BHARAT CARBON AND RIBBON MFG. CO. Vs. CCE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Bharat Carbon and Ribbon Mfg. Co. is whether the extended period of limitation is invocable for demanding Central Excise duty.

(2.) Shri B.L. Barasimhan, learned Advocate, submitted that the appellants manufacture, inter alia, carbon paper, which was classified by them under Tariff Item 68 of the old Central Excise Tariff; that they were periodically filing the classification lists under Rule 173 B of the Central Excise Rules, 1944 with the Department and these classification lists were duly approved by the proper officer; that a show cause notice dated 8.2.1980 was issued to them for classifying the impugned product under Tariff Item 17(2) and another show cause notice dated 11.3.80 was issued proposing to withdraw the classification approved by the Excise Department; that, subsequently, a letter dated 21.4.80 was issued to them for demanding differential duty for the period from 16.3.76 to 31.12.1979; that the Commissioner, under the impugned Order, has confirmed the demand of duty under Rule 10 (1) of the Central Excise Rules, 1944 besides imposing a penalty of Rs. 20 lakh. The learned Advocate, further, submitted that the time limit provided for issuance of show cause notice under Rule 10 was six months from the relevant date; that as the appellants were filing the classification lists claiming the classification of the impugned product under Tariff Item 68, there was no fraud, suppression or collusion, etc. on the part of the appellants and as such the extended period of limitation cannot be invoked; that it has been held by the Supreme Court in the case of CCE v. H.M.M. Ltd., 2002 (80) ECC 6 (SC) : 1995 (78) ELT 401 that suppression does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties, the omission by one to do what he might have done and not that he must have done, does not render it suppression.

(3.) He, finally, submitted that as the classification lists filed by them have been approved by the Department, show cause notice cannot be issued for the past period of six months also for demanding the duty as held by the Supreme Court in the case of CCE, Baroda v. Cotspun Ltd., 2000 (69) ECC 451 (SC) : 1999 (113) ELT 353 (SC); that Section 110 of the Finance Act, 2000 which validates the action taken under Section 11A of the Central Excise Act has been given retrospective effect only for the period commencing from 17.11.1980 when Section 11A of the Central Excise Act came into effect; that Section 110 of the Finance Act does not validate the action taken under Rule 10 of the Central Excise Rules, 1944; that as in the present matter demand has been raised under Rule 10 after approval of the classification lists, the same is not sustainable.