TMI Blog1997 (3) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... rate as provided under Notfn. No. 175/86-CE. Both the units are proprietary concerns of the same Proprietor. The department alleged that in terms of Notfn. No. 175/86-CE, the total value of clearances of specified goods made by a licensee from one or more factories for home consumption during the financial year could not exceed ₹ 75 lacs for concessional rate of duty; that on examination of the aggregate value of clearances from the records revealed that duty was short-paid during the financial years 1988-89, 1989-90, 1990-91 and 1991-92. It was also alleged that the unit at Rai Bareli has been availing modvat credit during the said period and hence was not entitled for any duty free clearances and that they were liable to pay at full rate of duty. Accordingly, a show cause notice was issued to the appellants asking them to explain as to why duty short-paid should not be demanded from them and why penalty should not be imposed. The appellants submitted that the total value of clearances of excisable goods of both the units was much less than the value of clearances for which exemption was granted. The appellants submitted a C/List under Rule 173B with full description of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or has approved the C/List, the department has to bear the consequences thereof. The ld. Consultant submitted that in the instant case right from the beginning, the appellants have been submitting C/List containing the description of goods showing them liable to payment of excise duty and this list was accepted and approved by the excise authorities, therefore, there was no suppression or misstatement of facts or collusion or contravention of provisions of Central Excise Act and therefore, the limitation would be only six months prior to the service of the show-cause notice. In support of his contention, the ld. counsel cited and relied upon the decisions reported in 1989 (44) ELT 552 : 1989 (25) ECR 47 (T) : 1993 (63) ELT 534 : 1993 (44) ECR 519 (T) and 1988 (35) ELT 605 : 1988 (17) ECR 401 (SC) : ECR C 1702 SC. 4. The ld. Consultant submitted that in the instant case, the facts were known to the department. The ld. Consultant submitted that right from the beginning of the units, they have been furnishing information to the deptt. regarding activities undertaken by them and therefore, there was no suppression or misstatement. In the circumstances, ld. Consultant submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of that omission or commission. The ld. constt. submitted that five years period cannot be made applicable just for any omission of the appellants unless it is deliberate to escape from payment of duty. In support of his contention, he cited and relied upon the judgments reported in 1995 (78) ELT 401 : 1997 (71) ECR 257 (SC) and 1995 (76) ELT 497 : 1997 (71) ECR 259 (SC). 7. The ld. Consultant submitted that availment of modvat credit by one unit was not fatal to avail duty free clearance at another unit. The ld. Consultant submitted that if modvat credit is availed of in regard to one tariff item, benefit of exemption under Clause (a)(ii) of the Notification is available if the benefit of modvat credit is not availed of in regard to other tariff heading. The ld. Consultant submitted that there is no bar to the availment of modvat credit when the appellants are also availing of the benefit of Not. No. 175/86-CE so long as the conditions are satisfied. The ld. Consultant submitted that exemption as SSI unit and modvat benefit can be availed of simultaneously by manufacturers but on different goods. In support of this contention, he cited and relied upon the decisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force in the arguments adduced by the ld. Consultant. We observe that for the period from 17.11.1988, there is no suppression or willful misstatement, therefore, having regard to the facts and submissions made and the case law cited and relied upon, we hold that the whole demand is time barred and is not sustainable in law. For the period prior to 17.11.1988 also demand cannot be enforced as the position was clarified on 17.11.1988 and therefore, the demand should have been raised within six months. Therefore, the demand for the period prior to 17.11.1988 is also not sustainable in law. 10. On the question of penalty, we find that though we have not considered the merits of the case, however, we find that for purpose of availing benefit of Notfn. No. 175/86-CE, the aggregate value of clearances of the two units should have been taken for purpose of determining rate of duty applicable. We also find that Notfn. No. 175/86-CE was very clear insofar as clubbing of the value of clearances of two units is concerned. In view of the totality of the circumstances and the facts of the case, we reduce the penalty of ₹ 50,000/- (Rupees Fifty thousand only). 11. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty is impossible on the appellants as held by the Member (T). Or Whether penalty is not imposable as held by the Member (J). 13. The issue referred to me is within a narrow compass. The two members were unanimous in their decision about demand being hit by limitation as there was no suppression or willful mis-statement on the part of the assessee leading to the short levy. Whereas Member (Technical) chose to reduce the quantum of penalty, the Member (Judicial) is of the opinion that imposition of penalty in the absence of the department's establishing contraventions of any provisions of law, is not justified. 14. Shri R. Swaminathan, ld. Consultant claimed that wording of the provisions of the proviso to Section 11A of CEA, 1944 is akin to the provisions of Rule 173Q(1)(d). Both require intent to be established. If it is held that the provisions of Section 11A are not invokable, then the same would apply to 173Q(1)(d) also. He stated that this belief is expressed in the following judgments: 1. Hind Cement Products v. Union of India reported in 1987 (32) ELT 636 (All.) : 1978 (13) ECR 439 (Alld.). 2. The State of Andhra Pradesh v. Shri Ganesh Bhavan Hotel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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