Judgment:
1. In this appeal filed by M/s. Ludhiana District Cooperative Milk Producers Union Ltd., the matter relates to the classification and dutiability of the skimmed milk powder, floor or chambers sweepings.
The Addl. Collector, Central Excise, Chandigarh in his order dated 4-12-1990 had held that the floor sweepings were nothing but skimmed milk powder as they had been put up in containers of 25 Kgs. bags and sold. They were classified under sub-heading 0401.13 of the Central Excise Tariff. He had demanded duty of Rs. 20,277/- and imposed a penalty of Rs. 2,000/- 2. We have heard Shri K.K. Anand, Advocate for the appellants and Shri R.S. Sangia, JDR for the respondent Revenue.
3. There is no dispute on the facts of the case that the appellants were engaged among others in the manufacture of skimmed milk powder.
During the course of the manufacture of the skimmed milk powder, certain sweepings arise. Sweepings are collected and sold as cattle food or for other purposes other than for human consumption. Skimmed milk powder as a dairy product, is edible and had to be manufactured in accordance with the rules and regulations relating to Food Adulteration Act. They had to meet the specific requirements as laid down in the law for human consumption. Floor sweepings or chamber sweepings could not be sold as skimmed milk powder.
4. Under Heading No. 4.01, milk and cream concentrated or containing added sugar or other constituent matter was classifiable. Various products falling under Heading No. 4.01 in relation to the manufacture of which any process was ordinarily carried out with the aid of power are classifiable under sub-heading 40.11 (sic), .12, .13, .14 and .19.
The skimmed milk powder specially prepared for feeding infant was classifiable under sub-heading 40.12 and the Tariff Rate itself was nil. The skimmed milk powder other than the powder specially prepared for feeding infants put up in unit containers and ordinarily intended for sale was classifiable under sub-heading 40.13. From the Scheme in the Tariff, it is seen that this sub-heading is particularly for the skimmed milk powder for the general use.
5. As the Adjudicating Authority had already observed that the goods involved were floor sweepings or chamber sweepings, we do not consider that their classification under sub-heading 401.13 (sic) as related to the standard skimmed milk powder was correct.
6. The ld. Counsel had also assailed the order on the ground of limitation. He referred to the clarification issued by the jurisdictional Supdt. of Central Excise that the floor sweepings were not excisable. This letter from the Suptd., Central Excise is at Page 16 of the paper book as annexure "E" to the appeal. In this letter dated 19-11-1979 it had been clarified that the floor sweepings were exempt from duty under old Central Excise Tariff. Subsequently on 3-5-1988, certain information was asked by the Department and the communication addressed to the appellants is at Page 15 of the paper book as Annexure "D". We find that the duty had been demanded for the period 1984-85 to 1987-88. While there is an allegation of suppression, we do not find that any grounds had been adduced to justify the invokation of the extended period of limitation. In the facts and circumstances of the case, we consider that there was no justification for invoking the extended period of limitation. We have already referred to above the nature of the product and the coverage under Heading No. 4.01.
7. Taking all the relevant facts into account we do not agree with the view taken by the Addl. Collector, Central Excise, Chandigarh. As a result, the appeal is allowed.