Customs, Excise and Gold Tribunal - Delhi
Balaji Vegetables Products Pvt. Ltd. vs Collector Of C. Ex. on 18 November, 1998
Equivalent citations: 1999(108)ELT802(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. In this appeal filed by M/s. Balaji Vegetables Products Pvt. Ltd., the main issue for our consideration is whether the demand made vide addendum to the adjudication order dated 31-12-1988 was sustainable. Shri Vinay Garg, learned Advocate had pleaded before us that the adjudication order dated 31-12-1988 was in persuance of the remand proceedings arising out of the two orders in appeal (1) dated 19-2-1987 and the other dated 24-7-1987 and that the period involved in those proceedings was prior to January, 1985. The period involved in the present proceedings is from January, 1985 to January, 1988 for which the learned Advocate pleaded that no show cause notice was issued. The demand was confirmed without any show cause notice vide addendum to the adjudication order which related to the earlier period. He pleaded that the order in appeal which is impugned in these proceedings is not sustainable as the principles of natural justice had not been followed in raising the demand against the appellants.
2. In reply Shri K. Shiv Kumar, learned JDR stated that the appellants under their communications dated 21-2-1987 and 23-9-1987 had prayed for applying the decisions with regard to the charges and freight for the period prior to January, 1985, the subsequent period also. He submitted that it was on the understanding of such communications from the appellants that the show cause notice was not issued and the principles adopted for raising the demand for the earlier period were applied for the demand during the period January, 1985 to January, 1986 also.
3. We-have carefully considered the matter. We find that the Assistant Collector, Central Excise Division Sitapur in remand proceedings under his order in original Nos. 15 to 17/Demand/88, dated 31-12-1988 had confirmed the demand for the period January, 1983 to December, 1983 and 21-5-1984 to 31-8-1984 and September, 1984 to December, 1984. The demand for the period subsequent to December, 1984 was not a issue before him. After the above adjudication order was made on 31-12-1988 (issued 9-1-1989) the addendum issued on 7-3-1S89, which read as under :-
In the-last para of the said adjudication order after"...in cash within 10 days from the date of receipt of this order", the following para stands added.
For continuous liability of duty on Distribution charges from Jan. 85 to Jan. 86 the duty was demanded on RT 12s for Rs. 3,52,839.34, the details of which are given in Annexure 'A'. Show cause notices in this case were not issued for continuous liability as per factory's Letter No. EVP/22/87/2060-61, dated 21-2-1987 and Letter No. EVP/22/877742-43, dated 23-9-1987 wherein they have requested to apply the Collector (Appeals)'s order regarding demanding duty on Distribution charges excluding freight for the year 1985. Hence, I also demand duty for Rs. 3,52,839.34 on the total distribution charges of Rs. 39,28,728.00 at 5% and 10% Adv. respectively. However, I allow them the benefit of excluding freight charges from the above amount. They should furnish the said particulars to the Supdt. Central Excise Range II/Inspector Central Excise I/ M/s. Balaji Vegetable Products (P) Ltd. Sitapur Sector within 7 days to work out the actual amount recoverable from them. This amount should be paid within 10 days from the date of receipt of this addendum.
4. The Collector, Central Excise, Sitapur while passing the above order dated 7-3-1989 had referred to the communications from the appellants dated 21-2-1987 and 23-9-1989 and had stated that as the liability was continuous; the show cause notices were not been issued as per party's above letters. We have gone through these letter's which are placed at page 12 and page 17 of the paper, book. In these communications the party although admitted the liability and agreed to pay the difference, to be worked out that by itself will not absolve the responsibility of the revenue to proceed in terms of Section 11A of the Act and in due process of law. The reason to issue show cause notice has been now well settled by the judgment of the Supreme Court rendered in the case of Kosan Metal Products Ltd. reported in 1988 (38) E.L.T. 573 (S.C.). As can be seen from the facts of this case, the original show cause notice which contested is dated 12-2-1985. Admittedly it does not pertain to the period in question. In the direction given by the Commissioner in his order dated 19-2-1987 and 24-7-1987 the department was to work out the liability pertaining to the show cause notice dated 12-2-1985 and 20-11-1986. Both the show cause notices do not pertain to the demands in question. Although the party on their own addressed a letter dated 23-9-1987 pertaining to quantification of demand pertaining to the earlier period yet in the in penultimate paragraph-addressed about payments for subsequent period also. That admission will not absolve the responsibility of the revenue to raise demands. It is very clear from the proceedings, that the department has not raised any demand for the period January, 1985 to January, 1986 for a sum of Rs. 3,52,839.34. Even the Asst. Collector's letter demanding this amount does not show that the assessment have been kept provisional and this claim is as a result of finalisation of the assessments. It is clear that the department were aware of the dispute pertaining to this demand. Therefore, it cannot be said at this point, that the Assistant Collector's letter demanding this amount can be treated as a show cause notice, for recovery by invoking larger period. Therefore, viewing from all points, it is clear that the department had not taken steps to safeguard the revenue by issuing a show cause notice for recovering the liabilities. After a long lapse of time, if the party in remand proceedings comes up with a reply to pay the amounts for subsequent periods and does not upon it, then the same cannot be pressed for recovery by issuing a letter. Therefore, for period Jan. 1985 to Jan. 1986 department has not taken steps to issue show cause notice, nor to keep the assessment provisional. In view of the matter, the Commissioner (Appeals) finding that the appellant had admitted the liability to pay is not sufficient to confirm the demands without issue of a show cause notice and hence the order is not sustainable. We set aside the impugned order and allow the appeal.