S. Duggal, Member (J)

1. The product, which is subject-matter of the present appeal, filed originally before the Central Board of Excise and Customs, New Delhi, is what the appellants describe as: 'Wheels, Axles and Wheel Sets'. The appellants state to have commenced manufacture of these items in their Durgapur Steel Plant since 1962, which they supply primarily to Indian Railways. These were being classified, from the inception, to be falling within the category of: 'forged products in shapes and sections not elsewhere specified' as described against Sub-item (ia) of Item 26AA of the Central Excise Tariff, (C.E.T. for short).

2. According to the appellants, even after induction of Tariff Item 68 in the C.E.T., w.e.f. 1-3-1975, and on fresh classification lists having been filed, the goods; namely, wheels and axles (including sets), were duly approved by the proper officer on physical verification, to be classifiable under TI 26AA(ia). The appellants have claimed that the Department has, all through, treated these wheels and axles as 'forged products' within the contemplation of TI 26AA(ia), and that the appellants have been clearing the goods on this assumption but the Department issued a show cause notice, covering the period 1-3-1975 to 27-4-1980, for the first time on 28-4-1980 calling upon the appellants to show cause as to why the final products, cleared as wheels, axles and wheel-sets, after having discharged duty-liability at the forging stage under TI 26AA(ia), be not assessed to duty as 'finished products' under TI 68. This notice was followed by a corrigendum issued on 30-9-1981, on which date another notice was also issued for the subsequent period: 28-4-1980 to 31-8-1981. Yet another notice was issued on 17-2-1982 for clearances effected during the period 1-9-1981 to 30-11-1981.

3. The appellants contested the notices by contending that the goods which they cleared were nothing beyond forged products, and that the Department had been accepting them as such since manufacture thereof was started in 1962 and classification-lists, filed to that effect, had been approved from time to time, including those filed after the inclusion of TI 68 in the C.E.T., till as late as in 1979. Besides pleading that it was thoroughly within the knowledge of the Department as to in what shape and condition the products were being cleared by the appellants because of the clear description in the classification-lists and, as such, there was no suppression or mis-statement of facts so as to attract the extended period and, consequently, the notices were barred by time; they also contended that, on merits, the goods had been rightly cleared by them under TI 26AA(ia).

4. In support of the plea of time-bar, in addition to the classification-lists approved from time to time, the appellants also placed reliance on the fact that RT-12 returns, filed monthly, gave full description of the goods and there had been always complete scrutiny while recording assessments on the monthly returns and, further, that in relation with the accounting procedure in RG-1 Register; the Assistant Collector, after regular proceedings and after show cause notice, recorded a detailed order on 5-7-1978 directing them that the production should be treated for purpose of recording in RG-1 Register at the stage when the goods, which are mainly supplied to the Railways, have been inspected by the Rail India Technical and Economical Services (RITES for short). It was contended that the accounting of production against TI 26AA was in issue, and that the Assistant Collector, after noting the entire procedure, details of the manufacturing process of the goods, and the final form in which they were supplied to the Railways, passed a conscious order whereunder the wheels and axles, after they had undergone the process of machining and polishing, and had been inspected by the RITES, were still treated by the Department within the ambit of Sub-item (ia) of Item No. 26AA, and tha