TMI Blog1983 (11) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... time when Tariff Entry 51A was introduced in the Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The company subjected itself to excise control from the date of introduction of said Tariff Item; such as applying for L-4 licence, filing necessary Declaration and Price List, etc. and paid excise duty at the normal rates as determined by the Central Excise Tariff (hereinafter referred to as the C.E.T.). However, on 16-6-1976, the Central Government issued notification; being Notification No. 198/76-C.E., whereby some concessional rates of excise duty were provided, depending upon the `base clearance value during a given period, by or on behalf of the manufacturer, which fact had to be determined, inter alia, in accordance with the formulae laid down by clause 2 of the aforesaid Notification. The relevant portions, for the purpose of present controversy, of clause 2; namely (b) and (c) as well as the opening part of the said Notification, are reproduced below for facility of reference :- In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts the excisable goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Collector. 4. Subsequently, the Department felt that in view of the position that the factory had commenced production of these goods in 1950, and there had been clearances of the goods even since; the provision applicable to their case was sub-clause (c) of clause 2 of the Notification, which provided that the `base period would be the year in which the aggregate of the clearances of the `specified goods , during any of the financial years 1973-74, 1974-75 and 1975-76 was the highest, and the `base clearance would mean the clearance during such `base period . Working on the data, that had been supplied by the appellants, the `base period was determined afresh, and since the clearances in 1975-76 was the highest out of the three years under consideration, it was felt that, that was to be the `base period for the purpose of applicability of the benefit of this notification. 5. This change in view was followed by a notice to show cause issued on 6-1-1979 stating that M/s. J.K. Engineers Files had availed of excess concession to the extent of ₹ 2,97,437.60, due to wrong fixation of `base clearances value , in terms of para 2(2)(b) of the Notification No. 198/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced after 1974 budget. As a result, the demand for ₹ 2,97,437.56 was confirmed, under Rule 10(2) of the Rules. 8. The party assailed this finding in the appeal filed before the Appellate Collector, Central Excise, Bombay, reiterating their plea that inasmuch as their goods became excisable for the first time with effect from 1-3-1974, the `base clearance within the contemplation of the Notification under reference, had to be with reference to that point of time, when the goods became `excisable , because exemption was only with reference to excise duty. They also contested the finding that the mistake in fixing the `base clearance period had occurred as a result of mis-statement or misdeclaration on their part, pleading that all the figures and records had been examined and verified by the Assistant Collector, before working out the `base clearance value and after making full enquiries as regards the `clearance period of the goods, and that the view now expressed by the Assistant Collector that incorrect declaration on their part was responsible for wrong fixation of the `base clearance period and `base clearance value , was not sustainable on facts, and that even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf, and also declaration of their record position as on 1-3-1974, again filed on that very day, and which showed the position of products manufactured prior to that date, and also the particulars which they had specifically furnished as to the quantum and value of the said products, manufactured in their factory and removed therefrom in 1973; while filing proforma in 1976 for availing benefit of this Notification No. 198/76, alongwith the declaration, they had submitted under cover of their letter dated 15-5-1976, in which they had clearly and specifically stated that appellants factory had started producing these goods from 1-5-1950 but considered them excisable with effect from 1-3-1974, when they came for the first time under Excise Control. They, therefore, contend that in the face of this categorical statement and clear information furnished by them to the Excise authorities for the purpose of determining the `base clearance value , the allegation of any suppression of facts or mis-statement on their part was wholly unfounded, and that the demand was liable to be struck down as barred by time. 11. At the hearing, that was first fixed for 1-8-1983, Shri V.J. Taraporevala, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary for the purpose of arriving at a correct decision in this regard. The learned Counsel undertook to file copy of the Refund Application, as well as other relevant documents and for this purpose the hearing was adjourned. 14. It was taken up again on 1st of November, 1983 when Shri Taraporevala again appeared with Shri S. Ganesh, Advocate and resumed arguments on the point of limitation. He invited attention of the Bench to the fact that excise duty had been paid in the first instance in normal course and thereafter application for refund was filed which refund claim was duly determined by the Assistant Collector and conveyed by means of his letter dated 23-8-1977 whereby refund claim for ₹ 2,08,628.35 was allowed by way of Central Excise duty relief scheme in terms of Notification No. 198/76-C.E., dated 16-6-1976. He pointed out that the Notice to show cause was for recovery of this amount, or what was termed to be differential duty, depending upon the determination of `base clearances value , which had been finalised earlier; firstly, on the necessary declaration being filed in 1976 itself, and subsequently confirmed by means of order, on the refund claim filed on 1-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to excisable goods (emphasis supplied) and that the Assistant Collector concerned had the entire record before him and all relevant information as supplied from time to time when this order fixing the `base clearance value under sub-clause (b) of clause 2 was passed. He thus pleaded that at no stage, the appellants had held back any material, from the concerned authorities, and had all along indicated that they were furnishing information, in relation to excisable goods , (the view which they still held), that the goods described as specified , in the notification related only to excisable goods . He therefore strongly urged that there was no question of any mis-statement on their part, and no ground existed for invoking extended period of 5 years. 18. Shri Taraporevala placed reliance, in support of this plea, on a decision of the Tribunal recorded in case : Ganga Spinning Weaving Mills, Ludhiana v. Collector of Central Excise, Chandigarh (1983 E.L.T. 1674) (CEGAT) laying down that when duty was paid in accordance with the approved price list, and there was no material at all in the show cause notice alleging any suppression of fact and mis-statement justify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t `base clearances value had to be fixed in terms of clause 2(c) of the notification was perfectly justified. 20. Reverting to the plea, as to notice being barred by time, although, she conceded very fairly that charge of wilful suppression could not be laid, much less substantiated on the basis of documents and material placed on record, she still contended that it was a case of mis- statement, made in the declaration, on the basis of which `base clearances value was determined, which showed the date of first clearance to be 1-3-1974 and this misled the concerned Excise authorities, in determining the `base clearances value on wrong footing. She read out extensively from Rule 10 to say that even if it was a case of misstatement, the extended period of 5 years would be available to the Department. 21. We have given our very careful thought to the respective contentions of the parties. We find that the plea on the question of Notice of demand being barred by time is so palpably and patently forceful on the given facts of this case, that we think it expedient to first advert to this aspect of the matter. We find in this regard that, as pointed out by the learned Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r refund was made, after considerable lapse of time, as indicated by application dated 20-8-1977 (Ex. Z), and the Refund Application preceding that, bearing the date of 1-8-1977. This refund claim was allowed by Assistant Collector s order conveyed by means of letter dated 23-8-1977. 23. It is pertinent to note that when the order dated 4-11-1976, determining the `base clearances value was passed, and the time the order dated 23-8-1977 allowing the refund application, on the basis of the `base clearances value determined by the Assistant Collector, had been made, the Excise authorities, at the level of the Assistant Collector, had complete information in their records, as having been furnished by the appellants from time to time. The most material information in this regard is the communication addressed by the appellants to the Assistant Collector of Central Excise under cover of their letter dated 15th May, 1976 (Ex. C), accompanied by detailed information filled up in proforma, and the very first column of this declaration gives the date of production as 1st May, 1950, and a clear distinction is made by showing in the next column that the date of coming under Excise control ..... X X X X Extracts X X X X X X X X Extracts X X X X
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