G. Sankaran, Member (T)

1. The 2 captioned appeals arise out of and are directed against a common Order-in-Appeal dated 28-4-1982 passed by the Central Board of Excise Customs disposing of the appeals filed before the Board by the 2 appellants. Since the issues involved in both the appeals are similar, this common order disposes of both the appeals.

2. The facts of the case which are relevant and necessary for appreciating the dispute before us, briefly stated, are that M/s. Siddeshwari Cotton Mills (P) Ltd. (hereinafter referred to as Siddeshwari Mills) was charged by the Central Excise authorities for contravention of the provisions of Rules 9(1), 174, 173-B 173-C, 173-F, read with Rules 173-G(1), 173-G (2), 173-G(4), and 173-G(5) of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) inasmuch as they were alleged to have manufactured and removed a quantity of 6 09 848 47 sq. metres of calendered cotton fabrics falling under Item No. 19-I(b) of the 1st Schedule to the Central Excises and Salt Act (hereinafter referred to as the CET) during the period from 14-5-1981 to 19-9-1981 without obtaining a Central Excise licence, without maintaining any statutory records, without submission of price list/classification list, without observing any Central Excise formalities and without payment of Central Excise duty leviable thereon, amounting to Rs. 2,62,767.04.

(i) The allegations against M/s. Jatia Cotton Mills Ltd. (hereinafter referred to as Jatia Mills) were that they had contravened Rules 9 (1) 173-B 73-C, 173-F and 173-G of the Rules inasmuch as they had manufactured and cleared a quantity of 3.40,136.40 sq metres of cotton fabrics falling under Item No. 19-1 (b) of the CET during the period from 12-5-1981 to 19-9-1981 without payment of duty by availing of exemption under Central Excise Notifications Nos 230/77 and 231/77 both dated 15-7-1977, although they were not entitled to such exemption because they had a calendering plan? in their factory and cotton fabrics woven on powerlooms and cleared after subjecting the same to the process of calendering within the same premises were not exempt from duty under the aforesaid Notifications

(ii) The Collector of Central Excise, Calcutta who adjudicated the 2 cases held that the charges levelled against Siddeshwari Mills were established. He, therefore, directed the Mills to pay duty amounting to Rs. 2,62,766.04. Further, he imposed a penalty of Rs. one lakh on the Mills under Rule 173-Q of the said Rules.

(iii) In the case of Jatia Mills, the Collector similarly held that the charges levelled were established. He directed the Mills to pay duty of Rs. 25,000 under Rule 173.Q.

(iv) Aggrieved with the Collector's orders, the 2 Mills went in appeal to the Central Board of Excise Customs. By its order dated 28-4-1982, the Board upheld the Collector's order directing the appellants to pay duty on the goods already manufactured and cleared during the material period. However, it set aside the penalties imposed on the 2 appellants. It is the Board's order confirming the demands for duty that is now under challenge before us.

3. In a short compass, therefore, the issue for our consideration is whether the calendered fabrics manufactured and cleared by the appellants were liable to be charged to duty during the material period, as held by the Collector and as confirmed by the Board.

4. The points being more or less the same, Shri Rangaswamy, the Counsel for the appellants, first took up Appeal No. 425/82-c\C and stated that barring certain minor differences, the submissions would apply to the other case as well.

The contentions put forth may be summarised thus :

(i) The appellants were engaged in calendering of cotton fabrics manufactured by powerlooms. The calendering was done by means of a plain roller calendering machine.

(ii) C.E. Notification No. 80/76 dated 16-3-1976 exempted cotton fabrics when subjected to certain specified finishing processes. One of the specified pro