Mr. S. B. Wad, J. ( 1 ) IN this writ petition the petitioners are challengingthe order passed by the Collector, Customs and Central Excise, New Delhi, dated20. 8. 83. The Collector had held that the Srigopal Unit of the petitioner at. Yamuna Nagar was guilty of disregarding the provisions Rule 173 (F) of thecentral Excise Rules, 1944, and that the petitioners were liable to pay dutyamounting to Rs. 10,05,1899. 00 and Rs. 15,377-17 under Rule 10 and the penalty of Rs. 5,00,000. 00. ( 2 ) THE petitioner company manufactures white printing paper. Duringthe relevant period white printing paper was covered by item No. 17 of the1st Schedule to the Central Excise and Salt Act, 1944 and was liable to pay advalorem duty @ 25%. By notification No. 68/76-CE and 69/76-CE dated 16. 3. 76a concessional rate of duty @ 5. 5% ad valorem was made available to themanufactures of white paper for the quantities of paper supplied by them tothe Director General of Supplies and Disposal and supplied to other agenciesfor educational purposes. The said notification reads:-Notification No. 68/76-Central Excise "in exercise of the powers conferred by Sub-rule (1) of Rule 8 of thecentral Excise Rules, 1955, the Central Government hereby exempts goods ofthe description specified in cloumn (2) of the Table here to annexed and fallingunder Item No. 17 of the First Schedule to the Central Excise and Salt Act,1944 (I of 1944), from so much of the duty excise leviable thereon as is inexcess of the duty specified, and subject to the conditions laid down, in thecorresponding entries in columns (3) and (4), respectively, the said table: ( 3 ) AT the relevant time the retention price of white paper was fixedat Rs. 2750. 00 per metric tonne under the paper control order. By a separateorder the maximum price of the exercise books was also fixed. Under thescheme a quota was allotted to paper manufacturing concerns for supply ofpaper for educational purposes. The object of the duty concession under thesaid notifications was to ensure that the students get the exercise books at areasonable controlled price. Paper supplied through DOSandd was also madeentitled to the duty concession. ( 4 ) DURING the relevant- period the petitioner supplied certain quantities of paper to DGSandd aftercutting it. So also the petitioner supplied thepaper for educational purposes after ruling the same. Paper supplied through DOSandd was also madeentitled to the duty concession. ( 4 ) DURING the relevant- period the petitioner supplied certain quantities of paper to DGSandd aftercutting it. So also the petitioner supplied thepaper for educational purposes after ruling the same. Both the cutting andruling operations were done in the same factory premises of the petitioner. Thepetitioner claimed concessional duty at 5. 5% ad valorem on the fixed price ofrs. 2,750. 00 per metric tonne on the paper supplied for educational purposesand through DGSandd. The ruled paper was supplied by the petitioner to itsown agency M/s. Capital Stationery Works. The Collector came to the conclusion that the notifications in question entitle the supplies of white paper to aconcessional duty rate only on such paper whose actual whole sale price doesnot exceed Rs. 2, 750. 00per metric tonne. The Collector also came to the conclusion that the petitioner had made mis-statements and had suppressed vitalfacts thereby subjecting themselves to the penalty under the Rules. ( 5 ) THE petitioners submit that on the correct interpretation of thenotifications in question, the petitioners were entitled to the concessional rateof duty on the white paper supplied by them to the said institution @ Rs. 2,750. 00 per metric tonne. But, apart from this, there are two other submissionsmade by the petitioners. The petitioners submit that under Rule 10 (1) of thecentral Excise Rules applicable at the relevant time the revenue can claimduty on the goods which have escaped duty only for six months prior to thedate of the show cause notice to the assesses. A show cause notice in relationto the ruled paper was issued on 6-4-78. Therefore, the liability to pay theduty prior to 5-10-77 is barred by limitation. So also the notice- in regard tothe goods supplied to DGSandd was issued on 2. 9. 78 and, therefore, there wasno liability to pay duty prior to 3. 3. 78. The answer of the respondents isthat because of the mis-statements and suppression of facts by the petitionersthe period for recovery of the tax liability is enhanced to five years from thedate of the discovery of such supperssion/mis-statements under proviso torule 10 (1) of the Central Excise Rules. The petitioners have-denied theallegations in regard to mis-statement and supperssion. 3. 