Per S.L. Peeran: This appeal arises from order-in-original dt. 31.5.88 passed by ld. Collector of Customs, Calcutta. By this order, the ld. Collector has confirmed a duty amount of Rs. 3,74,647.04 and has also imposed a penalty of Rs. 1 lakh under rule 173Q of the Central Excise Rules, 1944.

2. The facts of the case are that the appellants were manufacturing' Artificial or Synthetic Resin' without obtaining C.E. Licence and without observing the CE formalities and without paying the CE Duty as required under Tariff Item 15A of the old Tariff during the period 1981 to 1985-86 (upto Nov'85) for the said goods cleared during the period April'81 to Nov'85. Hence a show cause notice notice dt. 25.11.86 was issued to them.

3. By their reply dt. 29.6.87, submitted that they wrote a letter to the Asstt. Collector of Central Excise, Poddar Court on 2.2.80 enquiring about their obligations under CE regulations as manufactured of chemicals and auxiliaries and also tried to ascertained as to whether the product would attract CE Duty, for which, they did not receive any reply, but when personally contacted the Public Relation Officer of the Office of the ACCE, Calcutta DN. VIII, he informed that the products manufactured by SSI like their's is exempted from payment of CED under notification issued from time to time and that they need not obtain licence and maintain statutory records for production and deliveries so long their production and deliveries would be limited within the limit of exemption as prescribed by the Govt. They have submitted that in March'84, the CEC Preventive Officer, visited their factory and made enquiries about productions and deliveries of products manufactured by them since April, 1980, and that after such examination was satisfied that the goods were exempted. As per the adviced of the said CE Officer, they submitted an application to the Supdt. of Central Excise, Range-5, Calcutta-XIII Division in the form prescribed under Notification No. 111/78 dt. 9.5.78 as amended alongwith letter dt. 3.5.85. The Supdt. made necessary scrutiny of their records and satisfied himself of their exemption. The Supdt. informed then that they need not observe CE formalities by his letter dt. 25.6.84. They submit that after the Budget changes of 85-86, which reduced the exemption limit from Rs. 30 lakhs to Rs. 20 lakhs, they applied for licence vide their letter dt. 8.4.85 and thereafter Licence L-4 dt. 23.7.85 was issued to them. On 18.7.85, the factory was visited by the Supdt. and stocks were and samples drawn from two of their products lying in Stock namely' Acrinol G and Acrinol TPN for test and no samples were drawn form the other product. On 3.9.85, the Supdt. of Central Excise, Range-6,1 Divisionalso visited their factory and drew further samples. The reports of the samples drawn by Supdt (Prev,) with that of the samples drawn by Supdt. I Dn. differed in as much as the Chemical Examiner observed that the samples drawn by the Supdt. (Prev.) are "Aqueous emulsion of Styrenated Acrylic Co-Polymer Synthetic Resin in the form of free flowing liquid", whereas, the other sample drawn by Supdt. I were found to be "Aqueous emulsion essentially composed of acrylic type of synthetic resin emulsifier plasticizer and small amount of inorganic material". Hence, the department took the view that both over rules each other as Styrenated Acrylic Co-Polymer Synthetic Resins and Acrylic Type of Synthetic Resins and it cannot be the same material. Hence, the Supdt. (P) Calcutta instituted an enquiry against them by his visit on 18.7.85. All documents records for the period 80-81 to 85-86 were seized.

Against the charges regarding the year wise production against each item, they submitted that all the goods were classifiable under Tariff Item 68, including Acrinol-TP, Arcinol-TPN, Acrinol and Acrinol-GE, which they claimed to use in textile and leather industry. They denied these products to be classified under Tariff Item 15A based on the rep