V.T. Raghavachari, Member (J)

1. According to the appellants M/s. Kwality Containers Pvt. Ltd. they manufacture pilferage proof caps falling under TI 42 CET as also aluminium tear off vial as well as an aluminium tear down vial seals falling under TI-68 CET. In respect of the pilferage proof caps they were claiming exemption under notification 83/83 and in respect of the other aluminium vial seals they were claiming exemption under notification 77/83. In respect of these aluminium vial seals the department had a doubt on the classifiability under TI 68 but, subsequently, the Assistant Collector under order dated 8.10.1980 settled their classification under TI 68 CET.

2. After a visit of their factory on 21.1.1985 during the course of which 3,31,000 pieces of tear off and tear down vial seals were seized under the belief that they are classifiable under TI 42 CET and not under TI 68 CET. Action was initiated by issue of notice dated 6.6.1985. It was alleged that as these seals had been manufactured and cleared without payment of duty under TI-42 CET the appellants had contravened various rules and had made themselves liable for penalty, confiscation and demand of duty. After the appellants had sent their reply an adjudication was held by the Collector of Central Excise Bombay II (now Bombay III on reorganisation) in which he held that the vial seals were classifiable as pilferage proof caps under TI 42 CET and the charges against the applicants were therefore made out. But he restricted the demand to the normal period under Section 11-A of the Central Excises and Salt Act. It is against the said order of the Collector dated 24.12.85 that the present appeal has been preferred.

3. We have heard Shri V. Laxmikumaran, Advocate for the appellants and Shri G.V. Naik for the department.

4. Samples drawn of the products in question as manufactured by the appellants as also by another manufacture were also produced for our perusal during the course of our hearing.

5. The contentions of the appellants stated in short are that :

(i) The aluminium vial seals in question are not cap at all but only seals, and therefore there is no question of these products being pilferage proof caps;

(ii) these seals are not known as pilferage proof cap in the trade;

(iii) Reliance of the Collector on two earlier decisions of this Tribunal is misplaced since in one of them the party was not represented and the other did not deal with a product similar to the product in question ;

(iv) the classification of the product having been approved by the Assistant Collector the same cannot in law be disturbed by the Collector except by way of proceeding in review;

(v) the Collector had no jurisdiction to confirm the demand under Section 11-A of the Act as it then stood;

(vi) the confiscation of the goods was in any event not called for; and

(vii) the demand as confirmed in any event in excess of the period prescribed in Section 11-A of the Act.

6. As mentioned earlier there is no dispute regarding the classifiability under TI 42 CET of the screw down caps manufactured by the appellants which they themselves have classified under TI 42 CET as pilferage proof caps. The dispute rented to tear off and tear down aluminium seals manufactured by them. The tear off seals are to be used in injunction glass vial the tear down seals being used in other glass or plastic bottles meant to contain tablet, powder, capsules, etc. Shri Laxmikumaran contended that the function to be performed in case of tear down seals are (i) to hold the plastic cap in position, (ii) to provide decoration packaging and (iii) to prevent accidental spilling of the contents or kept during handling. In respect of the tear up seals he claimed that the functions were (i) to hold the rubber plug in position, (ii) to prevent spillage of the contents during handling and (iii) to prevent contamination of the plug or the contents. Therefore, in effect he stated that while these tear off and tear down seals may contrib