Customs, Excise and Gold Tribunal - Delhi
A.R. Plastics P. Ltd. vs Commissioner Of Central Excise on 3 June, 2004
Equivalent citations: 2004(171)ELT413(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. The above captioned appeals have been directed against the impugned order-in-appeal dated 1-8-2003 vide which the Commissioner (Appeals) has affirmed the order-in-original of the Additional Commissioner who confirmed the duty demand and imposed penalties on the appellants.
2. The learned Counsel has contended that the duty demand could not be confirmed as the same is time barred. Similarly the penalty according to the Counsel also could not be confirmed on the appellants. The impugned order deserves to be set aside. On the other hand, the learned JDR has reiterated the correctness of the impugned order.
3. I have heard both the sides and gone through the record. The perusal of the file shows that the factory premises of the appellants who are engaged in the manufacture of HDPE/PP strips, and woven bags, etc. was visited by the officers of the Central Excise Department on 2-8-2000 and raw material involving excise duty of Rs. 2,04,830/- and Rs. 61,424/- equal to the Cenvat credit, was found short. Shri Naresh Goyal, Director of the appellant company did not contest the shortage and the company debited the duty amount in their RG 23A Part II.
4. On completion of the investigation as is evident from the record, show cause notice dated 20-7-2001 was initially issued wherein only penalty was proposed to be imposed on the appellants under Rule 173Q read with Section 11AC of the Act on account of the shortage of the raw material. No duty demand was raised in that show cause notice. The duty demand was raised for the first time through a corrigendum which was issued on 10-9-2001. Therefore, the duty demand can be said to had been raised from the appellant for the first time when this corrigendum was issued. But by that date, the demand had already become time barred. The argument of the learned DR that duty was voluntarily debited in the statutory records by the appellants, no demand for payment of the same was required to be raised, and as such the demand raised through the corrigendum cannot be said to be time barred, cannot be accepted, being wholly misconceived. The issue of show cause notice under Section 11A for the recovery of the demand pertaining to duty/credit is mandatory and even in a case of voluntary deposit of the duty during the investigation proceedings, the notice under Section 11A has to be issued to the assessee for appropriation of that amount. In this context reference may be made to the ratio of law laid down in Veera Spinning Mills (P) Ltd. v. Commissioner of Central Excise, Coimbatore - 2001 (131) E.L.T. 437 wherein it has been so ruled, after making reference to a Board's Circular No. 290/6/97-CX., dated 20-1-97. The corrigendum issued for the duty demand, as observed above, is time barred as it was issued after the expiry of the statutory period prescribed under Section 11A. Therefore, the duty demand being time barred, could not be confirmed against the appellants. The impugned order in this regard cannot be sustained and deserves to be set aside.
5. Since the recovery of duty had become time barred against the appellants, the imposition of penalty on them under Rule 173Q also cannot be sustained legally.
6. Consequently, the impugned order is set -aside. The appeals of the appellants are accepted with consequential relief, if any permissible under the law.