Customs, Excise and Gold Tribunal - Delhi
Mahendra Radio And Tv (P) Limited vs Collector Of Central Excise on 14 March, 1988
Equivalent citations: 1988(17)ECR755(TRI.-DELHI), 1988(35)ELT668(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. The facts alleged in this case are that appellants informed the Central Excise Department on 7th July, 1984 that they were suspending production of V.C.Rs. with immediate effect and that they would intimate the department whenever the production was resumed. The department alleges that on 17th October, 1984, when a surprise check was made at the Unit, it was found that during the month of September, 1984, appellants had produced 50 sets of V.C.Rs. These V.C.Rs were removed at a price lower than approved, allegedly resulting in a short levy of the order of Rs. 29,830.38 in respect of the differential value of Rs. 1,13,641/-.
2. According to the department, appellants were issued a Show Cause Notice on 27-12-1984, but they failed to submit any reply. The matter was, therefore, adjudicated by the Additional Collector of Central Excise, Meerut ex-parte.
3. We have heard Shri J.S. Aggarwal,Adv. and Ms. Renuka Mann, SDR for the department.
4. The learned Adv. submits that there was no intention whatsoever to undertake clandestine production and removal of excisable goods. It is true that appellants stopped production as per intimation to the department on 7th July, 1984. Later on, when they resumed production, they filed revised classification list and price list. Instead of according approval to the classification list and the price list, the departmental officers visited the Unit of the appellants on 17-10-1984 and booked a case against them for clearing the goods without filing the revised price list and without obtaining prior approval therefor from the proper officer. Appellants claim that they had explained to the Asstt. Collector that they had filed the classification list and the price list together with costing details by post on 17-9-1984 under Postal Certificate.
5. In these circumstances, it is claimed that the allegation that appellants cleared 50 sets of V.C.Rs without filing revised price list is baseless. It is also pointed out that since the department had not received classification list and the price list, therefore fresh copies were submitted on 30-10-1984. What is emphasized is that 50 sets of V.C.Rs were cleared on the basis of the revised price list after duly discharging the duty liability as per the revised price list.
6. The learned Adv. submits that while Rule 173C(2)(vi) of Central Excise Rules provides that prior approval of the price list by the proper officer should be obtained where the fresh price list has the effect of lowering the existing value of the goods, at the same time, as per Sub-Rule (5) of Rule 173C where there is likely to be delay in according approval, the proper officer is required to allow the goods to be cleared under Rule 9B of the Central Excise Rules, 1944 under the scheme of provisional assessment.
7. In the circumstances, it is submitted that there is no case at all for imposition of penalty and that too of such a high amount of Rs. 25,000/-.
8. Appellants have relied on the decision of the Madhya Pradesh High Court in the case of Gwalior Reyon Manufacturing (Wvg.) Co. v. Union of India and Ors. [1982 ELT 844 in which it was held that where price list was filed in form and manner prescribed under Rule 173C showing the price of the goods, though on the lower side, it cannot be said that the appellants have contravened the provisions of Rule 173C and therefore penalty was not imposable under Rule 173Q. It is urged that the ratio of the decision of the Madhy Pradesh High Court in the case of Universal Cables Ltd. v. Union of India and Ors. [1977 ELT (J-92)] was also the same.
9. Shri Aggarwal also refers to the decision in the case of Bridge & Roof Co. (I) Ltd. v. Collector of Central Excise, Calcutta [1986 (24) ELT 671 (Tribunal)] and submits that this is plainly a case where there can be no allegation of mis-declaration or clandestine removal or any intention to evade duty.
10. It is finally submitted by the learned Adv. that the second price list, lowering the prices with effect from 20th September, 1984 was finally approved and demand for duty dropped on 14th August, 1986. The learned Adv. submitted that in the circumstances, at best, there has been a technical violation of Rule, of failure to obtain prior approval of the price list but this does not justify at all the view taken of the matter by the department.
11. Responding, Ms. Renuka Mann briefly submits that She would like to reiterate the view taken by the department before the lower authority.
12. We have carefully considered the facts of the case and the submissions made before us. There are certain facts of this case which stand out rather glaringly against appellants. The first is that they intimated the department that they were suspending production from a certain date. When a surprise check was made at a later date, it was found that they were not only undertaking production but also they had taken clearances. When a Show Cause Notice was issued to the appellants, they failed to reply. They also failed to heed a reminder issued to them in this connection. In the circumstances, the matter had to be adjudicated ex-parte.
13. Now before us, there is no explanation as to why the appellants failed to reply to the Show Cause Notice or to defend themselves before the lower authority. It is claimed that appellants had taken clearances of 50 sets of V.C.Rs after submitting fresh price list. As evidence thereof, appellants have submitted copy of a letter dated the 11th September, 1984 and photostat copy of the U.P.C. This, by itself, does not constitute any conclusive evidence of prior intimation to the department.
14. When the rules require that a manufacturer, before stopping or resuming production, should give notice in writing to the Central Excise department and further requires that prior approval be obtained from the proper officer in respect of price list, an assessee cannot rest content with sending an intimation by post and take clearances even without the approval of the price list. In fact, failure to get approval of the price list should have indicated to the assessee that the postal intimation, if sent, may not have reached the department at all.
15. In the circumstances, we hold that the assessee is certainly guilty of contravention of Rules 43 as well as 173C. In this connection, appellants cannot rely on the decision of the Madhya Pradesh High Court in the case of Gwalior Rayon Manufacturing (Wvg.) Co. (supra) since it cannot be said that they discharged their obligation of submitting the price list as required under Rule 173C.
16. For the reasons stated in the preceding para, appellants cannot also fall back on the case of Bridge 6c Roof Co. (I) Limited (supra). In view of the violation of the rules, appellants have to take the consequences in terms of penalty leviable.
17. On the other hand, we cannot help taking note of the fact that whatever clearances are alleged by the department to have taken place, have been on payment of duty. The learned SDR has not contradicted the claim made from the appellant's side that the second price list, which was submitted by the appellants, and which, the department had alleged represented lower prices than those already approved, has since been approved by the department and demand for differential duty dropped. In the circumstances, it cannot be said that there has been any evasion of duty.
18. Shri Aggarwal has submitted that this is a case at best of technical violation of rules. We rest content by saying that this is a case where it is not shown that there has been any attempt to evade duty.
19. There can be no faulting the finding of the learned Additional Collector, however, that the assessee was working under the Self Removal Procedure whereunder a trust was reposed that they would abide by the Central Excise law and procedure. Failure strictly to comply with the rules, therefore, cannot be dismissed as mere technical violation of rules.
20. Considering all the facts and circumstances of the case, we, however, reduce the penalty from Rs. 25,000/- to Rs. 5,000/- (Rupees five thousand only).
Appeal partly allowed.