TMI Blog2012 (9) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 71/78 as this figure was below Rs. 5 lacs - even when it is to be treated as a case of non-disclosure under Notification 71-78, it occurred due to bona fide error on the part of the petitioner in mis understanding the provisions of two notifications. Petition is thus partly allowed. Order of the authorities below is set aside and it is held that the department would be entitled to recover the excise on the value of OEMs of Rs. 43158/- and the benefit claimed by the petitioner under Notification No. 71/78 shall be maintained. In the above circumstances no penalty or interest would be charged. - 2501 of 1983 - - - Dated:- 11-7-2011 - A.K. Sikri and M.L. Mehta, JJ. REPRESENTED BY : Shri Shyam Moorjani with Ms. Anuradha Anand, Advocates, for the Petitioner. S/Shri Mukesh Anand with R.C.S. Bhadoria and Shailesh Tiwari, Advocates, for the Respondent. [Order per : A.K. Sikri, J.]. This petition filed by the petitioner under Article 226 and 227 of the Constitution of India impugns the Order No. 907/1983-B [1984 (16) E.L.T. 619 (Tri.)] passed by the Customs, Excise Gold (Control) Appellate Tribunal (hereinafter referred to as the Tribunal ). By the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocedure laid down in Chapter X of the Rules is to be followed. The relevant Rule 192 of the Chapter X of the Rules is reproduced hereunder :- 192. Application for concession - Where the Central Government has by notification under rule 8 sanctioned the remission of duty on excisable goods, other than salt, used in a specified industrial process any person wishing to obtain remission of duty on such goods, shall make application to the Collector in the proper Form stating the estimated annual quantity of the excisable goods required and the purpose for and the manner in which it is intended to use them and declaring that the goods will be used for such purpose and in such manner. If the Collector is satisfied that the applicant is a person to whom the concession can be granted without danger to the revenue, and if he is satisfied, either by personal inspection or by that of an officer subordinate to him that the premises are suitable and contain a secure store-room suitable for the storage of the goods, and if the application agrees to bear the cost of such establishment as the Collector may consider necessary for supervising operation in his premises for the purposes of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nform the proper officer of the Central Excise that the goods have been dispatched to the respective OEM. The suppliers then have to submit monthly statement of all clearances (i.e. removal of OEM and that for home consumption/replacement market shown separately) in form RT-12 to the Superintendent of Central Excise for final assessment. The said RT-12 is then assessed by the Superintendent, Central Excise, a copy whereof is returned to the supplier duty assessed. 3. It is the case of the petitioner that pursuant to coming in force the aforesaid Notification No. 101/71-C.E. the goods of the petitioner as used by the OEMs were being cleared from time to time. The petitioner used to submit their classification list in Form No. 1 (i.e. Classification list of the excisable goods produced, manufactured or warehoused and other goods produced or manufactured and intended to be removed by the assessee) from time to time for approval by the Assistant Collector, Central Excise Division II, Ghaziabad and the same were approved without any hindrance. In support of this plea, the petitioner has annexed the copies of the approval of the Assistant Collector on 13th October, 1977 as Annexure P-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Dept. of Revenue) No. 71/78-C.E., dt. 1st March, 1978, namely :- In the said notification,- (i) In the first paragraph, after condition (c) the following condition shall be inserted, namely :- (d) where a manufacturer, in so far as goods of the description specified against S. No. 41 of the said Table, has availed of the exemption before the 1st day of August, 1979, or avails of the exemption on or after the said date, under the notification of the Govt. of India in the Ministry of Finance (Department of Revenue). No. 74/79-C.E., dt. 1st March, 1979 or No. 75/79-C.E., dt. 1st March, 1979, the exemption contained in this notfn. shall, during the period commencing on the 1st day of Aug., 79 and ending on the 31st day of March, 1980 apply only to the first clearances of the said goods for home consumption by or on behalf of such manufacturer from one or more factories, upto an aggregate value not exceeding rupees three lakhs and thirt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearances begin, whereas the SCN has been issued on April, 1979 after eleven months thereof whereas limitation is six