78. The answer of the respondents isthat because of the mis-statements and suppression of facts by the petitionersthe period for recovery of the tax liability is enhanced to five years from thedate of the discovery of such supperssion/mis-statements under proviso torule 10 (1) of the Central Excise Rules. The petitioners have-denied theallegations in regard to mis-statement and supperssion. Another submissionof the petitioners is that since there was no mis-statement or suppression ontheir part, they were not liable to any penalty under Rule 173, as imposed bythe Collector. For appreciating these submissions of the parties it is necessaryto know Rule 10 (1) of the Central Excise Rules, 1944 and Rule 173-F also ofthe said Rules :-Rule 9:power and manner of payment of duty- (1) No excisable goods shallbe removed from any place where they are produced, cured or manufacturedor any premises appurtenant thereto, which may be specified by the Collectorin this behalf whether for consumption export, or manufacture of any othercommodity in or outside such place, until the excise duty leviable thereon hasbeen paid at such place and in such manner as is prescribed in these Rules oras the Collector may require and except on presentation of an application inthe proper form and on obtaining the permission of the proper officer on theform, EXPLANATION:- For the purposes of this rule, excisable goods produced,cured or manufactured in any place and consumed or utilised- (i) as such or after subjection to any process or processes; or (ii) for the manufacture of any other commodity. whether in a continuous process or otherwise, in such place or any premisesappurtenant thereto, specified by the Collector under sub-rule (1), shall bedeemed to have been removed from such place or premises immediately beforesuch consumption or utilisation. Rule 10 (1):where any duty has not been levied or paid or has been short leviedor erroneously refunded or any duty assessed has not been paid in full, theproper officer may, within six. Rule 10 (1):where any duty has not been levied or paid or has been short leviedor erroneously refunded or any duty assessed has not been paid in full, theproper officer may, within six. months from the relevant date, serve notice onthe person chargeable with the duty which has not been levied or paid, orwhich has been short levied, or to whom the refund has erroneously beenmade, or which has not been paid in full, requiring him to show cause why heshould not pay the amount specified in the notice: PROVIDED that- (a) where any duty has not been levied or paid, has been short-levied or has not been paid in full, by reason of fraud, collusionor any wilful mis-statement or suppression of facts by suchperson or his agent, or (b) where any person or has agent, contravenes any of theprovisions of these rules with intent to evade payment of dutyand has not paid the duty in full, or (c) where any duty has been erroneously refunded by reason ofcollusion or any wilful mis-statement or suppression of facts bysuch person or his agent, the provisions of this Sub-section shall,in any of the cases referred to above, have effect as if for thewords "six months", the words "five years" were substituted. Rule 173-F:assessee to determine the duty due on the goods and to remove themon payment thereof.-Where the assessee has complied with the provisionsof rules 173-B, 173-D and, where applicable, 173-C, (or 173-CC) he shall himself determine his liability for the duty due on the excisable goods intended tobe removed and shall not, except as otherwise expressly provided in theserules, remove such goods unless he has paid the duty so determined. ( 6 ) BEFORE going to the question of interpretation of the impugnednotifications, it is easier to dispose of the submission of the petitioners inregard to limitation of the Revenue s claim and also on the question of theirliability to pay penalty. It is clear from the evidence that the petitioners havefiled the classification list, the proper return and the price list and invoices. The price list bears the endorsement "approved" from the Excise Department. In the price list and invoices, in addition to the price of Rs. 2,750. 00 per metrictonne, the cutting and ruling charges were expressly stated and the concessionalduty was claimed on the said amount. The price list bears the endorsement "approved" from the Excise Department. In the price list and invoices, in addition to the price of Rs. 2,750. 