9911796707
TMI Blog1983 (10) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof. Since electric motors to the value of ₹ 3,99,700 and ₹ 3,99,750 were cleared respectively during 1978-79 and 1979-80, the total value of goods cleared would work out to ₹ 5,67,975 and 5,64,969 respectively and would exceed the limit of ₹ 5 lakhs for which exemption was granted. A show cause notice was issued on 15-11-1980 asking them why duty of ₹ 14,275.06 for the year 78-79 and ₹ 12,993.80 for 1979-80 should not be demanded under Rule 10(a) of the Central Excise Rules, 1944. They requested for extension of time as they had approached the Coimbatore District Small Scale Industry Association and in their letter dated 30-3-1981 invited reference to a letter dated 12-12-1980 regarding an additional explanation to Notification No. 80/80, dated 19-6-1980 by Notification 123/80, dated 18-7-1980 and requested for further time as the matter was being taken up by the Association with the Government of India. Observing that the party failed to reply within 30 days as stipulated in the show cause notice and has failed to reply even after 7 months. As they have no explanation, he decided the case ex-parte and confirmed the demand under Rule 10(a). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very proceedings as there are a number of units similar to theirs where no such proceedings have been initiated. The appellants rightly feel that no action was initiated since the matter was being discussed with the Government and it culminated in Notification No. 123/80 and Board's letter dated 25-2-1982 which clarified that Notification 123/80 should be deemed to be effective from 1-4-1980 and the whole year 1979-80 should be taken for exclusion and not from the period the notification was issued. The appellants feel that this clarification is equally applicable to 1978-79 and 1979-80 for the following reasons. Exemption under Notification 71/78 was being availed of after necessary declaration and if they failed to include the value of stators and rotors separately, the authorities should have got the defects rectified. They did not do so because they were equally unaware of the position, till issue of Notification 123/80. This is without prejudice to the contention that Explanation VI should be considered effective from the date Notification No. 80/80 was declared effective. In either case Rule 10(a) would not come into play since there was no collusion, fraud or suppression of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puting the value of clearances as it will amount to duplication of accounting. For these reasons, the demand is not sustainable. If it is decided that Explanatory Note to Notification 80/80 is applicable from the date of the parent notification, there will be no need for the appellants to pay duty. On the other hand, since electric motor fitted to mono-bloc power driven pumps are not dutiable but only the stators and rotors which go into the manufacture, no duty would be payable as the value of rotors and stators did not exceed ₹ 5 lakhs. Apart from this the demand is time barred. They, therefore, request that all these aspects be considered and justice rendered. 4. Shri Govinda Rajan reiterated these contentions. He argued that the department issued the notice as late as 15-11-1980 merely because of the clarification to Notification 80/80 which was done at the instance of the trade. Hence the appellants wrote to the Assistant Collector on 12-12-1980 seeking time to reply but he passed orders on 14-7-1980 confirming the demand and ignored the clarification dated 14-2-1980 that electric motors do not come into existence in the manufacture of mono-bloc power driven pumps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mono-bloc pumps alone being manufactured and this is being introduced for the first time. Notification No. 71/73 was superseded by No. 80/80 which was amended by 123/80. This gives exemption to small scale manufacturers of certain specified goods among which arc power driven pumps (30A) and electric motors, all sorts, and parts thereof (30). The inputs and outputs fall under different items hence the question of excluding the value is of no relevance and since the value of. motors plus that of stators and rotors exceeded ₹ 5 lakhs in 78-79 and 79-80, the duty on the excess clearances had been correctly ordered to be paid. 6. In reply, Shri Govinda Rajan pointed out that under Notification No. 73/68, dated 17-4-1968, stators and rotors used in the manufacture of electric motors were wholly exempt. The declaration did not give the value of stators and rotors since the department did not ask for it due to this exemption. As regards the manufacture of mono-bloc pumps and not electric motors, in tlie letter of 22-8-1981 mentioned by the Appellate Collector, this fact was made clear in sub-para 2 on page 3 (not before us). Notification No. 57/78, dated 1-3-1978 had granted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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