Customs, Excise and Gold Tribunal - Tamil Nadu
Collector Of Central Excise vs Featherlite Products (P) Ltd. on 25 November, 1992
Equivalent citations: 1993ECR419(TRI.-CHENNAI), 1993(65)ELT398(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. This appeal is filed by the Department against the order of the Collector of Central Excise (Appeals), Madras dated 31-10-1988.
2. Shri JM Jeyaseelan, the learned D.R. for the Deptt. assailing the impugned order submitted that the respondents herein cleared the goods on payment of duty at 6.25% for the period 3-4-1986 to 15-4-1986 whereas as per Notification 175/86 dated 1-3-1986 as amended by Notification 216/86 dated 2-4-1986 the goods should suffer duty of 15% as admittedly the respondents was availing the benefit of Modvat Credit. The short duty paid was sought to be recovered by the Supdt., who made an endorsement in the RT 12 memoranda relating to April 1986 detailing the aforesaid facts. The learned D.R. submitted that the Respondents are not disputing the fact that they would be liable to pay duty @ 15% on the goods in question. The Respondents were also put on notice as required under which the short levy was sought to be recovered as evidenced by the endorsement in the RT 12 assessment memoranda. He, therefore, submitted that the impugned order is liable to be set aside since the finding therein that the demand is barred by limitation is not tenable in law in the above factual background.
3. Shri G. Sampath, the learned Counsel for the Respondents in fairness has not disputed the factual position as submitted by the learned D.R. and adumberated above. He submitted that the Respondents opted out of the MODVAT Scheme with effect from 15-4-1986 and produced evidence before us in this regard. He contended that the Respondents opted out of the MODVAT Scheme during the course of the year and the Department has sought reversal of the MODVAT Credit already taken. The learned Counsel further submitted that this subsequent change in circumstances has to be taken note of while deciding the issue in the interests of justice.
4. We have considered the submissions made before us. The fact that the Respondents are liable to pay short levy is admitted and this issue is beyond the tale of controversy. The Respondents opted out of the MODVAT Scheme from 15-4-1986. It is well settled that subsequent changes in circumstances should be taken note of by the Courts and quasi-judicial authorities while deciding issues and relief should be moulded accordingly. Since the Respondents' opting out of the MODVAT Scheme has a bearing on the issue to be decided with reference to Respondents' liability to pay duty and their claim to exemption as well under law and since the subsequent change in circumstances was not available when the impugned order was passed, we are of the view that the impugned order has to be set aside and the matter remitted to the original authority for reconsideration of the Respondents' claim with reference to their entitlement to the benefit of the Notification after they opted out of the MODVAT Scheme w.e.f. 15-4-1986. We make it clear that we are not expressing any opinion on the merits of the issue. The Respondents have to satisfy the original authority about the opting out of their MODVAT Scheme and also availing of other benefits.
V.P. Gulati, Member (T)
5. I observe that the learned lower authority has held that while the RT 12 return was assessed by the Supdt, on 24-10-1986 the show cause notice was issued by the authorities on 3-6-1987. We find that after making endorsement on the RT 12 assessment giving out reasons for raising the demand for differential duty the authorities have chosen to issue another show cause notice on 3-6-1987. On going through the endorsement on RT 12 return, I find that the wordings have all the ingredients of a show cause notice and the Respondents were made aware of the fact as to why the duty was being demanded. In a situation like this where reasons for demand of short levy has been spelt out in the RT 12 assessment memoranda it can be construed to be a show cause notice and there is no need for the issue of another show cause notice as the assessee can be taken to have been put on notice with reasons for raising the demand of short levy. The learned Counsel for the Respondents fairly conceded that this endorsement can be taken to be a show cause notice and the submissions made before the lower authority can be taken to be submissions made in response to the endorsement made in the RT 12 assessment. The learned Counsel pleaded that the learned lower appellate authority has not examined the issue on merits. I observe that the learned lower appellate authority has decided the issue on grounds of limitation. He has not gone into the merits of the issue. The learned Counsel for the Respondents pleaded that the position in regard to MODVAT Credit changed as in April 1986 itself as the Respondents opted out of MODVAT on 15-4-1986. The demand for differential duty, he pleaded, has been raised for April 1986 and the Respondents would be able to convince the authorities with facts and figures and also with reference to the rules that no demand could be made on account of their opting out of the MODVAT Scheme in respect of the clearances made before opting out of the MODVAT Scheme. I observe that the learned lower authority has not gone into the merits of the case, as pointed out by the learned Counsel for the Respondents and has not gone into the facts as pleaded by the appellant. I, therefore, agree with my learned Brother that the matter is required to be remanded to the original authority for the limited purpose of finding as to whether the Respondents will be entitled to the lower rate in terms of the Notification for the reasons that they opted out of the MODVAT Scheme on 15-4-1986. The appeal is thus allowed by remand.