TMI Blog1988 (2) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... been levied on the petitioners on the ground that bimetallic strips manufactured by the petitioners company during the period 1-3-1982 to 28-2-1986 were removed clandestinely without payment of duty. It was urged that the unit manufacturing bimetallic strips, which is one of the essential raw materials for the manufacture of bearings, was located alongwith the unit manufacturing bearings at Sembium, Madras. The goods namely bearings came to be excisable under Tariff Item 34A of the Central Excise Tariff as it then stood only on and from 29th May, 1971. The learned Consultant submitted that the factory manufacturing the bearings was started only in the year 1963 and the Strip Mills manufacturing the bimetallic strips was actually established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this connection the learned Consultant drew our attention to the letter of the Central Excise Superintendent, Coimbatore Division, dated 22-6-1981, wherein the Superintendent had sought for clarification from the petitioners in regard to the sources from which the petitioners got the raw materials and (2) invoices covering the purchase of raw materials (if it is from the petitioners sister concern or own plant, the gate passes should be attached). The learned Consultant submitted that the raw material referred to is only with reference to the strips in question and in response to the letter of the Superintendent the petitioners sent a reply on 7-9-1981 as under: In this connection, we wish to inform you that the raw material requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under the impugned order. The impugned order was, therefore, assailed as prima facie unsustainable. Even on grounds of probabilities, the learned Consultant submitted, that a unit cannot be said to be systematically and regularty removing excisable goods from 1-3-1982 to 28-2-1986 all the way from Madras to places like Coimbatore and Hosur particularly when the petitioners unit was a combined unit along with other units manufacturing excisable products to the knowledge of the Department and under Its periodical supervision. Inspection and Control. The learned Consultant also submitted that even assuming for the purpose of argument that bimetallic strips are goods and excisable, the petitioners would not gain any advantage at all b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout the petitioners taking out a licence under the Act for the period 1 -3-1982 to 28-2-1986. When the petitioners are under a statutory obligation to take out a licence and file a classification list and also pay duty in respect of the clearances of the goods in question, if the petitioners have not done so, the petitioners would be guilty of suppression so as to entitle the Department to invoke the longer period of limitation In terms of the proviso to Section 11 A of the Act. The learned Senior D.R. further submitted that the letter of the Superintendent dated 22-6-1981 and the reply of the petitioners to the same on 7-9-1981 would not prima facie show that the Department had knowledge about the manufacturing activity of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority has found In this regard that the Balance Sheet does not contain the fact of the petitioners manufacturing bimetallic strips. 4. We have carefully considered the submissions made before us. The short question that arises prima facie for our consideration in the present case is whether the materials on record justify the conclusion or finding that the petitioners were guilty of suppression or guilty of clandestine removal of the goods in question viz. bimetallic strips manufactured and cleared by them for the period 1-3-1982 to 28-2-1986. We would like to make it clear at the outset that we are not going into the question at this stage as to whether in the strips are goods within the meaning of the Act and are excisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... metallaic strips have been clearly specified as one of their products, and it is common knowledge that the Balance Sheet to circulated to all the shareholders, the petitioners being a public limited company. Even on grounds of probabilities we find it difficult to accept the plea of the Department that the continuous removal of the goods in question between March 1982 to February 1986 from Madras to Coimbatore was without the knowledge of the Departmental Officers. It is relevant to note in this context that admittedly the petitioners unit manufacturing strips and the one manufacturing Bearings were located in one and the same complex and the Bearing Industry was subject to periodic supervision, inspection and check by Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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