Customs, Excise and Gold Tribunal - Bangalore
Bengal Lamps Ltd. vs Cce on 10 November, 2004
Equivalent citations: 2005(119)ECR358(TRI.-BANGALORE), 2005(191)ELT399(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. M/s. Bengal Lamps Ltd., Bangalore who were engaged in the manufacture of Electric Lighting bulbs and Fluorescent lighting tubes have filed this appeal against the OIO dated 26/28th September, 2001 passed by the Commissioner of Central Excise Bangalore-I Commissionerate, Bangalore.
2. It is seen that the OIO has been issued after a protracted legal battle. The show cause notices were issued on 21st July, 77 and 17th July, 79. The duty confirmed under erstwhile Rule 10A of Central Excise Rules 1944 is Rs. 55,87,521/- and the penalty imposed under 173Q is Rs. 5 lakhs. The issue is that the appellant after having declared a trade discount of 50% in the price lists which was approved by the Department, later raised debit notes and recovered 40% of the discount allowed. This flow back was attributed to freight and forwarding, marketing expenses. The case of the department is that the fact of the flow back was suppressed and the same is not admissible and has to be added to the assessable value.
3. Shri G. Shiva Das learned advocate appeared for the appellants and Shri L. Narasimha Murthy, SDR appeared for the Department.
4. The learned advocate contended that though they have a very good case on merits, he would argue on important legal points. He urged that both the show cause notices issued have not quantified duty amounts. The Hon'ble Supreme Court in the case of Metal Forgings v. UOI has clearly held that the issuance of show cause notice in a particular format is a mandatory requirement of law and a notice must indicate the amount demanded. The above decision has been followed in the following decisions.
(a) CCE v. Indian Oxygen Ltd.
(b) Baroda Electric Meters Ltd. v. CCE ;
(c) Gomti Carbon Dioxide v. CCE .
Moreover, out of the two show cause notices one show cause notice does not even indicate the provision of law under which the same is issued. In this case, the price lists were approved by the Department. Therefore demand would be effective only from the date of show cause notice and not retrospectively. The decision of the Supreme Court in Cotspun case 1999 (113) ELT 553 (SC) : 1999 (84) ECR 817 (SC) is relevant to this case. The adjudicating authority in his order dated 26/28/9.01 which has been issued long afterwards from the date of initiation of the proceedings has invoked Rule 10A of the erstwhile Central Excise Rules. Rule 10 & 10A were in force till 6.8.1977, and a new Rule 10 was introduced. The new Rule 10 was in force till 17.11.1980. The Rule 10A was omitted with effect from 6.8.1977. It is well settled in the decisions of the Hon'ble Supreme Court in Royala Corporation v. Director of Enforcements, New Delhi 1969 (2) 412 (SC) and also Kolhapur Cane Sugar Works Ltd. v. UOI that "omission" is not equal to repeal and therefore Section 38A of the Central Excise Act which was enacted in the Finance Act, 2001 does not save any proceedings under Rule 10A. It was urged that Section 38A seeks to continue the proceedings initiated under any Rules which is amended, repealed, superceded or rescinded. Rule 10A, was omitted and not amended, repealed, superseded or rescinded. Hence Section 38A, does not save Rule 10A. In these circumstances, the OIO which has confirmed the duty demand under omitted Rule 10A of the erstwhile Central Excise Rules cannot be sustained.
5. The learned SDR reiterated the points raised in the OIO. We have considered the rival submissions. We are in total agreements with the legal points raised by the learned advocate. First of all two show cause notices have not quantified the amounts. Secondly, the approved price lists were not revised and the ratio of the Cot Spun case is very relevant. Lastly the invocation of a Rule which is omitted and has not been saved by Section 38A of the Central Excise Act, 1944 has proved fatal to the cause of the Revenue. In the facts and circumstances of the case, we are not able to uphold the OIO. Hence the we allow the appeal with consequential relief.
(Operative portion of the order already pronounced in open Court on conclusion of the hearing).