TMI Blog1997 (3) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... concessional rate as provided under Notification No. 175/86-C.E. Both the units are proprietary concerns of the same Proprietor. The department alleged that in terms of Notification No. 175/86-C.E., the total value of clearances of specified goods made by a licensee from one or more factories for home consumption during the financial year could not exceed Rs. 75 lacs for concessional rate of duty; that on examination of the aggregate value of clearances from the records revealed that duty was short-paid during the financial years 1988-89, 1989-90, 1990-91 and 1991-92. It was also alleged that the unit at Rai Bareli has been availing Modvat credit during the said period and hence was not entitled for any duty free clearances and that they were liable to pay at full rate of duty. Accordingly, a show cause notice was issued to the appellants asking them to explain as to why duty short-paid should not be demanded from them and why penalty should not be imposed. The appellants submitted that the total value of clearances of excisable goods of both the units was much less than the value of clearances for which exemption was granted. The appellants submitted a C/List under Rule 173B with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved the C/List, the department has to bear the consequences thereof. The ld. Constt. submitted that in the instant case right from the beginning, the appellants have been submitting C/List containing the description of goods showing them liable to payment of excise duty and this list was accepted and approved by the excise authorities, therefore, there was no suppression or misstatement of facts or collusion or contravention of provisions of Central Excise Act and therefore, the limitation would be only six months prior to the service of the show cause notice. In support of his contention, the ld. Counsel cited and relied upon the decisions reported in 1989 (44) E.L.T. 552; 1993 (63) E.L.T. 534 and 1988 (35) E.L.T. 605. 5. The ld. Constt. submitted that in the instant case, the facts were known to the department. The ld. Constt. submitted that right from the beginning of the units, they have been furnishing information to the deptt. regarding activities undertaken by them and therefore, there was no suppression or misstatement. In the circumstances, ld. Constt. submitted that demands beyond six months cannot be raised. In support of his contention, ld. Constt. cited and relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o escape from payment of duty. In support of his contention, he cited and relied upon the judgments reported in 1995 (78) E.L.T. 401 and 1995 (76) E.L.T. 497. 8. The ld. Constt. submitted that availment of Modvat credit by one unit was not fatal to avail duty free clearance at another unit. The ld. Constt. submitted that if Modvat credit is availed of in regard to one tariff item, benefit of exemption under Clause (a)(i) of the Notification is available if the benefit of Modvat credit is not availed of in regard to other tariff heading. The ld. Constt. submitted that there is no bar to the availment of Modvat credit when the appellants are also availing of the benefit of Notification No. 175/86-C.E. so long as the conditions are statisfied. The ld. Constt. submitted that exemption as SSI unit and Modvat benefit can be availed of simultaneously by manufacturers but on different goods. In support of this contention, he cited and relied upon the decisions of the Tribunal reported in 1991 (52) E.L.T. 594; 1992 (56) E.L.T. 168 and 1993 (63) E.L.T 759. The ld. Constt. submitted that Notification No. 175/86-C.E. clearly recognizes two categories of manufacturers namely those who avail M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hole demand is time barred and is not sustainable in law. For the period prior to 17-11-1988 also demand cannot be enforced as the position was clarified on 17-11-1988 and therefore, the demand should have been raised within six months. Therefore, the demand for the period prior to 17-11-1988 is also not sustainable in law. 11. On the question of penalty, we find that though we have not considered the merits of the case, however, we find that for purpose of availing benefit of Notification No. 175/86-C.E., the aggregate value of clearances of the two units should have been taken for purpose of determining rate of duty applicable. We also find that Notification No. 175/86-C.E. was very clear insofar as clubbing of the value of clearances of two units is concerned. In view of the totality of the circumstances and the facts of the case, we reduce the penalty to Rs. 50,000/- (rupees fifty thousand only). 12. In the result, the impugned order is modified to the extent stated above and the appeal is disposed of accordingly. Sd/- (G.R. Sharma) Member (T) 13. [Contra per : S.L. Peeran, Member (J)]. - I have gone through the order prepared by my learned brother, Shri G.R. Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, Member (T)]. - The issue referred to me is within a narrow compass. The two members were unanimous in their decision about demand being hit by limitation as there was no suppression or wilful mis-statement on the part of the assessee leading to the short levy. Whereas Member (Technical) chose to reduce the quantum of penalty, the Member (Judicial) is of the opinion that imposition of penalty in the absence of the department s establishing contraventions of any provisions of law, is not justified. 15. Shri R. Swaminathan, ld. Consultant claimed that wording of the provisions of the proviso to Section 11A CESA, 1944 is akin to the provisions of Rule 173Q(1)(d). Both require intent to be established. If it is held that the provisions of Section 11A are not invokable, then the same would apply to 173Q(1)(d) also. He stated that this belief is expressed in the following judgments (1) Hind Cement Products v. Union of India reported in 1987 (32) E.L.T. 636 (All.). (2) The State of Andhra Pradesh v. Sri Ganesh Bhavan Hotel reported in 1993 (53) S.T.C. 169. 16. He, further, stated that the Tribunal also in several judgments had held that where the extended period could not apply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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