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National Aluminum Company Ltd. Versus Commissioner of Central Excise & S. Tax, BBSR

2016 (9) TMI 427 - CESTAT KOLKATA

Whether two show cause notices on the same issue, proposing same cause of action, can be issued & whether extended period can be invoked in the second show cause notices - Held that:- it is observed that first show cause notice dt 23/9/97 was issued by AC CCx. Cuttack for 1202.187 MT of Alumina as per auditor s report, demanding duty of ₹ 23,95,091/- under Rule 57 I (2) and proposing penalty under Rule 173 Q of the Central Excise Rules 1944. The same cause is existing in show cause notice .....

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not be issued when no additional evidence has been recovered by the investigating agency. - Whether a Commissioner can decide show cause notice made answerable to Assistant Commissioner - Held that:- Rule 3 (3) of the Central Excise Rules 2002 allows a Senior Central Excise Officer to exercise the powers and discharge the duties conferred on any Central Excise Officer subordinate to him. This power was earlier available under Rule 6 of the Central Excise Rules 1944. Otherwise also appellant .....

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nt's auditors indicated a shortage of 1202. 187 MT of duty paid Alumina brought by the appellants as inputs from their sister concern on which Modvat credit was taken - Held that:- it is the case of appellant that midyear stock taking is not accurate as all the standards, followed during year end stock taking, are not followed during midyear stock taking. It is also appellant's case that mid year stock taking is done when appellant's smelting plant is being continuously run and dip measurement t .....

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onciliation no shortage was found. - Since the above Chartered Accountant certificate and other documents, were not produced before the Adjudicating Authority, therefore, the matter is required to be remanded to the Adjudicating authority to examine whether the mid year audit report done in Oct 1995 can still be relied upon in the light of documents now furnished by the appellant. However, it is observed that appellant being a Public Sector undertaking and has a reasonable explanation for th .....

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R-I/41/2001 dt 20/12/2009 dt 20/12/2001 passed by CCE & Customs, Bhubaneswar-I as Adjudicating authority. Under this OIO dt 20/12/2001 Adjudicating authority has disallowed a credit of ₹ 22, 24, 046/- to the appellant by confirming the demand under Rule-57 I (2) of the Central Rules 1944 alongwith interest. 2. Sh. S. C. Mohanty (Advocate) appearing on behalf of the appellant argued that department found a shortage of 1202.187 MT of Alumina as per the stock verification report dt 25/10/ .....

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p; a second show cause notice dt 28/9/2000 cannot be issued on the same issue and is time barred. It was also his case that show cause notice dt 23/09/97 issued by AC cannot be adjudicated by the Commissioner. 2.1 On merits Learned Advocate made the bench to through certain photographs explaining how duty paid powdered Alumina is brought in by specially designed railway tank wagons (called BTAP wagons) in rake load and how the same is fed into various silos at appellant s Angul Siding, inside th .....

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Alumina layers in the silos was more uneven. That these facts were brought to the notice of both the Adjudicating authorities as per their replies dt 23/3/1997 & 5/2/2001. Learned Advocate made the bench go through Para 3 of their reply dt 5/2/2001 to the show cause notice to argue that actual stock taking at the end of the year is done by completely stopping the plant & more care is taken while taking dip reading. That during year ending dip reading no variation in the total stock rece .....

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made by the department. 3. Sh. S. S. Chattopadhyay Suptd (AR) appearing on behalf of the Revenue made the following arguments. (i) That on the issue of two show cause notices Adjudicating authority has appropriately discussed the matter in Para 1.0 of the Adjudication order dt 20/12/2001. That as per Rule-6 of the Central Exicse Rules 1944 a senior officer can take up the adjudication work of his junior officer. (ii) Learned AR made the bench go through Pares 2, 3, & 4 of the OIO dt 20/12/2 .....

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these proceeding. (i) Whether two show cause notices on the same issue, proposing same cause of action, can be issued & whether extended period can be invoked in the second show cause notices? (ii) Whether a Commissioner can decide show cause notice made answerable to Assistant Commissioner? (iii) Whether there was a shortage in the stock of duty paid Alumina received by the appellant as per their auditor s report dt 25/10/1996 ? 5. With respect to Para 4 (i) above it has to be decided whet .....

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stigation conducted by Central Preventive Unit of HQ. There is no indication that some glaring additional documents were recovered by the department, which were not available while issuing the first show cause notice dt 23/9/97, requiring issuing of a second show cause notice by invoking extended period. It is now a well accepted legal proposition that a second show cause notice on the same issue can not be issued when no additional evidence has been recovered by the investigating agency. 5.1 Ho .....

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he Central Excise Rules 2002 allows a Senior Central Excise Officer to exercise the powers and discharge the duties conferred on any Central Excise Officer subordinate to him. This power was earlier available under Rule 6 of the Central Excise Rules 1944. Otherwise also appellant should not have any objection if their dispute is settled at a higher level of Adjudication Rather revenue is losing one level of appeal. It is thus held that preliminary objection raised by the appellant, regarding jur .....

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are not followed during midyear stock taking. It is also appellant s case that mid year stock taking is done when appellant s smelting plant is being continuously run and dip measurement taken during such continuous run could be defective. It is observed that this aspect has been highlighted by the appellant before the Adjudicating authority as per Para 3 of their reply date 5/2/2001 to the second show cause notice & reply dt 23/3/1997 to the first show cause notice dated 23/9/1997. Appellan .....

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