Judgment:
1. Two issue are involved in the present case. (1) Whether sacks made out of HDPE woven fabrics covered by kraft paper with LDPE as binding material is classifiable under Heading 48 as claimed by the assessees or under 59.09 as per Department. (2) Whether non-declaration of intermediate products in the classification list is to be considered as suppression of facts to invoke larger period.
2. Shri T. Vishwanathan, learned Counsel appearing for the appellants submitted that issue with reference to the classification of sacks made out of HDPE woven fabrics is to be decided in accordance with the ruling given by the Madhya Pradesh High Court in the case of Raj Pack Well Ltd., reported in 1990 (50) E.L.T. 201 (M.P.). He submitted that in view of this the Tribunal has been consistently remanding the matter to decide the issue of classification of product and allowed the party to claim the benefit of the relevant notification. As regards limitation, he submitted that previous classification was filed in which there was an indication of emergence of intermediate products. In this context he drew our attention to the relevant classification list which was duly approved in which specifically emergence of intermediate product was shown. He stated that since there was no change in the description and since it was not dutiable as it was captively consumed and as such has not been shown in the present classification list.
Nevertheless, it was within the knowledge of the department about the emergence of the intermediate product since previous classification was duly approved and assessed by the department. In this context, he referred to the decision of the Tribunal in the case of Detiners P.Ltd., in Appeal No. 2471/84-B1 as per Order No. 370/88-B1 certified on 1-9-1988. It was observed therein that in the similar circumstances, there was no suppression of facts to invoke larger period and held that it is expected of Central Excise Authorities to compare the classification lists of the earlier years with the new classification lists filed and if there was a discrepancy, the same should and would have been noted.
3. Arguing for the Revenue, Shri Sanjeev Srivastava, learned D.R.submitted that issue with reference to the classification may be decided as perruling given by the Madhya Pradesh High Court in the case of Raj Pack Well Ltd., but as regards limitation he justified the findings of the Collector and submitted that there was no mention of intermediate product in the relevant classification list and the department was justified in invoking the larger period.
4. We have carefully considered the submissions made by both the sides.
On merit the matter will have to go back in view of the decision of Madhya Pradesh High Court and as per consistent view of the Tribunal.
As regards limitation, we find that there is some force in the arguments advanced on behalf of the appellants. Since there was a clear indication of the intermediate product in the previous price lists filed by the party and the same was approved, it cannot be said that there was suppression of facts for non-mentioning of intermediate product in the relevant classification list. It was observed in the case of Detiners P. Ltd., referred to above that it is expected of Central Excise authorities to compare the classification lists of the earlier years with the - new classification lists filed and if there was a discrepancy, the same should and would have been noted, and in view of this matter, it was held that the failure on the part of the appellant to declare the scrap in the subsequent classification lists cannot be held to be with the intent to evade payment of duty.
Following the ratio of the aforesaid decision, we hold that department was not justified in invoking the larger period. Accordingly, the demand, if any, for the period of six months may be worked out by the concerned authority and to decide the issue on merit for that period only.