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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
B.B. Gujral, M. Gouri Shankar Murthy, K.L. Rekhi, JJ.
Pefco Foundry Chemicals Ltd. -Appellant
Versus
Collector of Central Excise, Pune -Respondent
Order No. B-623/84, 623 of 1984
Decided On : 17-08-1984
M. Gouri Shankar Murthy, Member (J)
1. The allegations, in so far material in this Appeal under Section 35B of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act), were-
(a) the Appellant had been making castings of diverse types for various industries since 1973. The castings had always been classified under Item 25 of the 1st Schedule to the Act, to wit, "iron in any crude form including pig iron, scrap iron, molten iron or iron cast in any other shape or size," right from 1976 and exempted from duty under Notification No. 74/62-CE, dated 24-4-62, as amended by Notification No. 119/64, dated 27-6-1964.
(b) earlier, the Appellant filed a classification list on 15th April, 1981 claiming exemption in respect of "Iron in any crude form-cast iron castings (semi-finished, proof machined or partially machined) for-
(1) * * *
(2) * * *
(3) Cylinder liners proof machined to Part No. CC-F-3 (Rev.!).
(4) Cylinder liners proof machined to Part No. 10123116 which is not identifiable part in that it is partially machined only and not ready for use."
under the aforesaid notification No. 74/62 and it was duly approved by the Asstt. Collector in November, 1981; (Exhibit F in the Paper Book).
(c) however, in consequence of an audit objection dated 3-7-1981 (to (C) Which the Appellant submitted a reply dated 6th August, 1981), a notice dated 17-8-1981 (Exhibit D in the Paper Book) was issued to the Appellant under Section 11A of the Act, alleging inter alia that-
(i) cylinder liners manufactured by the Appellant were cleared as cast iron castings under Item 25 of the First Schedule to the Act without payment of duty under the aforesaid notification,
(ii) however, on physical verification, they were found to be identifiable as machine parts having undergone machining and polishing before clearance/removal;
(iii) the cylinder liners in question would hence fall under Item 68 of the First Schedule;
(iv) they were, however, removed without payment of duty ;
(v) such removals were with intent to evade payment of duty which, in the premises, became recoverable under the proviso to Section. 11A of the Act,
and requiring the Appellant to show cause to the Assistant Collector of Central excise as to why duty in a sum of Rs. 3,07,028 at 8% ad valorem in terms of Item 68 of the First Schedule to the Act in respect of cylinder liners cleared between September, 1980 and March, 1981 should not be levied and paid ;
(d) on the submission of a reply on 29-9-1981 (Exhibit E in the Paper Book) by the Appellant, the show cause notice was, apparently, not proceeded with ;
(e) subsequently, notwithstanding the approval accorded to an identical classification list dated 17-8-81 in November, 1981, [para (b) supra] another show cause notice dated 16th January, 1982 was issued by the self same Assistant Collector. The said notice (Exhibit G in the Paper Book) is almost identical in terms with the earlier show cause notice dated 17-8-1981 except that it required the Appellant to show cause why-
(i) the product in question should not be classified under Tariff Item 68 with appropriate rate of duty leviable thereon with effect from 1-3-1981 ; and
(ii) the differential duty (being the difference of duty assessed and duty payable) should not be demanded as per provisions of Section. 11A of the Act, for which data of such duty payable is being forwarded separately;
(f) in adjudication, the Assistant Collector, by order dated 6th July, 1982, directed that the cylinder liners in question should first be classified under Item No. 25 of the First Schedule as castings and then under Item 68 as cylinder liners and demanded duty of Rs. 7,30,393.76 [within 10 days of the receipt of the order] since the demand for the period Sept. 1980 to Jan. 1981 was barred by limitation;
(g) in appeal, the Appellate Collector by an order dated 6th July, 1982 upheld the adjudication order except to the extent that the demands "which are issued for a period longer than six months from the da
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