EVEREADY INDUSTRIES INDIA LTD. Vs. C.C.E.

JUDGEMENT

(1.) VIDE the impugned order of the Commissioner of Central Excise, Calcutta -1, penalty of Rs. 1 crore has been imposed on the appellants while dropping demand of Rs. 3,43,89,568.49 on the ground of time bar under Section 11A of the Central Excise and Salt Act, 1944. As per the facts on record, show cause notice dated 21.9.93 was issued to the appellants, who are manufacturer of dried cell batteries alleging that they had wrongly availed the benefit of Notification No. 94/76 -CE during the period 1979 to 1980 and 1984 to 1985, inasmuch as the said notification granted exemption to metal jacket batteries whereas the batteries manufactured by the appellants and cleared by them by availing the exemption under the aforesaid notification were aluminium foil jacketed batteries. As per the view entertained by the Department metal jacket battery is the one whose jacket was made of tin or iron and the batteries cannot be considered as metal jacketed batteries if the jacket of the battery is made of aluminium foil. The show cause notice issued by the Department raising demand of duty of Rs. 3,43,89,568.49 was dropped by the adjudicating authority on the technical ground of limitation inasmuch as the demand was raised beyond even the extended period of 5 years provided under Section 11A of the Act. However, he observed that though the demand cannot be confirmed on the ground of limitation, nevertheless the appellants were guilty of deliberate suppression on their part which resulted in evasion of duty to the tune of Rs. 3.43,89,568.49. Accordingly he imposed a penalty of Rs. 1 crore on the appellants under Rule 173 -Q(1) of Central Excise Rules.

(2.) SHRI V. Sridharan, Ld. Adv. appearing on behalf of the appellants submitted that he is not disputing the fact that the battery manufactured by the appellants was not metal jacketed battery and as such they were not entitled to the Notification No. 94/76. However he submits that the appellants filed a classification list effective from 29.7.1977 declaring their product as "electric dried battery, metal jacketed battery, type 955M". In the said classification list they claimed the benefit of Notification No. 94/76 dated 16.3.1976. In the remarks column the appellants wrote as "the jacket of this battery is made of aluminium foil. A sample battery is sent herewith". He submitted that Inspector of Central Excise conducted necessary verification and endorsed the classification list as "checked the contents". Further endorsement was made by the Inspector as under: -

(3.) HE also argued that having filed the classification list under the provisions of Rule 173B, declaring all the relevant information, they cannot be held guilty of having given incorrect information. Going further and relying upon the decision of Madhya Pradesh High Court in the case of Universal Cables Ltd. v. Union of India and Ors. reported in, 1977 ELT (J 92), he argued that even if the information given in classification list is found to be incorrect, penal provisions cannot be invoked against the appellants inasmuch as the authorities were having power, while approving the classification list to modify the same after making the necessary enquiries. In support of these above submissions Ld. Adv. relied upon the following decisions: -