9911796707
TMI Blog1999 (11) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amount of Rs. 37,84,783/- paid as refund was granted erroneously and amount was recoverable from the appellant Godrej Soaps Ltd. (GSL for short) as also from ASPL under the provision of Section 11A(1) of the Central Excise Act. 2. The facts of the case are the appellants herein were engaged, inter alia, in the business of being merchant-exporters of detergents. In the normal course of business, the appellants received an order for export of detergent powder with a brand name DYNO to USSR. Since their manufacturing capacity was already fully utilised, the appellants entered into an agreement on 15-11-1989 with ASPL for the manufacture of DYNO detergent powder. In the terms of the said agreement ASPL were required to manufacture the said product and pack as per the specification of the appellants. The raw material and the packing material required for the manufacture were provided by the appellant. However, the rest of the requirement for the manufacture of the final product such as the factory, workers, working finances, technical know-how and compliance with various laws were all the exclusive responsibility of ASPL. It is asserted by the appellants that the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vealed in the agreement, the ownership be passed on to ASPL. After the goods were manufactured the AR4 had been prepared which were signed by the appellant as well as ASPL and the goods were loaded in the trucks with proper packing marks with available number in the packing list. The goods were then loaded in the carrier under the Supervision of Excise Officials. Thereafter they were sent to docks for export. The Customs Officers checked the seal and the goods were exported to USSR. In respect of the entire transaction appellants say that they have exported the goods, obtained the sales proceeds from the purchaser USSR and obtained the normal price. The department was aware of the payment particulars also. 5. During the manufacture it transpired ASPL, one of the noticee had paid Modvat and claimed refund in respect of indigenous raw materials. The refund of the said sum thereof was granted to ASPL and the refund was given in the name of ASPL by Excise Authorities in October 1993 whereas the entire export in the case before us has taken place for the period from December 1989 to May 1990. In October 1993 the refund was obtained by ASPL and the same was given to GSL from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured from any other manufacturer/job worker. The appellant suppressed vital fact from Central Excise Department, Customs Department and DGFT. Hence he confirmed the show cause notice. Hence the present appeal. 8. As far as the other appeal is concerned namely Appeal No. 4018/98 show cause notice dated 4-4-1994 was issued mentioning ASPL as a manufacturer of Dyno synthetics detergent powder and export thereof from 31-12-1989 to 1990 and consequent upon such export, ASPL claimed refund credit in balance under Rule 57F(3) of Central Excise Rules and on account of Rs. 37,84,783.31 was refunded to them on account vide Cheque No. 182164, dated 6-1-1993. The show cause notice charged, inter alia, that the importer is allowed Modvat and granted refund under Rule 57F(3), then indigenous materials becomes duty free and could be construed as duty paid received under DEEC. The appellants have not obtained Advance Licence releasing order in respect of indigenous material except alkyl benzene and sodium sulphate supplied to ASPL and quantity allowed under DEEC book was not reduced to that extent. If the appellant had declared that the Modvat on indigenous goods and claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ASPL. The fact of the said finding which is adverse to the appellant in asking the appellant to pay the said sum of Rs. 37,84,780/-, the appellant had filed the present appeal. 9. Both appeals were heard together. Shri Ravindran, Advocate, appeared for the appellants in these appeals. Shri Chatterjee, ld. SDR, appeared for Department in Appeal No. E/4018/98 and ld. JDR, Ashokan, for the Department in E/4007/98. 10. Shri Ravindran, ld. Advocate contended on behalf of the appellant that the facts narrated above clearly show that in the month of June 1989, they had applied for Advance Licence from DGFT and they procured in August 1989. Since they could not have production in their factory, they had sought the assistance of some other job workers for executing the entire export order of 5,500 MT. The other noticee ASPL was given the task of job work of 2,700 MT of the detergent powder. Mr. Ravindran clearly mentioned the fact stated above describes the scenario that has happened from 1989 to May 1990 i.e. goods were manufactured, raw materials were imported and given to ASPL who manufactured the finished product as per specification in terms of agreement dated 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med in view of the decision of the Tribunal in Collector of Central Excise v. Gavs Laboratories Pvt. Ltd. - 1997 (92) E.L.T. 696. He also cited another case of 3 Member Bench of the Tribunal in Tata Iron & Steel - 1990 (46) E.L.T. 170. 11. As against this, ld. SDR Chatterjee argues that he mentioned about the fact that Modvat refund was given to ASPL wrongly. But the question would be Modvat has been given to ASPL and the department claimed from both. He further raised the question and the appellant be brought in the picture and asked to share the liability. He further emphasised the fact that the application for licence was made on 30-6-1989 DEEC which was provisionally given. A licence order issued on 30-8-1989. GSL enters in an agreement with ASPL on 15-11-1989 which inter alia shows especially in clauses 10 and 13 only show that ASPL was only hired labour or put in relationship of master and servant. He says that by receipt of cheque ASPL should be deemed to be constructive possession of the cheque by the appellant. He relies on the observation of the famous book of Salmond on Jurisprudence 12th edition, pages 246, 258, 273 and 282. In fact he emphasises the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL were only hired labour. If that were to be so, we did not find the same in the show cause notice. There is no mystery of hired labour nor there is anything of agency or trust. The finding given by the adjudicating authority about hired labour and the getting of DEEC scheme have all been in an absolute wrong way. It goes beyond the show cause notice. Adjudicating authorities should bear in mind that no adjudication order should be passed beyond the show cause notice without the noticee being put to notice about the charges made against them. The adjudicating authority would have then passed an order. They should have taken only refund point into consideration and not take refund and come to a conclusion which may entail the order being passed prejudicial to the noticee. In this case, the charge is that cheque has been wrongly given to him. It has been given to ASPL. It cannot be that money has been wrongly given to the appellants. The appellant was nowhere in the picture. The appellant did not have any factory at Kurla. It is not the departments case the appellant was having a factory at Kurla and they have wrongly got it from particular Jurisdictional Commissioner. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of the department is correct, why there should be restriction of 10.78 MT in the entire quantity. 15. As against this, Shri Ashokan for the Department argued that out of the entire goods of 43 AR, 26 AR4s did not tally. The details have been clearly mentioned in the show cause notice as to what were details of incorrect proof of export which would force the appellant to make over the duty. The show cause notice charges them only suppression, which is made in a right way in this case. AC took us through Annexure A to show cause notice (at page 36) to show detail of the number of GP2 and suppression of the same with shipping bill etc. He emphasised the fact that if there is a mistake in one matter which could be understood as a clerical mistake and not such a huge lot of mistake and which cannot be treated as a clerical one. In fact he states mistake runs to 3 typed page. Even if there is a negligence on the part of the officers, it is emphasised it does not and cannot absolve of the appellant of the responsibility to pay duty. The duty has rightly been claimed by the appellant. 16. We have considered the rival submissions. 17. The show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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