TMI Blog2010 (1) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest on duty under Rule 57-I(3) of the Central Excise Rules, 1944 read with Section 11AB of the Act. It also proposed penalties on the assessee under Rule 57-I(4), Rule 173Q, Rule 209, Rule 9(2) and Rule 52A of the Central Excise Rules, 1944 and on the other noticees under Rule 209A. These proposals were contested by the noticees. In adjudication of the dispute, the original authority passed order dated 11-2-1999, which was set aside by the Commissioner (Appeals), who remanded the case to the lower authority for reconsideration. Pursuant to this remand, the original authority passed order dated 14-2-2001, which was upheld by the Commissioner (Appeals) as per order dated 23-5-2002. Against the order passed by the Commissioner (Appeals) in the second round of litigation, the assessee preferred appeal to this Tribunal. The said appeal was allowed by way of remand vide order No. A/425-426/2005 dated 1-4-2005. That was an open remand of the case. Accordingly, the original authority took up the case for de novo adjudication. By following the principles of natural justice, the original authority passed the following order dated 28-2-2006. (1) I confirm the demand of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 14-1-1998 was admitted to be one of those Advice Notes used for clearance of raw materials without payment of duty or reversal of modvat credit. They also admitted their mistake. The raw materials which were admittedly cleared in the above manner without payment of duty or reversal of MODVAT credit included copper rods, flats, paints, cork sheets, etc. The assessee paid Rs. 2,94,898/- on 19-1-1998 towards the MODVAT credit admittedly availed on the inputs. In his further statement dated 23-3-1998, the General Manager admitted that they had cleared raw materials in the aforesaid manner involving total duty of Rs. 4,09,455/-. He also agreed to pay this duty. The Advice Notes and other documents recovered from the assessee under panchanama were among the documents relied upon in the show-cause notice, besides the statements recorded from the two functionaries of the assessee. In their reply to the show-cause notice, the assessee reiterated that they had been following the procedure prescribed under Rule 57F(4), that the inputs cleared by them to their job-worker had been received back after the job-work and used in the manufacture of the end-product which was then cleared on paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed the impugned order, wherein the findings of the lower authority were sustained and it was further held that the assessee had intentionally suppressed the relevant facts with intent to evade payment of duty. On this basis, the extended period of limitation was held to be invokable in the case. Further, the penalty imposed on the General Manager was held to be justifiable on the ground that he was a responsible person conversant with the legal provisions and supervising the activities of the assessee. 4. Learned Commissioner (Appeals) entered certain significant findings in the impugned order. Firstly, it was observed that the assessee had repeatedly submitted the relevant documents before the adjudicating authority, but such documents could not be a substitute for statutory records. The documents could not establish that the inputs cleared by the assessee had been received back from job-workers. Secondly, it was observed that the assessee had failed to furnish any convincing evidence before the adjudicating authority or the appellate authority. These findings of the lower appellate authority do have a bearing on the Miscellaneous Application filed by the appellant. The addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary evidence in support of their case. It is submitted that the remand order passed by this Tribunal had required the original authority to undertake de novo adjudication on the basis of the available evidence only. No direction for allowing the party to adduce fresh evidence was issued to the adjudicating authority. It is also submitted that, as early as in February, 1998, the Range Officer had permitted the assessee to obtain photocopies of all the relied-upon documents and that they had availed themselves of that opportunity. A copy of the letter dated 28-1-1998 of the assessee addressed to the Range Officer has been produced by the appellant s counsel in this context. This letter contains their request for release of all the records which were in departmental custody. The Range Officer s hand-written remarks on this request are also seen on this document. He refused to release the records but permitted the party to take photocopies thereof at their own cost. The learned counsel admits that photocopies of many of the documents were accordingly taken by the assessee. In the present appeal, I have not come across any grievance regarding supply of documents to the appellant. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned to them and that the finished goods manufactured out of such materials were cleared on payment of duty. Moreover, the General Manager clearly admitted that they had cleared raw materials in the aforesaid manner involving duty of Rs. 4,09,455/-. He also agreed to pay this duty. None of the confessional statements was retracted. In the circumstances, I find no reason to interfere with the decision of the lower authorities insofar as the duty liability of the assessee is concerned. 7. Learned counsel has also addressed certain other issues. He submits that, with the omission of the Central Excise Rules, 1944, it was not open to the lower authorities to invoke the provisions of those Rules for recovery of duty from the assessee or for imposition of penalty on them. The period of dispute in this case is March, 1993 to January, 1998 entirely covered by the Central Excise Rules, 1944. With the omission of those rules, it is argued, the orders of the lower authorities cannot be sustained in law. In support of this argument the learned counsel has heavily relied on Order No. A/711 -722/WZB/2004, dated 27-8-2004 in Appeal Nos. E3182 to 3193/2002 [M/s. Sunrise Structurals Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, accepted the fact that MODVAT Rules of the Central Excise Rules, 1944 were replaced by the new Rules w.e.f. 1-4-2000, which came to be known as CENVAT Credit Rules. In other words, the CENVAT Credit Rules were brought into force simultaneously when the MODVAT Credit Rules were omitted. It has, however, been pointed out that, where any Rule was omitted , any proceedings initiated thereunder would not survive. This argument is based on the absence of the word omitted in the company of the words amended , repealed , etc. in Section 38A. A Larger Bench of this Tribunal held that omission of a Rule was a species of amendment and, therefore, the provisions of Rule 38A would squarely apply to proceedings initiated under a Rule subsequently omitted. Nobody has claimed that the view taken by the larger Bench does not hold the field. The aforesaid decisions cited by the learned SDR are also in support of continuance of the impugned proceedings against the appellants under the erstwhile Rules of 1944. The preliminary objection raised by the counsel stands rejected. 8. The learned counsel submits that, in any case, the penalties imposed on the appellants cannot be sustained. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that no valid reason for such penalty has been disclosed in the impugned order. It is submitted that the General Manager has not been found to have physically dealt with the goods in question and, therefore, no penalty under Rule 209A of the Rules, 1944 was liable to be imposed on him. On the other hand, relying on the Tribunal s decision in Dr. Writer s Food Products v. Commissioner of Central Excise, Pune II - 2009 (242) E.L.T. 381 (Tri.-Mumbai), the learned SDR submits that it is not necessary that one should physically deal with the goods to attract penalty under the above provision of law. In the cited case, the challenge was against a penalty which was imposed on the appellant under Section 167(81) of the Sea Customs Act, 1878. The Tribunal noted that the above provision was pari materia with Section 112(b) of the Customs Act, 1962, which, in turn, was pari materia with Rule 209A of the Central Excise Rules, 1944 and Rule 26 of the Central Excise Rules, 2002. After examining the facts of the case, the Tribunal held that the penalty could not be avoided merely because the person concerned did not physically deal with the goods which were removed clandestinely without pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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