LTDJALANI ENTERPRISES Vs. CCE JAIPUR

JUDGEMENT

(1.) THIS order will dispose of two appeals filed by the appellants, one bearing bearing No.E/2521/2000 -V, which has been preferred against the impugned order dated 27.4.2000 of the Commissioner(Appeals), vide which he had upheld the order in original of the Veputy Commissioner dated 27.9.99 classifying the product in question jaljira of the appellants under Chapter 21 of the CETA and the other bearing No.E/2541/2000 -V directed against the impugned order in original of the Commissioner dated 12.5.2000 confirming demand of Rs.22,78,788/ - and imposing penalty of Rs.19.34,246/ - under Section 11 -AC and of Rs.5 lakhs under Rule 173 -2 of the Central Excise Rules alongwith the interest, on the appellants.

(2.) THE appellants were engaged in the manufacture of branded as well as unbranded jaljira classifiable under Chapter 21 of the CETA. They filed classification declaration under Rule 173 -B of the Rules effective from 6.7.98 clasifying this product under Chapter 9 (sub -heading 0903.10(branded) and under 0903.10(unbranded) of the CETA. They also mentioned in their classification declaration that they would be paying duty at the rate of 18% for the branded product and nil rate for unbranded and would be also availing exemption Notification No.8/98 -CE dated 2.6.98, under protest. But it revealed that their branded product(jaljira) was appropriately classifiable under Chapter 21(sub -heading 2108.99) of the CETA attracting 18% and valorem rate of duty, while unbranded was classifiable under sub -heading 2108.91 of the CETA chargeable to nil rate of duty. It also appeared that the clearances of branded goods were to be taken into account, while computing the aggregate value of the clearances for the purposes of deciding the exemption Notification No.8/98 -CE dated 2.6.98 right from 1.4.98 as the goods were dutiable at the rate of 18% even prior to 2/6/98 in the financial year 1998 -99. The statement of Shri Shushil Jalani, proprietor was also recorded 25.6.98 wherein he gave the detail of clearances of the goods made during the years 1995 -96 to 1997 -98 and from his statement it revealed that the appellants had exceeded the SSI exemption limit. He, however, pleaded that the product jaljira was a spice and hence not dutiable being classifiable under Chapter 9 of the CETA.

(3.) ACCORDINGLY one show cause notice dated 8/9.3.99 was issued to the appellants proposing classification of their product under Chapter 21(sub -heading 2108.99 and 2108.91) of the CETA and and other show cause notice dated 9.11.99 was issued vide which only demand of amount of Rs.2278788/ - for the period 1995 -96 to 1997 -98 was raised from them. The appellants contested the correctness of both those show cause notices and claimed classification of their product jaljira only under Chapter 9 of the CETA as masala/spice and also avered that the duty demand was time barred. The Deputy Commissioner through under in original dated 27.9.99, who adjudicated the show cause notice dated 8/9.3.99 held the classification under Chapter 21(sub -heading 2108.99(branded jaljira) and sub -heading 2108.91(unbranded) of the CETA. This order of the Veputy Commissioner was upheld by the Commissioner vide dated 27.4.2000 which is under challenge before us in Appeal No.E/2521/2000 -V. Similarly, the Commissioner who adjudicated the second show cause notice dated 9.11.99 regarding the duty demand, confirmed the duty demand and also imposed penalty on the appellants, as detailed above through impugned order dated 12.5.2000.