ARFAAT TEXTILES Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants are aggrieved by the order of the Additional Collector of Central Excise, Ah -medabad confirming a duty demand of Rs. 36,834/ - by applying the extended period of limitation under the proviso to Section 11A of the Central Excise Act, 1944 - duty confirmation is as a result of denial of benefit of Notification 48/90 to processed cotton fabrics manufactured by the appellants herein on the ground that they used power for the purpose of colour fixation on their fabrics while use of power in the processing of cotton fabrics disentitles them from the benefit of nil rate of duty under Sl. No. 3 of the Table annexed to Notification 48/90. The benefit of Notification 253/82 which was claimed in the alternative has also been denied on the ground that what the appellants carried out was colour fixation while SI. No. 10 of the Table annexed to this Notification only permits power in the processing of padding i.e. applying of natural starch on one or both sides of the fabrics. In addition a penalty of Rs. 2,000/ - has been imposed.

(2.) WE have heard Shri Jitendra Singh, learned Advocate and Shri V.M. Udhoji, learned DR and perused the records.

(3.) THERE is no dispute that the appellants carried out the process of colour fixation with the aid of power. The benefit in terms of Sl. No. 3 of the Table to Notification 48/90 is available only if cotton fabrics are processed without the aid of power or steam and the explanation to the Notification clarifies that the use of steam for colour fixation is permissible. However, use of power for colour fixation is not permitted if the appellants seek to get the benefit of this Notification. In view of the factual position which is admitted, there is no infirmity in the impugned order denying the benefit of Notification 48/90. The benefit of Notification 253/82 is also not available since it is only the padding i.e. application of natural starch with the aid of power, that is a permissible process with the aid of power under the above mentioned Notification at SI. No. 10 of the Table annexed thereto, and since silicate is neither starch nor fatty material mentioned in Sl. No. 10. The extended period of limitation is available to the Department since the appellants did not take out a Central Excise licence or followed any of the Central Excise formalities and their plea that they were under an impression that application of sodium silicate on cotton fabrics is equal to the process of padding covered by Notification 253/82 is not borne out by any bona fide belief. The contention of the learned Counsel that the order has been passed on a different footing from the ground raised in the show cause notice viz. that while the order proceeds to confirm duty on the ground of use of power for colour fixation, the show cause notice alleges use of power in printing, is not factually correct since the show cause notice itself clearly alleges use of power in colour fixation by sodium silicate process resulting in denial of the benefit of Notifications 253/82 and 48/90.