00 per metrictonne, the cutting and ruling charges were expressly stated and the concessionalduty was claimed on the said amount. In the face of this documentaryevidence supplied by the petitioners themselves, it is difficult to understand as tohow the Revenue has concluded that there was mis-statement or suppressionof facts. The alleged mis-statement or suppression was not mentioned in theshow cause notices. The finding of the Revenue, therefone, that the petitionershave made mis-statement and suppressed the facts is without any evidenceand therefore, perverse 11988 (55) ELT 605] and [1989 (44) ELT 552]. Even ifit is assumed that the petitioners interpretation of the notification is wrong andthat they cannot claim duty concession of the paper cut and ruled, can it inlaw be said that they have made any mis-statement or suppressed any material. Mis-statements and suppressions relate to the information on facts and notinterpretation of notifications in the realm of law. The Revenue cannot on itsown interpretation of the notifications hold the petitioners guilty of mis-state-mentor suppression (1985 (21) ELT 299 ). This is the decision of the CEGAT. Having gone through the same we are of the opinion that it lays down asound principle of law and, therefore, adopt the same. ( 7 ) SINCE we are clearly of the view that there is no mis-statementor suppression by the petitioners, the relevant provision for limitation is sixmonths under Rule 10 (1) of the Act and the period is not extended to fiveyears under the proviso. The finding of the Collector in this regard is, therefore, set aside. We hold that the petitioners are not liable to pay duty inregard to the. first show cause notice for the period prior to 5. 10. 1977 and forthe period prior to 3. 3. 78 in regard to the second show cause notice. Similarly,since we have held that there is no mis-statement or suppression on the partof the petitiones they are not liable to pay any penalty under Rule 173 of theact. We, therefore, quash the impugned order in regard to the petitioners taxliability for the periods indicated above and the penalty imposed on the petitioners by the Collector, Central Excise. . Similarly,since we have held that there is no mis-statement or suppression on the partof the petitiones they are not liable to pay any penalty under Rule 173 of theact. We, therefore, quash the impugned order in regard to the petitioners taxliability for the periods indicated above and the penalty imposed on the petitioners by the Collector, Central Excise. . ( 8 ) THAT leaves us to the first submission of the petitioners in regardto the correct interpretation of the impugned notifications. The submission ofthe petitioners on this question is that when he filed the writ petition he hadclaimed the refund of the duty paid @ 25% ad valorem on the white papersupplied to DGSandd and to the other agency (for educational purposes),because the said manufacture was a captive manufacture and, therefore, didnot attract any duty. But after the filing of the writ petition Section 9 of theact has been amended by the Amending Act of 1982, imposing the conceptof deemed removal for the purpose of excise duty. He cannot, thereforeclaim any refund on this ground. The Counsel for the petitioner further submits that by virtue of the Amending Act of 1982 the removal of white papermanufacured is deemed to have been completed at the initial stage itself. Theincidence of duty falls at. that stage itself. At that stage the price was Rs. 2,750. 00 per metric tonne and it was on that price that the white paper was, infact, supplied to DOSandd and for educational purposes. ( 9 ) COUNSEL for the petitioner further submits that they had duly filedthe classification list showing the white paper supplied by them as fallingunder tarrif item No. 17. They had also filed a proforma for determinationof the value under Section 4 of the Central excise and Salt Act, 1944, showingrs. 2. 75 per Kg. as the price. This was approved by the Assistant Collectorof Central Excise and Customs. Since the invoice price was higher than Rs. 2,750. 00 per MT the break-up of that price in the form of the invoice and pricelist was submitted. In the said price list the cutting and ruling charges wereseparately shown. The price list was also approved by the Assistant Collector. According to the petitioners, the price list enables the Department to knowthat the cost of the white paper supplied to the DGSandd and educationalinstitutions was Rs. 2,750. 00 per MT. only. In the said price list the cutting and ruling charges wereseparately shown. The price list was also approved by the Assistant Collector. According to the petitioners, the price list enables the Department to knowthat the cost of the white paper supplied to the DGSandd and educationalinstitutions was Rs. 2,750. 00 per MT. only. The petitioner, thus, claims dutyconcession on the white paper supplied to the DGSandd and for educationalpurposes only @ Rs. 2,750. 