K. Prakash Anand, Member (T)

1. It is alleged in the present matter that the appellant company used to receive proofed coloured canvas from various proffers , which was given by them to tailoring, contractors, who used to fabricate such proofed canvas into tarpaulin with the aid of power operated sewing machines. The company's agency division, in this manner, was allegedly fabricating tarpaulin for more than 25 years but this fact was not reported to the Department. The process of fabrication of tarpaulin adopted by the company and other details regarding employment of contract labour, use of power operated sewing machines, etc. were also not intimated to the Department; nor was a sample of completed tarpaulin furnished to the Department to enable it to examine it for purposes of correct classification. At one stage, a clarification was sought by the company from the Department but on a hypothetical note stating that they were planning the manufacture of tarpaulin in their mills and not that they were already engaged in such manufacture. It is alleged that the appellant company had failed to pay appropriate excise duty on the tarpaulins manufactured in their Agencies Division f