The said demand was made under Section 11A of the Central Excises and Salt Act 1944, read with Rule 173(1)(2) of the Central Excise Rules, 1944 and moreover, the respondent was also put to notice as to why the said amount shall not be recovered within 30 days from the date of receipt of the notice.

5. The learned counsel for the appellant has submitted that the litigation with regard to the classification of the Block Boards was pending for a long time, and the issue received a quietus from the Supreme Court of India by its judgment passed in the case of Wood Crafts Products (supra). By the said decision, the classification of Block Board was confirmed to be under Sub-Heading No. 4408.90 of the Central Excise Tariff. It is further submitted that the said judgment of the Supreme Court of India was passed on 20.03.1995 and as the show-cause notice was issued on 24.07.1995, it was well within the prescribed period of limitation of 6 (six) months as envisaged under Section 11(A) of the Central Excises and Salt Act, 1944. It has also been submitted that the respondent had a