9911796707
TMI Blog2000 (10) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... are not maintainable. The contention with regard to duty liability is that the said duty demand made for the period September 1981 to February 1983 is not maintainable inasmuch as the duty demand for the period July 1973 to February 1983 i.e. inclusive of the period covered by the present order, had been finalised by the jurisdictional Assistant Collector fixing a duty liability of Rs. 387 crores. That order was taken up in appeal and the Commissioner (Appeals) directed the adjudicating authority to re-compute the tax liability in the light of the principles enunciated by the Supreme Court in the case of Government of India v. Madras Rubber Factory Ltd. [1995 (77) E.L.T. 433 (S.C.)]. On re-computation, the tax liability was found to be Rs. 21.58 crores and that amount was deposited by the assessee. The Revenue having not challenged the said finalisation of provisional assessment, the order became final and it was not open to the Revenue to pass another order for a part of the period. During the hearing of the case, the learned Counsel for the appellants took us through the chequered history of the dispute in detail and submitted that the assessment of the cigarettes produced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity in respect of show cause notice dated 1-10-1986 was not competent to delegate the issue to the Assistant Collector. 4.On a perusal of the records and consideration of the submissions made by both sides, we are clear in our minds that the duty demand made in the show cause notice dated 1-10-1986 for the period September 1981 to February 1983 had merged in the finalisation of provisional assessment made by the Assistant Collector. The operative portion of the order-in-original No. 17/91 dated 27-3-1991 passed by Collector of Central Excise, Delhi read as under :- "He may use the material contained in the instant show cause notice (show cause notice dated 1-10-1986) as independent material to support the final assessment after according an opportunity to the manufacturer/other parties concerned to meet the case and after considering the cause shown. He is further directed to intimate the undersigned as soon as he completes the said provisional assessment. Thereafter this show cause notice will be taken up for adjudication". From this, it is clear that the Collector had left the duty demand raised in the show cause notice dated 1-10-1986 also to be included in the finalisation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the removals of the goods were made from the factory after the consignments had been duly assessed by the proper officer. It is, therefore, their contention that no removals had taken place in contravention of the provisions of Rule 9(1) and therefore, occasion for imposing penalty under Rule 9(2) did not arise at all. The appellants have relied on the decision of the Supreme Court in N.B. Sanjana, Assistant Collector of Central Excise, Bombay and Others v. The Elphinstone Spinning and Weaving Mills Co. Ltd. [1978 2 E.L.T. (J399)] in support of this contention and has held that penalty under Rule 9(2) was invokable only in cases of clandestine clearances. 6.The learned Counsel for the Revenue has vehemently opposed that contention raised by the appellants against imposition of penalty. He submitted that show cause notice dated 1-10-1986 had been issued after thorough investigations and upon unearthing evidence that the appellants were carrying out clandestine activities to evade Central Excise Duty. The notice was, therefore, issued invoking the proviso to Section 11A of the Central Excise Act which related to recovery of duty in cases involving fraud, collusion, suppression and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moping up the extra amount. The learned Counsel for the Revenue submitted that in view of the judgment of the Delhi High Court in the appellants' own case and the decision of the CEGAT in ITC's case, the submission of the appellants that no penalty could be imposed on them has no validity. The learned Counsel submitted that this is a case of wilful mis-representation of facts and evasion of duty by a deliberate scheme to commit fraud. He, therefore, submitted that imposition of penalty had been correctly done. 7.From the perusal of the records and consideration of the submissions made by both sides, we find that appellants' plea against imposition of penalty has no force. The High Court of Delhi has clearly held [1989 (39) E.L.T. 511] that finalisation of provisional assessments and proceeding for recovery of fraudulently evaded Central Excise Duty are entirely separate proceedings. Therefore, if the charge of evasion of duty by fraudulent methods is found to be correct, penalty is rightly imposable even in a case of provisional assessment. Such penalty is also imposable under Rule 9(2) on an assessee working under physical control. This is now well settled in view of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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