S.C. Jain, Member (J)

1. Briefly staled the facts of the case are that Shree Baidyanath Ayurved Bhawan Limited, Nagpur (hereinafter called the appellants) manufacture patent or proprietary medicine falling under item 14E of the CET. They also manufacture other products including (1) Dant Manjan, (2) Surma and (3) Kajal.

Prior to 1975, the appellants classified Dant Manjans, Surmas and Kajals manufactured by them under item 7 of the classification list meant for showing "other goods manufactured". With effect from 1-3-1978 when a residuary item 68 was introduced in the Central Excise Tariff, these three products were classi-Pharmaceuticals and drug intermediates not elsewhere specified were exempted from payment of excise duty. The appellants treated these products, namely, Dant Manjan, Surma and Kajal as Ayurvedic drugs/medicines and did not pay any excise duty with effect from 1-3-1978 by taking benefit of Notification No. 62/78 C.E., dated 1-3-1978.

2. The Superintendent, Central Excise, Range V, Nagpur issued to the appellants a show cause notice dated 3-11-1981. A paragraph of this notice reads as under :

"And whereas it appears that the notice have been wrongly and wilfully t