TMI Blog2005 (10) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... d assumptions appears to hold water in the light of the fact that no other evidence exists to establish clandestine removal. On top of it statements of partners of the firms were not recorded and the details of electricity consumption were not even furnished to the appellants. In the light of this it is not possible to uphold the Commissioner's contention that the appellants evaded additional duty of excise on the said quantity. Thus, both on limitation as well as on merits the order fails. Since the demand itself is unsustainable we need hardly to say that penalties are unsustainable. Even otherwise it is a settled legal position that penalties under the provisions of Central Excise Act and Rules cannot imposed when the Additional Duti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of P.D. Desai and that of the Proprietor of M/s. Oswal and some customers. After completion of investigation a show cause notice was issued proposing to recover additional duty of excise and handloom cess alleged to have been evaded by clandestinely removing MMF to the tune of 28,00,420.05 Sq. Mtr during the period October, 1988 to May, 1993. The show cause notice also proposed to confiscate the plant and machinery and to impose penalties. It is evident from the notice that it was M/s. Oswal who were required to show cause to the Commissioner. Nowhere in the show cause notice, the present appellants or its partners were asked reply to the appellants made in the notice. The department however marked the copies of the show cause notice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Dye Works) were the ones, who had control over the mills during the period October, 1988 to March, 1993 a corrigendum dated 27-11-1998 was issued to the original show cause notice asking Mukesh Dye Works to reply to the allegations and this corrigendum was received by them on 11-1-1999. Through this corrigendum the appellants were required to show cause as to why the duty of Rs. 23,93,843/- should not be demanded along with penalty on the quantity of MMF alleged to have been removed from the factory without payment of duty during the period October, 1988 to 1993. 4. The appellants in response to the corrigendum furnished their reply claiming that the show cause notice dated 28-10-93 was served upon them only in 3-10-1997 and the corrigend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Printing was formerly known as M/s. Mukesh Dye Works and therefore it should be deemed that the show cause notice was addressed to the latter; that the appellants were aware of their role in the clandestine removal; that the fact that the appellants were not specifically asked to show cause only amounts to a technical error; that a reading of the show cause notice clearly indicated that it was M/s. Mukesh Dye Works who were being accused of removing goods without payment of duty; that with consumption of every unit of electricity 3 sq. mtrs. Processed fabrics were produced and going by the records of electricity consumption the department had correctly arrived at the total quantity produced; and the quantity on which duty was evaded; that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two partners of M/s. Mukesh Dye Works. The appellants contention that under Section 37C(1) of Central Excise Act the, the Service of notice is complete only when copy of such notice is delivered to the person to whom it is addressed or to the authorized agent is not refutable. Mr. P.D. Desai was neither an authorized agent nor he was an employee of the appellants when the copies of the notices were given to him. The appellants contention that the notice was not served on the appellants has to be therefore accepted. [1988 (38) E.L.T. 573 (S.C.), 1995 (80) E.L.T. 280, Allahabad refers] it is also argued that mere marking of the copy of the show cause notice does not make a person receiving such a copy an respondent unless he/she is asked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely going through electricity bills. The Departments' version is further weakened by the fact that alleged buyers of the goods were not produced for cross examination. The appellants argue that the Department's case is based on presumption and assumptions appears to hold water in the light of the fact that no other evidence exists to establish clandestine removal. On top of it statements of partners of the firms were not recorded and the details of electricity consumption were not even furnished to the appellants. In the light of this it is not possible to uphold the Commissioner's contention that the appellants evaded additional duty of excise on the said quantity. Thus, both on limitation as well as on merits the order fai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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