TMI Blog1998 (7) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... od 1-3-1983 to 14-9-1986. 2. On the basis of investigations made by the Department, the Department issued an SCN dated 15-1-1987 alleging that M/s. GSFC had by wilful mis-statement and suppression of facts regarding the determination of losses of synthesis gas supplied and received back from Heavy Water Plant (HWP), as well as in their premises, by determining the losses on the basis of their record and put up claims to HWP and recovered substantial amounts for such losses and the amounts so claimed for the losses were adjusted in accounts by deducting their dues payable to HWP. Department further alleged that GSFC had recovered a total amount of Rs. 360.90 lakhs being the value charged towards loss of synthesis gas in HWP on which Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of nitrogen and hydrogen. The object of the agreement between GSFC and HWP was to allow synthesis gas produced by GSFC to be utilised by HWP for extraction of heavy hydrogen from the synthesis gas supplied and to return the synthesis gas to GSFC for production of ammonia. According to the paragraph 10 of the original agreement entered into between GSFC and HWP the estimated synthesis gas during this process of extraction of deuterium (heavy hydrogen) in the HWP was equivalent to loss of production of one tonne of ammonia per day. Ld. Counsel submitted that the only basis for the Department s allegation was the Minutes of the Meeting between the officers of GSFC and HWP dated 10-12-1984 in which GSFC had claimed loss of 3100 MT of ammonia/sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er day. HWP on the other hand maintained that loss, if any, in their plant was much lower than what was claimed by GSFC and they were prepared to accept only a loss of 5 tonnes a day over and above one tonne a day estimated in the original agreement. Since HWP was a project of the Atomic Energy Commission, it was not possible to obtain complete data about the processes involved. Though GSFC had maintained full records of synthesis gas transferred to HWP, it was not possible to get accurate figures of synthesis gas returned. It was not, therefore, possible for GSFC to give accurate figures to the Department about the loss, if any, of synthesis gas returned by HWP during the relevant period and there was no suppression of facts and mis-repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84. Further, the demand has been calculated taking a flat figure of 365 working days per annum, which was not correct. In fact, by letter dated 29-5-1993 addressed by GSFC to HWP, it had been clarified that supply of synthesis gas made to HWP were 210 days in 1983, 279 days in 1984, 312 days in 1985 and 319 days in 1986. Even if it is assumed that the parties had agreed to a loss of 5 M.T. per day, the same can be given effect to only from 10-12-1984 and not for the earlier period. As regards penalty, no penalty can be imposed once was under Chapter X procedure is involved [vide Ashok Leyland v. C.C.E. - 1989 (44) E.L.T. 343]. 7. In support of his contention relating to limitation ld. Counsel also referred to the correspondence between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the Department till it came to know after investigation and on the basis of the Minutes of the meeting dated 10-12-1984. Therefore, the assessee had wilfully suppressed the correct information of the loss. He also referred to the findings in the order-in-original in which the point relating to time bar has been fully discussed by the Collector. On the question of the demand being worked out on the basis of a flat rate of 365 working days in a year, the ld. SDR drew attention to Annexure A , B and C to the SCN in which the actual working days for each year had been clearly mentioned on the basis of the records shown by the assessee. 9. We have considered the submissions. It is not in dispute that the accurate figures relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of facts as to the actual quantities of loss caused. 10. Since we have held that the extended period of limitation will not be available for demanding the duty we hold that the duty demand calculated at the rate of one M.T. plus 5 M.T. per day will be restricted to the period July 16, 1986 to September 14, 1986, applying the normal six months period from the date of issue of the SCN, namely, 15-1-1987. 11. As regards the argument of the appellants that in terms of Rule 192/196 for the alleged unaccounted loss of synthesis gas at HWP, the demand should have been raised on HWP and not on GSFC, we find that the case law relied on by the appellants supports their contention to a limited extent only. In CCE v. Electronics and Engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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