Customs, Excise and Gold Tribunal - Mumbai
Batliboi And Co. Ltd. vs Collector Of C. Ex. on 8 December, 1999
Equivalent citations: 2000(68)ECC422, 2000ECR83(TRI.-MUMBAI), 2000(117)ELT460(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. The appellants availed of the facility of Modvat credit. From time to time, they filed requisite declarations. On 16-4-1992 show cause notice was issued seeking to deny credit amounting to Rs. 17,46,736.83 during the period 1-4-1987 to 31-3-1988 on the ground that in the declarations only broad description of input was shown where the requirement of the law was that detailed description was to be given. The Collector confirmed the short levy and also imposed a penalty of Rs. 5,00,000/- on the assessees. The assessees then filed an appeal before CEGAT. Reliance was placed by the assessees on Board's letter No. 263/17/87 CX-8, dated 9-2-1988. In this letter it was observed that detailed description was mandatorily to be given but that in cases relating to the period prior to February, 1988 the Collector could permit credit to be taken provided the private or statutory records showed that the inputs had been duly received and consumed in the manufacture of final goods. The plea was also made that the demands were hit by limitation. The Tribunal in their order Nos. 635 to 636/93 WRB, dated 29-4-1993 did not give their mind on the aspect of limitation but observed that the assessees were in a position to produce the necessary records to show receipt and utilisation of the inputs in terms of the cited order of the Board. The matter was, therefore, remanded to the jurisdictional Collector for him to examine the relevant records which the appellants were directed to produce. In the de novo adjudication which is now impugned before us, the Collector repeatedly observed that in spite of the prompts and directions of the Tribunal, the assessees had failed to produce any records before him but that they had exclusively relied upon arguments as to barred by limitation. He also discussed the aspect of limitation and again confirmed the same quantum of demand and again imposed a penalty of Rs. 5,00,000/- on the assessees. Hence the present appeal.
2. We have heard Shri. M.H. Patii for the appellants and Shri B.K. Choubey for the Revenue.
3. Shri Patii refuted the observation of the Collector that the assessees had not produced the documents for him to examine. He refers to a communication from the assessees to the Collector dated 25-2-1994, i.e. after the receipt of the impugned order. In this communication they have made the claim that during the hearing "a carload of documents" was brought before the learned Collector and that the Collector had stated that he would depute some officers to examine the documents. A further claim was made that on oral summons subsequent to the hearing the records were placed before the jurisdictional Superintendent and the Inspector nominated by him. The documents which were presented were also described. It was also claimed that other documents were also ready for examination. Surprise was expressed at the orders of the Collector.
4. In response to a specific query whether the Collector had reacted to the assessees' letter dated 25-2-1994, Shri Patii replied in the negative. Shri Choubey, however, submits that there is nothing on record to establish this statement.
5. We observe that during the proceedings before the Tribunal a specific claim was made about the availability of the relevant documents and readiness of the assessees to produce the same. In the face of that repeated claim and the request for remand, it appears doubtful that the assessees could not produce the documents when called upon to do so. Although the letter is subsequent to the receipt of the impugned order, it makes a very specific and definite claim that the records were available and that part of the records were examined by the executive functionaries subordinate to the Collector. Our first reaction was to re-remand the matter to the Commissioner for once again examining the documents, but in view of the substantial time that has elapsed and also in view of the statement of Shri Patii that the point of limitation which was not considered in the earlier order of the Tribunal could be taken up by us for consideration, we proceed to decide the dispute.
6. In this connection Shri Patii submits that on. the very issue i.e. the availability of Modvat there are three cases pertaining to the same applicants which have achieved finality at the Tribunal's level. He submits that one case covered period prior to the period covered in this case and two other appeals the period covered is subsequent. All these appeals were allowed on the point of limitation alone. We have seen the judgments. The case reported in 1999 (112) E.L.T. 568 (T) relates to show cause notice dated 20-3-1992 and covers the period March, 1987 to December, 1987. The learned single member on the point of limitation observed that the extracts of RG23 part I were submitted along with RT12 returns during the entire period. It was observed that in these extracts duty paying documents had come to the notice of the department and if there was no mis-declaration or short declaration, the department had ample opportunity to notice and correct lacuna. In the judgment reported in 1999 (111) E.L.T. 220 (T) where the show cause notice was issued on 17-3-1993 covering the period April, 1988 to March, 1989 the Tribunal found in favour of the same assessee on point of limitation on the same observation that the extracts of the relevant records were in the knowledge of the department. In the third case reported in 1996 (87) E.L.T. 90 where the show cause notice was dated 18-4-1994 covering the period April, 1989 to September, 1989 the Tribunal held the demand as barred by limitation on the same grounds.
7. In the present case the show cause notice itself indicates that the allegations contained therein were made on the verification of RG23A registers. Extract of these registers are annexed to the RT12 return which contains the details of the Modvat taken during the month which return is filed in the second week of the succeeding month. Therefore it is deemed that the extracts on which reliance is placed in the show cause notice were in the knowledge of the department during the period covered by the show cause notice itself. We have also seen the statement placed on record showing that the unit was continuously audited by a number of audit parties from July, 1987 onwards at a very high frequency. It is claimed that the earlier cited decisions of the Tribunal had emerged from the show cause notices issued from time to time on such audit conducted. Therefore the assessees' claim that the ratio of these three judgments applies fully has to be accepted.
8. On the ground that the demand is hit by limitation we allow this appeal with consequential relief.