TMI Blog2010 (1) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs, Chennai 2006 -TMI - 47663. Demand confirmed, penalty set aside. - E/729/2007 - 174/2010 - Dated:- 21-1-2010 - Ms. Jyoti Balasundaram, Vice-President and Dr. Chittaranjan Satapathy, Member (T) S/Shri S. Muthuvenkataraman , Advocate and S.V. Ramamurthy, Consultant, for the Appellant. Shri C. Dhanasekaran, SDR, for the Respondent. [Order per : Chittaranjan Satapathy, Member (T)]. - Heard both sides. 2. The appellants were initially a DTA unit which converted into an EOU unit in the year 1999. Subsequently, during 2005, they opted out of the EOU scheme to work under EPCG scheme. The letter to opt out of the EOU scheme was sent by the appellants on 15-10-2005 to the Development Commissioner. In the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the letter]. The Final Exit Order was issued by the Development Commissioner on 29-5-2006. 3. Subsequently a show-cause notice was issued on 30-4-2007 to the appellants demanding excise duty of Rs. 1,30,50,370/- in respect of the excise duty on indigenously procured capital goods. The impugned Order-in-Original confirms the said demand of Rs. 1,30,50,370/- along with appropriate interest under Section 11AB and in addition, imposes a penalty of Rs. 10.00 lakhs leading to this appeal. 4. Shri S. Muthuvenkataraman, the learned counsel appearing for the appellants states that the letter dated 18-5-2006 issued by the Assistant Commissioner is an assessment order where it has been stated that the appellants have discharged the entire liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 18-5-2006 issued by the Assistant Commissioner to the Development Commissioner is by no stretch of imagination an order of assessment as the same was an inter-Departmental communication, even though a copy of the same was endorsed to the appellants. He further states that the Assistant Commissioner has wrongly stated in the said letter that the appellants have discharged the entire liability of excise duty on the indigenous capital goods whereas in fact, they have not paid the duty amount till date. He also states that the legal position is well settled that the assessment order is not required to be appealed against for raising a demand on account of short-levy, non-levy etc. under Section 11A of the Central Excise Act, 1944 and Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner they have also indicated the duty liability in respect of the indigenous capital goods and have submitted the CT-3s and invoices in respect of such capital goods. The letter dated 2-5-2006 issued by the Superintendent of Central Excise merely states that no customs duty is payable on indigenously procured capital goods but there is no indication there that no excise duty is payable on the same. From the above, it is clear that the appellants were all along aware that they are required to discharge the excise duty liability on the indigenous capital goods. They were also aware that they have not discharged the said duty liability. When the Assistant Commissioner in his letter dated 18-5-2006 intimated to the Development Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability and even now they are not disputing the same on merit. 8. Even if by any stretch of imagination, the said letter dated 18-5-2006 is to be taken as an assessment/adjudication order [which it is not], still the contention of the appellants that in the absence of an appeal against it, no demand can be raised for the amount short paid/not paid is not tenable. No doubt the decision of the Hon'ble Madras High Court in the case of Madurai Power (supra) is in favour of the appellants. The said decision does take note of the decisions of the Hon'ble Supreme Court in the cases of CCE v. Flock (India) Ltd. - 2000 (120) E.L.T. 285 (S.C.) and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive) - 2004 (172) E.L.T. 145 (S.C.) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47 of the Act vide Union of India v. Jain Shudh Vanaspati Ltd. [1996 (86) E.L.T. 460 (S.C.)]. Therefore, as rightly held by the Tribunal, if the contention of the appellant's counsel that when the goods were already cleared, no demand notice can be issued under Section 28 of the Act is accepted, we will be rendering the words "where any duty has been short-levied" as found in Section 28(1) of the Act as unworkable and redundant, inasmuch as the jurisdiction of the authorities to issue notice under Section 28 of the Act with respect to the duty, which has been short-levied, would arise only in the case where the goods were already cleared. In view of the clear finding with regard to the mis-declaration and suppression of value, which led to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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