00 per metric tonne. The Counsel has referred to theobservations of the Collector in the impugned order, viz. that for the ex-factorysale at the factory gate the paper was cut to sizes and was ruled and that theruling and cutting charges were incurred as manufacturing cost prior tothe clearance of the goods. The Counsel submits that these assumptions arewrong. The Counsel also submits that the Collector was wrong in holdingthat because the invoice price is higher than Rs. 2,750. 00 per metric tonne thepetitioner was not entitled to duty concession at all. ( 10 ) THERE is great deal of merit in the submissions of the counsel forthe petitioner. In the prescribed proforma the petitioner has shown the priceof the white paper for the purposes of Section 4 of the Act at Rs. 2. 57 perkg" i. e. Rs. 2,750. 00 per metric tonne. The same was approved by the Department. In the invoice also the same was shown as the price of the white paper. Cutting and ruling charges were shown separately. When the petitioner isnot claiming the benefit of the entire invoice amount for the purposes of dutyconcession and restricting it only to the amount of Rs. 2,750. 00 per metrictonne, one fails to understand how the Department could take a contraryview. It appears that the learned Collector made certain assumptions andrecorded his findings on the law prior to the amendment of Section 9 in 1982. It may be that the petitioner was also thinking in terms of the provisions ofearlier law and had, therefore, shown cutting and printing charges. Underthe old law, perhaps, the petitioner could have secured the exemption on theentire amount being a captive manufacture. We have no hesitation in holdingthat the reasoning of the Collector is erroneous, particularly, in the light ofthe change in law. Underthe old law, perhaps, the petitioner could have secured the exemption on theentire amount being a captive manufacture. We have no hesitation in holdingthat the reasoning of the Collector is erroneous, particularly, in the light ofthe change in law. The manufactured goods attract excise duty at the intialstage of manufacture itself by application of the concept of deemed removalintroduced by the Amending Act of 1982 with retrospective effect. Once thewhite paper attracts duty at that stage, subsequent processes such as cuttingand ruling would not make any difference in law. The real test for getting theduty concession is whether the petitioner could have got the duty concession ifhe had supplied white paper to the said institutions without cutting or ruling. The statutory notification of exemption does not require that the paper shouldbe cut or ruled before it is supplied to the said institutions. As a matter offact the white paper without cutting or ruling can also be supplied to the saidinstitutions. The question is whether by ruling and cutting the paper will itlose its original character as white paper? Obviously not. If without cuttingand ruling the white paper supplied to these institutions could have beeneligible for duty concession, would they lose the concession merely by cuttingand ruling the paper. It is true that the exemption notification mentions thefigure of Rs. 2,750. 00 per metric tonne as the ex-factory price. It only meansthat the manufacturer cannot get the duty concession even if his manufacturingcost is more than Rs. 2,750. 00 per metric tonne. In other words, irrespectiveofthe manufacturing cost, he would be entitled to duty concession only onthe amount of Rs. 2,750. 00 per metric tonne and not more. The object of fixingthe absolute price of Rs. 2,750. 00 per metric tonne for attracting duty concessionwas that the students should get text books and exercise books at a reasonableprice fixed under the Price Fixation Order. The Collector erroneously believedthat this object would be defeated because of the invoice price in the presentcase. Then the petitioner would not have cut or ruled the paper the samecould have been done by the manufacturers of the text books by incurringadditional costs. Therefore, in neither case the price of the exercise bookswould be higher than the prescribed price. ( 11 ) FOR the reasons stated above we hold that the petitioner was entitled to duty concession of 5. Therefore, in neither case the price of the exercise bookswould be higher than the prescribed price. ( 11 ) FOR the reasons stated above we hold that the petitioner was entitled to duty concession of 5. 5/o duty on the entire stock supplied by them todgsandd and educational institutions. However, the duty concession would beavailable only on the sum of Rs. 2,750. 00 per metric tonne. The show causenotices and the impugned order of the Collector are, therefore, quashed andset aside. The petition is allowed with costs. Rule is made absolute.