Per Lajja Ram :

In this appeal filed by M/s. Khatao Makanji Spg. and Wvg. Co., the matter relates to the duty liability in respect of Punched paper dobby cards. The appellants were purchasing from the market unpunched dobby cards which were then cut to size, punched, pasted into a cylinderical form and then were used captively on the looms. It was alleged in the show cause notice dated 13.12.90 issued by the Additional Collector of Central Excise, Bombay that the appellants had not filed at the proper time the classification list, price list and had cleared the excisable goods without proper gate passes and had also not filed RT 12 returns with the proper officer. It was alleged in the show cause notice that it amounted to the suppression of facts. The Additional Collector, Central Excise Bombay who adjudicated the matter confirmed a demand of Rs. 629.64 and imposed a penalty of Rs. 200/-.

2. When the matter was called, no one appeared for the appellants. The notice for today's hearing had been duly issued to the appellants on 8.12.98. There is no request for adjournment. As the matter is old - demand relates to the period 1986-87 - we proceed to deal with the matter on merits after hearing Shri Prabhat Kumar, SDR.

3. We have carefully considered the matter and have given due consideration to the submissions made by the Departmental Representative. We find that in the show cause notice cum demand dated 13.12.90, it had been observed that the appellant had suppressed the facts and had not filed at the proper time the classification list and the price list. No other ground had been mentioned in the show cause notice to substantiate the charge of suppression. The appellants in reply to the show cause notice had submitted that they had a bona fide belief that the activity undertaken by them did not result in bringing into existence any new product. From the market they had purchased duty paid dobby cards which remains dobby cards after they were punched. It was under such bona fide belief that they had not filed classification list or price list. They had further submitted that the entire activity of punching duty paid dobby cards purchased from the market was done under the cognizance of the Department. The concerned Range Superintendent and Inspector were having their office situated in their premises.

4. Shri Prabhat Kumar, SDR submitted that it was the responsibility of the assessee to get a clarification if they had any doubt about the excisability of the product. Without any clarification from the department, on their own, they had suppressed the fact of manufacture and have removed the goods for captive consumption without payment of Central Excise duty. He referred to the Tribunal's decision in the case of Kin Engg. Products Pvt. Ltd. Vs. Collector of Central Excise Bangalore reported in 1990 (30) ECR 1999 (Tri.) where it had been observed that it is not necessary that word 'suppression' should be specifically mentioned in the show cause notice if the facts are otherwise mentioned in the notice. He also referred to the Tribunals' decision in the case of Punjab Anand Lamp Industries Vs. Collector of Central Excise, Chandigarh reported in 1989 (23) ECR 218 (Tri) where it has been observed that under the self-removal procedure the manufacturer was responsible for bringing the goods manufactured for captive use, to the notice of the authorities. He also referred to the Indore Collectorate Trade Notice No. 85/91 dated 19.9.91 wherein it has been clarified that the process of cutting to size and punching and pasting dobby cards which are used by the Textile Units on looms to cut, woven designs on cloth would amount to manufacture and the resultant product would appropriately be classifiable under sub heading No. 4823.90 when made of paper and under sub heading 3926.90 if made of plastic. The Trade Notice appears at page T-10 of the Volume 86 of the Excise Law Times.

5. We find in this case that earlier a show cause notice had be