UNION OF INDIA Vs. PREM CABLES (P) LTD

JUDGEMENT

(1.) This application under Section 35H(i) has been filed by the Department against the final order of the learned Tribunal dated 8-11-2000, negativing the claim of the Department, about the assessee having mis-declared the article as aluminium plates, through M/s. P.G. Foils as, as a matter of fact the article was unwrought aluminium.

(2.) The facts of the case are, that the officers of the Department visited the factory of the respondent assessee during 8-1-1992 to 11-1-1992, and found, that the assessee was availing Modvat credit on aluminium plates, falling under sub-heading 7606.10 of the Central Excise Tariff Act, 1985 on the central excise gate passes, issued by M/s. Padmavati Metal Industries and M/s. Prakash Metal Works, both of Ahmedabad. These units issued gate passes in the name of M/s. P.G. Foils Ltd. which later on endorsed the same in favour of the assessee. The visiting officers physically verified the article, and noticed, that the inputs did not fit within the definition of "aluminium plate" given in the Chapter note 1(d) of Chapter 76 of Central Excise Tariff Act, 1985. These articles were claimed by the assessee to be used as input (excise duty paid input) and the assessee was claiming Modvat credit on the manufactured goods, with respect to the excise duty paid on these articles. According to the Department these inputs found in the factory premises were confirming to the specifications of unwrought aluminium, appropriately falling under classification sub-heading No. 7601.90. Some representative samples of the inputs were drawn, and were got examined by the Principal, Malvia Regional Engineering College, Jaipur, who reported, that the sample is not wrought, and then enquiry was conducted at Ahmedabad, from the producers of the input, who revealed, that the input was manufactured by melting the aluminium scrap, and pouring the molten metal into moulds. The product obtained was in rectangular shape, which was cleared as aluminium plate, under sub-heading 7606.10 on payment of 35% advance duty, and this was deposed to have been supplied to M/s. P.G. Foils. Credit of the duty paid by the Ahmedabad unit was taken by the assessee, although the product received in actual i.e. unwrought aluminium, which was not declared by them in their Modvat declaration submitted under Rule 57-G of the Rules. Thus, the receipt of the product, received in their factory premises was alleged to have been suppressed by them wilfully, and credit of Central Excise duty was incorrectly availed by the assessee amounting to Rs. 65,44,206,90.

(3.) Thereupon a show cause notice was issued, to which a reply was submitted, and the learned Collector, Central Excise confirmed the demand of Central Excise duty, amounting to Rs. 65,44,206.90 against the assessee respondent, and a penalty of Rs. 5 lacs was also imposed under Rule 173Q(1)(bb).