Customs, Excise and Gold Tribunal - Bangalore
Hind Nippon Rural Indus. Pvt. Ltd. vs Cce on 26 August, 1999
Equivalent citations: 2000(89)ECR79(TRI.-BANGALORE)
ORDER C.N.B. Nair, Member (T)
1. This appeal is directed against order-in-original No. 13/97 dated 31.10.1997 of the Commissioner of Central Excise, Bangalore. This order was passed pursuant to the order of remand passed by this Tribunal vide final order No. 379/96-D dated 31.5.1996. For understanding the true scope of the direction contained in the Tribunal's order, we read relevant portion of the order below:
The only question left for determination is as to whether larger period is invokable in the present case. The learned advocate has relied on the letter dated 17.5.1983 addressed to the Inspector. The letter has got seal of the Inspector and signature of some person. This letter has not Been adverted to in the finding. The Learned DR has expressed a doubt about its genuineness and also submits that the appellants had not informed about their activity to the department. This aspect of the matter has not been looked into by the Learned Collector and no verification about the receipt of the letter appears to have been done by the department. It is also not known as to whether any of the Directors who were examined by the department officials had stated about this letter and whether such a plea had been raised at earlier stage. Therefore, in the fitness of things, it is necessary that the matter is remitted back to the Commissioner for de novo consideration only on this aspect of the matter and also to consider remission of duty on exported items. The Learned Commissioner shall examine the plea of limitation as raised by the appellants before the Tribunal and also with regard to the valuation and remission of the duty after giving them due notice of hearing and decide the case de novo.
In the present order, the Commissioner has held that the extended time limit under Section 11A of the Central Excise Act, 1944 is available as the letter dated 17.5.1983 of the appellant is not found in the Central Excise record. In reaching this conclusion, he has also relied on the fact that the said letter was not mentioned by the Director of the appellant, Shri A.K. Agarwal in his statement dated 23.8.1986 and also that the letter appears to be tampered with. With regard to remission of duty on account of export of the goods, the Commissioner has held that export has not been proved with documents or bank statements; instead only a certificate of the Chartered Accountant has been filed. In view of these findings, the Commissioner has reconfirmed the duty to the extent of Rs. 16,17,190.83.
3. The appellants have submitted in the present appeal that the Commissioner's finding that the extended period for demand of duty under Section 11A is available to the Revenue is not correct and has been reached without proper appreciation of evidence. It has been submitted that the letter dated 17.5.1983 of the appellants had been received and acknowledged by the Inspector of 'C Range of the Mangalore Division and the Commissioner should have called the officer for examination during the proceedings and if necessary, allowed him to be cross-examined by the appellants. Instead of ascertaining facts through such a course, as requested by the appellants, the Commissioner has brushed aside the letter by making the aforesaid observations which are not reasonable at all. The Commissioner's observation regarding tampering with the letter is not relevant at all as the appellants had no requirement to tamper with the letter at all, if the same was a subsequently created letter sought to be introduced as evidence. Similarly, no adverse inference could be drawn from Mr. Agarwal's not mentioning this letter in his statement given about three years after the filing of the letter. The appellants have also submitted that the whole issue as to whether cutting of blocks of rocks into slabs amounted to manufacture itself was in doubt during the relevant period. They have, in particular, referred to the order-in-appeal No. 260/86H dt. 19.12.1986 issued by the Collector of Central Excise (Appeals), Madras. In this order, the Collector held in an appeal filed by M/s. Indian Granite Ltd. that (i) mere cutting and polishing of granite slabs does not amount to manufacture of any new product and (ii) the ornamental granite slabs may be classified as products of the handicrafts industry eligible for exemption as per Notification No. 76/86 dated 10.2.1986. The appellants have contended that the departmental authorities as well as the trade was under the impression during the relevant time that the appellant's activity did not amount to manufacture and, therefore, no levy of excise duty was involved. That the appellants had no intention to conceal their activity or to evade payment of duty is clear from their letter dated 17.5.1983. They were also an EOU working under customs procedure and were expected to export about 98% of their produce. In that context also the Revenue authorities were aware of their activities. In these circumstances, the appellants strongly contend that the charge of suppression of facts with intent to evade payment of Central Excise duty cannot stand against the appellants and the demand is required to be limited to the normal period for recovery of duty not paid as contained in the main part of Section 11A.
4. With regard to grant of remission of duty in respect of exported goods, the appellants have submitted that they could not have produced documentary evidence as the documents relating to exports were among the documents seized and kept in their custody by the Central Excise authorities. It was in that situation that the appellants produced a certificate from their Chartered Accountant. They have, therefore, submitted that they may be given access to the seized documents which are available with the departmental authorities, so that they could substantiate their claim to export with the help of those documents.
5. We have considered the submissions. We find that the appellants had made a strong case in respect of non-applicability of extended period for demand. The fact that there was common understanding that the appellants' activities did not amount to manufacture is evidenced by the order of the Commissioner (Appeals) referred to earlier. The appellants' submissions regarding their letter dated 17.5.1983 have also not been dealt with by the Commissioner properly. As full particulars about the submission of the letter were available, inasmuch as an officer of the department had acknowledged the receipt under his signature and with the stamp of the Central Excise office, the Commissioner should have made proper verification with the officer. He should also have allowed the officer to be examined/cross-examined to find out the correctness of the appellants' claim. The Commissioner was also not justified in holding that an adverse inference can be drawn from the fact that this letter was not mentioned by the Director of the company in his statement of 23.8.1986. The Director was not giving a statement with regard to specific letters or files. This statement was also after three yeas of the filing of the letter. The omission to mention the letter, therefore, cannot be taken to mean that no such letter was filed by the appellants. In the circumstances, we accept the appellants' plea regarding time limit and order that the demand be worked out for a period of six months preceding the issue of the show cause notice. This observation of ours is further fortified by the following observation of the Commissioner in paragraph 19 of the order:
On a close scrutiny of the said letter, I find that the date on the letter has been tampered with.
From this it would appear that the Commissioner had scrutinised the original letter, even though he has observed in the very next paragraph that the assessee did not file any such letter. There was no requirement for the Commissioner to scrutinise a copy of the letter to come to the conclusion that it was tampered with. If it was a subsequent creation made by the assessee, he could be expected to have made it in a fool-proof manner.
6. The remand order passed by this Tribunal with regard to granting remission of duty for the exported goods also remains not implemented in the present order. The appellants could not be expected to produce proof of export when all the relevant documents are in the custody of the departmental authorities. The proper procedure for the department would have been to release the documents to the assessees or furnish copies of the documents to them so that they could substantiate their claim regarding exports with the help of those documents. We find from the Panchnama covering the seizure of the goods that several files relating to exports are among the documents under seizure. We, therefore, direct that copies of these files be made available to the appellants for substantiating their claim regarding exports and work out the duty demand in the light of this claim. The case is, therefore, remanded to the Commissioner for a fresh decision regarding duty liability within the normal period of six months as provided in Section 11A of the Central Excise Act, 1944 after giving the due remission in respect of the exported goods. The final order should be passed in the above terms in accordance with the principles of natural justice. The appeal is disposed of in the above terms.
Pronounced and dictated in the open court.