Customs, Excise and Gold Tribunal - Delhi
Vishwa Industrial Works vs Collector Of Central Excise on 31 August, 1987
Equivalent citations: 1987(14)ECC43, 1987(13)ECR840(TRI.-DELHI), 1987(31)ELT976(TRI-DEL)
ORDER V.T. Raghavachari, Member (J)
1. Under notice dated 15-3-1980 the appellants M/s. Vishwa Industrial Works were intimated hat they had manufactured and cleared, from their unlicensed factory premises, goods falling under item 51A CET (Screw drivers and line testers) during the period 1-4-1978 to 31-3-1979 and upto 10-4-1979, and that they had not observed the relevant Central Excise formalities in connection herewith such as filing classification list, price list etc. and action was therefore proposed to be taken to recover from them, under Rule 9(2) read with Rule 10(1) of Central Excise Rules, duty on the said goods as indicated in the annexure to the notice and also to levy a penalty. The appellants replied. After adjudication the Additional Collector of Central Excise, Bombay under his order dated 29-6-1982 confirmed the demand on goods valued Rs. 2,31,938.13P cleared during the abovesaid period and further imposed a penalty of Rs. 40,000/-. It is against the said order that this appeal has been preferred.
2. The appellants had indicated under letter dated 28-7-1987 that they would not be appearing in person and that the appeal may be disposed of with reference to their appeal petition as also submissions made in the said letter. None appeared for the appellants during the hearing. We have heard Shri Vineet Kumar for the department and have perused the records.
3. It is mentioned in the appeal that when the goods in question became liable for payment of Central Excise duty from 18-6-1977, the appellants applied for and obtained licence for such manufacture but that since under Notification No. 241/77 the goods became free of duty (depending on the quantum of clearance) the appellants took no further steps to observe the necessary Central Excise formalities. They admit in the appeal that the situation changed on the issue of notification No. 71/78 dated 1-3-1978 but claim that the appellants were unfortunately unaware of the same. According to them they became aware of this change only when a survey was conducted by the Department in April 1979 and in connection therewith they furnished all the necessary figures under their letter dated 4-4-1979. It is subsequent thereto that the show cause notice dated 15-3-1980 had been issued with reference to manufacure and clearance on and after 1-4-1978.
4. The first contention for the appellants is that the show cause notice is barred by time since it had been issued more than 6 months fter 4-4-1979 when all the facts were disclosed to the department. On the other hand the case for the department is that since the necessary figures were not furnished to the department this is a case of wilful suppression of facts and the department is therefore entitled to a period of 5 years in enforcing the demand and hence the entire period is within time. It appears to us that neither contention is fully correct. The show cause notice had been issued on 15-3-1980 and would be governed by the provisions of Rule 10 as it stood that day, the provisions of Section 11A not having coming into force by then. Under the provisions of Rule 10 the Deptt. had a period of 6 months from the relevant date for issuing any demand for duty not levied, the period extending to 5 years where the non-levy was by reason of fraud, collusion on any wilful mis-statement or suppression of facts on the part of the assessee or his agent. It is admitted for the appellants that they had been manufacturing and removing the goods without observing the necessary formalities and that the figures necessary for finding out their eligibility for exemption were furnished on 4-4-1979 only. There is no dispute that on such figures their eligibility for exemption was rightly denied. That means that till 4-4-1979 the appellants had wilfully suppressed the necessary facts from the department and had been manufacturing and removing the goods without payment of duty by reason of such suppression. This would therefore mean that in respect of duty payable on the manufacture and clearances till 4-4-1979 the Deptt. had a period of 5 years for enforcing the demand for recovery thereol. Hence the appellants are not correct in contending that in respect of duty payable till 4-4-1979 the Deptt. was liable to issue the necessary demand within 6 months from 4-4-1979, whether or not the period of 5 years from the relevant dates had expired.
5. In respect of duty payable on or after 4-4-1979 there is no dispute that the department had been furnished by the appellants with the necessary figures and there was therefore no question of wilful suppression after 4-4-1979. Hence in respect of duty payable on and after 4-4-1979 the department was under a liability to issue the demand therefor within 6 months from the relevant dates. The department is not correct in contending that in respect of such duty also the period of 5 years was available to them.
6. The result is that with reference to the period 1-4-1978 to 10-4-1979 (the period covered by the demand under notice dated 15-3-1980) the period will have to be split into 1-4-1978 to 03-4-1979 (with reference to which period the demand could be raised within 5 years from the relevant dates) and the remaining period of 4-4-1979 to 10-4-1979 (when the demands were to be raised within 6 months from the relevant dates). Since the notice had been issued on 15-3-1980 it follows that the demand for the period 4-4-1979 to 10-4-1979 was wholly barred by time but not the demand for the earlier period.
7. he appellants have contended that the value of the goods exported should have been first deducted and statutory exemption should be deducted thereafter only to arrive at the quantum of clearances liable for duty. It is the admitted case that no part of the goods manufactured by the appellants was directly cleared for export by them. Their case is that the purchasers from them had" exported the goods and hence the goods, for the purpose of levy of duty etc. should be held to be goods exported and relief granted on that basis. The Additional Collector has in this connection observed that even such proof of export by the purchaser was not available with reference to at least part of the goods which were claimed by the appellants to have been exported. He had further held that insofar as the goods were not cleared by the appellants for export they cannot be treated as the goods exported by the appellants for purpose of levy of duty etc. We are satisfied that this conclusion is correct. The goods have been cleared for home consumption only by the appellants since their clearances were for sale to purchasers within the country and it is these purchasers who are said to have subsequently exported the goods. We are, therefore, satisfied that the claim of the appellants for exclusion of the quantum of such clearances, for purpose of exemption under the Central Excise notification, was not available.
8. We therefore hold that the Additional Collector was correct in quantifying the excess clearances -as were liable for duty.
9. In the result the Order of the Additional Collector is substantially confirmed except to the extent of modifying the demand for duty to exclude therefrom the clearance between 4-4-1979 to 10-4-1979. The appeal is thus dismissed except to the limited extent abovesaid.