TMI Blog1985 (5) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred as the goods) under the same brand-name of Amarite at the same factory. Pending issue of Loan Licence in their own favour for manufacture of Synthetic Resins and the goods at the factory of M/s Rawji Amarsi, 44865 Kgs. of goods was manufactured at the factory during June, 1974 to July, 1974 and was cleared separately in the name of M/s Rawji Amarsi during the period from August, 1974 to August, 1975. From 1-8-1974 the party started the manufacturing and clearing the same product with the same Brand name Amarite on their own. The goods and the Synthetic Resins were classified under T.I. 15A(1) and the benefit of notification No. 198/76, dated 16-6-1976 (hereinafter referred as the notification) was available for these goods. The then jurisdictional Assistant Collector fixed the base quota in terms of the notification for the period from 1-8-1974 onwards ignoring the clearances of the same product from the same factory by or on behalf of M/s Rawji Amarsi. The base clearances were fixed at 111789 kgs. It was pointed out by audit that the clearances of the specified goods from the factory took place when the factory was in existence prior to 1973 and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as asked to explain as to why the base clearance should not be changed. His plea is that the Assistant Collector had no power to review fixation of the base clearances fixed earlier. He further pleaded that unless base clearances could be refixed under the provisions of the law, the Assistant Collector had no authority to change the base clearances. He pleaded that if at all the Assistant Collector had any power of review in this regard, he had only a limited power which could be exercised in case there was change in law or change in tariff entry or there was pronouncement of law by the Supreme Court of some fresh facts had come up. He stated that the Department was in possession of all the facts regarding lease of the factory to the appellants from the previous owners and therefore the Assistant Collector had no power for fixing the base clearances. His plea is that unless base clearance could be legally refixed no demand would lie. He stated that as demand was raised after six months period, a part of the demand would be out of time even if these are held to be maintainable under the law. 3. Smt. Chander, the learned JDR, pleaded that we have to go by plain reading of the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication issued under the sub-rule (1) of rule 8 and in force for the time being), as is in excess of seventy-five per cent of such duty, subject to the following conditions, namely :- (a) the clearances made during any financial year shall be separately calculated for all the goods specified in column (3) of the said Table against each serial number specified in the corresponding entry in column (1) thereof on the basis of the accounts maintained under the Central Excise Rules, 1944, in terms of the unit for calculation specified in the corresponding entry in column (4) of the said Table; (b) the clearances of any specified goods, exempted from the whole of the duty leviable thereon in any financial year shall not be taken into account, but clearances of any specified goods under bond for exports or clearances of any specified goods entitled for exemption; when used in the production or manufacture of any other goods shall be taken into account; Explanation. - For the purposes of this condition :- (i) any goods which were exempted from the whole of the duty leviable thereon in the base period but not so exempted in any financial year subsequent to the base period, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be fixed with reference to the clearances made by a particular manufacturer. 5. The first point to be disposed of in the proceedings before us is as to whether the benefit of notifications is to be worked out based on the base clearances fixed with reference to the clearances made by a particular manufacturer as pleaded by Shri Taleyar Khan, the learned Advocate of the appellant or based on the first clearances of specified goods made from a factory. It is seen that the exemption in respect of specified goods set out in the Table to the Notification is in respect of those goods which are cleared from one or more factories by or on behalf of a manufacturer subject to the other conditions in the notification. It is seen that the word by or on behalf of a manufacturer relate to the excess clearances made from one or more factories. This means that if a particular manufacturer clears the goods himself or clearances are made on his behalf from one or more factories all his clearances from said factory would be taken into reckoning for working out the excess. From this para we cannot, however, read that the base clearances should also be in respect of manufacturer. For the fixat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of law for less charge demand. The limited power of review has been conceded by the appellants advocate also. It is precisely for this purpose that provisions regarding the recovery of short levy had been made in the law. A wrong fixation of base clearances done which could be due to wrong interpretation of the provisions of the notification or due to arithmetics; error cannot be allowed to remain unrectified in perpetuity. 9. We hold, therefore, that the demand of duty was not without jurisdiction. The question, however, remains as to which communication could be considered as the show cause notice for the purpose of the demand against the appellants. It is observed that the Superintendent had addressed a letter to the appellants on 19-8-1978 communicating the discrepancy pointed out by the Audit and informed that the base clearance would be 2,27,737 kgs. The appellants sent a reply to the same vide letter dated 22-8-1978 and submitted that they failed to understand as to how the arbitrary figures 2,27,737 kgs. has been arrived at. Further communication was sent from the office of the Superintendent vide letter dated 31-8-1978 pointing out that the earlier figure was errone ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