months. (ii) The department in SCN has alleged availing of exemption wrongly and irregularly through mis-statement and has sought to invoke Rule 10 which cannot be invoked the provisions of the said Rule 10 as it then was contemplated fraud, collusion, wilful mis-statement or suppression for invoking five years clause which is not the case of the department in the SCN and also could not be because they were well aware that there was nothing done by the petitioner wilfully. Rule 10 extended clause therefore is not attracted. In fact knowingly well this aspect all the three authorities passing the impugned orders have wrongfully improved upon the case of the department by adding and reading wilfully into the SCN which otherwise is non-existent. (iii) The demand made by the department is even otherwise misconceived and not maintainable. It is the case of the department that the petitioner has mentioned about Notification No. 71/78-C.E. in the classification list. Therefore, admittedly all the clearances made by the petitioner for home consumption amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the petitioner in Form-1 dated 30th March, 1978 inasmuch as in column No. 5 of the Classification List dated 30th March, 1978 Notification No. 71/78 has been mentioned and in remarks column words this also includes the pistons are inserted which would mean that equipment had been stated in the column rate of duty nil. For this reason, it is submitted that the provisions of Rule 10 of the Act can be invoked and the action was not time-barred. It is also argued that the learned Tribunal had correctly interpreted the two notifications and, therefore, the petition filed by the petitioner challenging the said order is misconceived. The contention of the petitioner that Notification No. 237/79, dated 30th July, 1979 whereby para 2 is deleted is only clarificatory is refuted. As per the respondents, the said Notification clearly stipulates that it would be effective only from the date of issuance of Notification and, therefore, is prospective in nature. It is argued that vehicle policy of the Government can be changed from time to time for their own reasons and merely because para 2 is deleted prospectively, it cannot be said that para 2 is to be ignored when it was very much in ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mark column this also includes pistons meant for original equipment that cannot lead to an inference that the petitioner was availing benefit of Notifications No. 101/71-C.E. and 153/71-C.E. in respect of original equipment. These were vague remarks and in fact misled the Excise authorities. It is further opined that had the Notification Numbers been mentioned the position would have been different. By not mentioning the said notification, the petitioner became guilty of suppression. We agree with this view of the Tribunal. Thus, the limitation of five years as prescribed in the proviso to Rule 10 of the Act is applicable. The action of the respondent was, therefore, not barred by time. 13. Para 2 of the Notification No. 71/78-C.E. categorically provides that nothing in this notification shall apply to manufacturer of the goods who availed the exemption under Notification No. 101/71-C.E. and 153/71-C.E. insofar as goods in Items No. 41 are concerned. Since the petitioner had availed the benefit under Notification No. 101/71-C.E., if this para is applicable the benefit of Notification No. 71/78-C.E. shall not be permissible to the petitioner. The argument of the petitioner, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... home consumption of Rs. 4,99,805.41 under Notification No. 71/78 as this figure was below Rs. 5 lacs. When Notification No. 107/71 is intended to give benefit to OEMs, by availing benefit on the value of OEMs of Rs. 43158/- the denial of the commission provided in Notification No. 71/78 would be clearly unjust and unreasonable. It is clear that the petitioner was under the impression because of the two notifications operating In two different fields that it was entitled to benefit under both the Notifications. Otherwise, the petitioner would not have availed the benefit of Notification 101/71-C.E. on a value of Rs. 43158/- only to deprive itself of much substantial duty exemption on value of home consumption of Rs. 4,99,805.41. Therefore, even when it is to be treated as a case of non-disclosure under Notification 71-78, it occurred due to bona fidee error on the part of the petitioner in mis understanding the provisions of two notifications. 15. The interest of justice, therefore, demand that instead of denying the petitioner benefit of Notification No. 71/78, the petitioner be deprived of the benefit which he has received under Notification No. 101/71 on the value of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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