Customs, Excise and Gold Tribunal - Delhi
New Era Welding Works vs Cce on 23 December, 1997
Equivalent citations: 1998(75)ECR117(TRI.-DELHI)
ORDER
U.L. Bhat, J. (President)
1. Appellant, engaged in the manufacture of storage tanks and accessories without possessing a central excise licence, cleared the goods in 1985-86 and 1986-87 without payment of duty and without following the central excise procedures. Two tanks in a finished state found in the factory were seized on 16.12.1986. Show cause notice dated 9.6.1987 was issued proposing penalty under Rule 173Q of the Central Excise Rules, 1944, confiscation and demand of duty of Rs. 1,850.00 in respect of the two tanks. The notice was resisted by the appellant, contending, inter alia, that the value of clearances in respect of each of the years was well below Rs. 15 lakhs, the limit for exemption under the SSI Notification and, therefore, there was no obligation to obtain licence, follow central excise procedures or pay duty. Overruling these contentions, the Senior Superintendent of Central Excise confirmed the proposals in the notice and ordered confiscation of the two tanks lying rejected on payment of fine of Rs. 1000.00. This order having been confirmed by the Collector (Appeals), is challenged now.
2. There was a second show cause notice dated 13.10.1987 proposing demand of duty of Rs. 39,563.00 and imposition of penalty on the allegation that the value of clearances during the year 1986-87 was Rs. 18,95,630.00 and, therefore, duty was payable on the last clearances of the value of Rs. 3,95,630.00 (in excess of Rs. 15 lakhs). This show cause notice has been dropped on recomputation of the assessable value and on finding that the value of clearances during the year was below Rs. 9 lakhs.
3. We have indicated that the subject show cause notice related to the failure of the appellant to take up licence during the year 1986-87 and duty in respect of two tanks manufactured during the same year, but the finding in the proceeding initiated by the second show cause notice is that the total value of clearances was below Rs. 9 lakhs. In these circumstances, the failure to obtain central excise licence cannot lead to any penalty and no duty can be demanded on the two tanks. The confiscation was also unjustified, since no duty was payable and licence was not mandatory.
4. The impugned orders are set aside and the appeal is allowed.
Pronounced and dictated in the open court.