Moheb Ali M., Member (T) - (1.)THESE applications for waiver of pre deposit of duty and penalties and stay of operation of the order arose out of the order of the Commissioner of Central Excise. In the impugned order the Commissioner demanded duty of central excise for Rs. 7,22,24,202/- under the provision of Section 11A(2) of Central Excise Act, imposed an equal amount of penalty under Section 11AC read with Rule 173Q, demanded interest under Section 11AB and imposed a penalty of Rs. 1 lakhs on the Deputy General Manager and Rs. 50,000/- on the Asst. Manager Excise of the appellant company under Rule 209A.
(2.)The issued relates to applicability of the benefit of notification no. 4/97 to the appellants' goods i.e. shoddy blankets manufactured out of shoddy woollen yarn. The Department contends that the above said notification does not cover blankets made out of shoddy yarn. The entry under the said notification exempts "blankets of wool from payment of duty, the value of which does not exceed Rs. 100/- per sq. mtr." It is not disputed that the goods under question are made out of shoddy woollen yarn. The issue before the Commissioner was whether such blankets are covered under the entry "blankets of wool". The period under dispute is June 98 to March 2003. The show cause notice was issued invoking larger period of limitation.
The ld. Advocate for the applicant argued that both on classification and on limitation the applicants have a strong prima facie case in their favour. It is his contention that the entry in notification 4/97 covers all blankets of wool whether they are manufactured out of virgin wool or shoddy wool. A shoddy wool blanket consists predominantly of wool and therefore should be considered as a woollen blanket attracting nil rate of duty. On the issue of limitation the ld. Advocate argued that the larger period of limitation cannot be invoked in their case as the appellant was filing declarations under Rule 173B from time to time indicating that shoddy wool blankets fall under a particular heading of the tariff and have been claiming the benefit of notification 4/97. There is no misdeclaration on their part.

(3.)THE ld Jt. CDR argued that a part of the demand for duty is covered under normal period of limitation. He also contended that shoddy wool blanket which consists partly of materials which are not woollen and therefore are not covered under the entry "blanket of wool". He produced several print outs from the appellant's web site to indicate that the appellant himself is aware that a blanket made out of shoddy wool is different from a blanket of wool. He argued that the definition of wool given in the chapter notes indicates that wool means virgin wool. In the present case the blankets consists of shoddy wool. THEre is a deliberate attempt on the part of the appellants to claim the benefit of notification by suppressing the fact that the blankets in question were made out of shoddy wool.