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TMI Blog2005 (2) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... ad cleared the fabrics without payment of duty in the year 1992 and that an amount of Rs. 1,02,44,715/- was liable to be recovered as duty on such clearances. It had also alleged that M/s. MRPL had wrongly availed Modvat credit of Rs. 13,22,069/- on PVC Resin (one of the inputs). It had further alleged that the CC fabrics measuring 10,586 L.M. and weighing 800 Kgs. seized from their factory by Central Excise officers on 17-12-92 were liable to be confiscated. The SCN had also held M/s. MRPL and the following persons liable to be penalised :- 1. Shri M. Nagu, Managing Director of M/s. MRPL (Appellant in E/723/98) 2. Shri N. Senthil Velavan (Appellant in E/720/98) 3. Shri M.A. Jalaluddin (Appellant in E/722/98) 4. Shri S. Ramakrishnan (Appellant in E/721/98) 5. Shri M. Rajakili (Appellant in E/724/98) 6. Shri A. Amanullah (Appellant in E/719/98). 2.The SCN was contested and the Collector of Central Excise adjudicated the disputes as per Order-in-Original No. 22/94 ibid confirming a demand of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the remand order, he was not liable to determine MRPL's duty liability in any manner other than on the basis of input-output ratio of CPW to Rexin cloth as notified to them in notice dated 27-8-97. According to the Counsel, the view taken by the Commissioner is contrary to the terms of the remand order which had left all issues open, to be agitated by the parties before the adjudicating authority. It has also been argued that it is open to the appellants to raise all the issues in the present appeals as well. In this connection, learned Counsel has relied on the Supreme Court's decision in CCE, Indore v. Hindustan Lever Ltd., 2000 (120) E.L.T. 3 (S.C.) and ITC Ltd. v. CCE, New Delhi, 2004 (171) E.L.T. 433 (S.C.). In support of his contention that, where the SCN raises a demand of duty on a certain basis, the adjudicating authority cannot confirm the demand on a different basis, learned advocate has cited the Tribunal's decision in Ramani Ice Cream v. CCE, Bhopal, 2003 (159) E.L.T. 223 (Tri. - Del). Relying on CCE, Hyderabad v. Annapurna Industries Ltd., 2003 (153) E.L.T. 586 (Tribunal) = 2002 (83) ECC 29 (Tri), he has contended that, in respect of Rexin cloth (CC fabric) which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand was well over one crore of rupees. The show cause notice proposed to calculate the demand on the basis of consumption of PVC. The learned Advocate Shri Sudhakar contended that in the show cause notice the only ground alleged was to calculate the demand on the basis of consumption of PVC in the factory of the appellant. The appellants in their reply has clearly pointed out with respect to the quantum used by their unit for production of the goods in question. He pointed out that, in the impugned order, the learned adjudicating authority considered this aspect in Paras 83, 84 and 85. After discussing the above aspect, he pointed out that the duty demand cannot be based on the above norm as proposed in the show cause notice. He drew our attention to Para 86 of the impugned order wherein the adjudicating office held as under : "As per their own input-output ratio, the quantity that could be manufactured out of 39,450 Kgs. of CPW works out to 3,57,867 Sq. meters". He has contended that it is on this quantity of 3,57,867 sq. meters the duty demand is made as per Annexure to the order. In this connection he drew our attention to the show cause notice which did not propose to quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the matter, we are of the view that the impugned order has to be set aside and the matter requires to be remanded to the adjudicating authority for de novo adjudication by giving the appellants the input-output ratio on the basis of which the learned Collector wanted to quantify the manufactured goods in question. After the appellant is put to notice of the same the de novo adjudication should be done by the adjudicating officer by observing the principles of natural justice. In this view of the matter, the penalty also is set aside and the same is required to be determined on the basis of the final duty demand in the de novo adjudication proceedings and after taking note of the fact that 10,586 L.H and 800 kg. of coated cotton fabrics are already confiscated. We make it clear that we have not expressed any opinion on the merits of the case and all the issues are left open to be agitated by the parties. (Emphasis added) 6.It is clear from the above order that the issue pertaining to confiscation of the seized CC fabrics (Rexin cloth) was settled by the Tribunal in the first round of litigation and the remaining issues were left open to be agitated before, and re-adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties in terms of the remand order. It is an absurdity to say that the remand order should have been successfully challenged by the parties to be able to agitate all the left-open issues before the adjudicating authority. In the remanded proceedings, learned Commissioner ought to have dealt with all the issues (other than the settled issue relating to confiscation of seized Rexin cloth) arising out of SCN dated 28-9-93 read with the addendum thereto. Obviously, this would mean, it was incumbent on the Commissioner to decide on the issue whether the demand of duty proposed by the department was sustainable on the basis of consumption of PVC Resin or alternatively on the basis of consumption of CPW. It was open to M/s. MRPL to contest either of these. It was also open to the appellants to agitate penalty-related issues. This view of ours is supported by the Supreme Court's decision in the cases of Hindustan Lever Ltd. (supra) and ITC Ltd. (supra). 7.In the case of Ramani Ice Cream (supra), the SCN had demanded duty from the assessee on Ice Cream on the basis of total consumption of sugar in the preparation of ice cream during the period of dispute, but the adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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