TMI Blog1983 (7) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... bre which is sold under its brand name Terene. 3. The Superintendent, Central Excise, Bombay issued a show cause- cum-demand notice on 3rd March, 1982, a copy of which has been given to us by the appellant as Exhibit at Page 33. In the said communication, it was stated that the CAFI with intent to evade payment of Central Excise duty had resorted to willful mis-statement and suppression of facts and contravened the provisions of Rule 173(B) and 173(F) of the Central Excise Rules, 1944 (hereinafter referred as the Rules) inasmuch as it had : (i) cleared 20,559.5 kgs. of polyester fibre and tops manufactured from waste, by processes involving re-cycling; (ii) with intention to evade duty wrongly claimed exemption under Notification No. 44/80, dated 24th of April, 1980 in the classification list No. 2/81, dated 14th April, 1981; and (iii) not paid their duty liability correctly. 4. It was, therefore, proposed to recover duty amounting to Rs. 9,25,177.50 in respect of the period during June 1981 to July 1981 under proviso to Section 11-A of the Act and the Rules and also to impose penalty under Rule 173(Q) of the Rules for contravention of the provisions of the Rules mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, a Central Excise Officer, may within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder, with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words six months the words five years were substituted. Explanation :- Where the service of the notice is stayed by an Order of a Court, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be . 9. On the question of limitation, we have only to notice sub-para (i) of Para 4, and Para 7 of the Assistant Collector s Order to show that on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 21-5-1981. CAFI are aware that C.L. is approved by Assistant Collector then why the Letter dated 14-4-1981 was addressed to the Superintendent. Anyway in this letter no doubt is expressed as to whether the benefit of the Notification is available to them or not. They have also not described the manufacturing process in detail as they have done in their Letter dated 28-12-1981. Without doing that, why they wanted that supervision should be carried by Superintendent. Since the Superintendent did not doubt their bona fides, he was swept. (ii) They were not sure and confident and due to this reason they addressed three other Letters dated 12th, 16th and 19th June, 1981, all to the Superintendent without enclosing a copy to the A.C., otherwise there was no need for supervision on the basis of if you so desire . It appears that, for the time being, the Superintendent thought that since the A.C. has approved the Classification there was no need for supervision in the scheme of S.R.P. He did not realise that he is being taken for a ride and CAFI are addressing the letters with all design, intent and purpose, i.e., to cover the limitation for evading the duty. It appears they were q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h full thoughts they have claimed both Notifications at the same time and have got it approved, and for creating confusion and for deriving illegal benefits and for claiming benefit one for another. It is the Superintendent after addressing to CAFI vide his Letter dated 29-12-1981 brought the matter to the A.C. s notice and in turn, the AC visited the plant and the impugned show cause notice followed soon. (vi) An assessee of M/s. CAFI stature should not have dodged tax collecting authorities. They are very well aware of technical and legal aspects of the entire matter. At least they are supposed to be. A sum of more than Rs. 9 lakhs is due to the Government for last one year from which they have derived undue benefit and financial accommodation. Instead of paying it, they have wrongly contested the issue. They should have apprised fully to the Department and should have got confirmation about their process of manufacture. The onus has not been fully and satisfactorily discharged by them . 10. Before proceeding further, we like to reproduce relevant extracts from Para 6 of the order of the Collector of Central Excise (Appeals) Bombay :- As regards the time limit, I hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st itself, the contents of the classification list had to be verified by the Central Excise Officer in charge of the Appellant s factory and then approved by the Superintendent/Assistant Collector of Central Excise. In other words, when the classification list was to be routed through the Superintendent of Central Excise, the action of writing letters to the Superintendent was only the correct procedure, and such action of the appellant supports the assertion that whatever was possible was being done by it and if the Revenue in its wisdom failed to draw proper inferences or drew wrong inferences, the result could not be said to be willful mis-statement or suppression of facts by CAFI. 14. We accordingly hold that there being no contumacious conduct which could be attributed to the appellant, within the purview of the proviso to Section 11-A of the Act, only the normal period of six months for the issue of show cause notice was available for purpose of examining the question of excisability of the goods or re-examining the question regarding the exemption claimed and granted under Notification No. 44/80 supra. The facts already having been disclosed to the Revenue, the show cause- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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