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CASE NO.: Appeal (civil)  2516 of 2002

PETITIONER: Commissioner of Central Excise, Mumbai

RESPONDENT: Lajya Dyeing & Bleaching Works

DATE OF JUDGMENT: 19/02/2008

BENCH: ASHOK BHAN & J.M.PANCHAL

JUDGMENT: JUDGMENT

       O R D E R CIVIL APPEAL NO.2516 OF 2002

       Respondent-assessee, hereinafter referred to as the ’assessee’, was a job worker  and was engaged in the processing of fabrics falling under Chapter heading 54 &  55 of the First Schedule to the Central Excise Tariff Act, 1985 (for short ’the  tariff Act’).  Assessee had accepted the declaration filed by the merchant  manufacturers who was supplying fabrics to the assessee and gave an undertaking  that it would comply with all the requirements and discharge all the liabilities  under the Central Excise Act, 1944 (for short ’the Act’).          As per notification No.254/87 as amended by Notification No.57/89 dated  1.3.1989, benefit of concessional rate of duty is available to a man made fabrics  containing polyster below seventy percent.  Assessee filed classification lists  declaring the man made fabrics containing polyster below 70%.  The said  classification  lists  were  approved  by  the  Assistant  

C.A.No.2516/02 .... (contd.) - 2 - Collector, Central Excise believing that the statement of the assessee given in the  classification lists was true and correct.         Samples were collected from the assessee-company and they were got  chemically tested which indicated that   they were having polyster above 70%  and thus would attract higher rate of duty and the assessee company had mis- declared the contents of the fabrics at the time of filing the classification lists with  deliberate intention to evade payment of excise duty.          Consequently, a show cause notice dated 4.3.1993 invoking the extended period  of limitation under Section 11A was issued to the assessee for the period  04.03.1989 to 16.01.1990 demanding differential duty of Rs.14,80,269.25 and also  asking them as to why a penalty should not be imposed under the Central Excise  Rules, 1944.         The assessee had replied to the show cause notice vide its letter dated 7.9.1993  stating that the declarations given by merchants were relied upon and submitted  to the department as prescribed by Notification No.305/77 and that the charge of  mis-declaration was not tenable and therefore the demand was time barred.         The adjudicating authority held that "it is presumed  that  assessee  is  also  a   party  to the mis-

C.A.No.2516/02 .... (contd.) - 3 - declaration in respect of the composition of the fabrics" and confirmed the  demand of Rs.14,80,269.75 on the assessee and imposed a penalty of Rs.1 lakh on  the assessee.  He also imposed a penalty of Rs.5,000/- each on the merchant  manufacturers.  Appeal filed by the assessee before the Commissioner(Appeal)  was rejected.         In further appeal to the Tribunal, the Tribunal, relying upon an earlier decision

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of the Tribunal in the case of Paras Prints Pvt. Ltd. vs. Commissioner of Central  Excise, Surat reported in 2000 (120) ELT 662 (Tribunal), held that in the absence  of any allegation in the notice or finding of the Commissioner that the appellant  knew or deliberately  failed to declare the correct cost of the grey fabrics and also  there being no legal requirement for the processors to verify the correctness of  the declaration furnished by the owners, extended period of limitation is not  applicable.          The finding recorded by the Tribunal is a finding of fact which does not call for  any interference.         The Appeal is dismissed.  No costs.