Decided on October 31,1991



K.Shankararaman, - (1.) M/s. Shree Hanuman Jute Mills filed this appeal against the Order dated 31-1-1989 passed by the Collector of Central Excise (Appeals) upholding the order passed by the Deputy Collector of Central Excise as far as demand of duty on shortages was concerned.
(2.) Shri P.K. Das, learned Advocate and Shri R.M. Das, learned Consultant appeared for the appellants. The learned Consultant referred to the contentions raised in their appeal memorandum and stressed the point that the notice for duty was hit by bar of limitation. The shortage in question had been figuring in their records right from 1976. The matter had been dealt with in earlier proceedings when the Collector (Appeals) had set aside the first order of the Deputy Collector and remanded the case to the Assistant Collector for de novo adjudication. The Deputy Collector had gone beyond the scope of the remand order while readjudicating the case. The Collector (Appeals) had remanded the matter to the Deputy Collector for deciding the limited question whether the shortage was the one already disclosed in 1976. They had raised the plea of time bar. This point had not been considered by the Deputy Collector. It was not open to the Collector (Appeals) while deciding their appeal against this second order of the Deputy Collector to take a view different from the one taken by his predecessor in deciding their first appeal. Reliance for this proposition was placed by the learned Counsel on the decision of the Tribunal in Himachal Steel Kandrori v. Collector of Central Excise, Chandigarh reported in 1988 (37) E.L.T. 291. In the earlier Order-in-Appeal the demand was held to be time-barred and a contrary view is not possible in the de novo decision, the question of the demand being time-barred having been decided in the first Order-in-Appeal and that decided question not being at large for decision in the de novo adjudication on remand. But the Deputy Collector had confirmed the time-barred demand and in addition imposed penalty. The Collector (Appeals) had confirmed this irregular order. This is not permissible. The learned Counsel, therefore, pleaded that their appeal be allowed. Shri M.N. Biswas, learned Senior Departmental Representative replied to the above arguments. He stated that the Collector (Appeals) had remanded the case to the adjudicating authority for de novo adjudication as the original order was non-speaking. In the de novo adjudication this aspect was taken care of and a proper order on merits was passed. The shortage was there which the appellants had failed to account for. Their explanation that 1.225 Metric Tonnes was due to calculation error and due to rounding off of the fractions and 1.604 Metric Tonnes represented the production of the previous day which was lying in the floor was not accepted by the Deputy Collector in the de novo adjudication order. The stock-taking was conducted in the presence of their staff. They accepted the shortage and had not taken the plea now taken. The major quantity of shortage is 38 Metric Tonnes which represented the difference between the physical stock and the stock as per the Registers. The shortage was detected as a result of stock-taking conducted in 10-1-1986. The report was signed by the appellants without any protest. The demand is not hit by limitation. He concluded his arguments with the plea that the appeal be dismissed.
(3.) I have considered the arguments advanced by both the sides. I have gone through the appeal memorandum and the two orders of the Deputy Collector and the two orders of Collector (Appeals). In the first Order-in-Appeal dated 13-10-1987 passed by the Collector (Appeals), he found considerable force in the submission of the appellants that the reason for the difference noticed in the stock challenge conducted on 10-1-1986 was the non adjustment of stock-taking loss for 1976. In the adjudication order, the Deputy Collector had dropped the charge of surreptitious removal without payment of duty. The Collector (Appeals) had stated in his order that the dispute was not in respect of the shortage detected in stock challenge but in respect of accounting for such difference. He had observed that the adjudicating authority had noticed the losses having occurred in stock-taking from records but had not commented on the point raised by the appellants for the same. On the allegation of surreptitious removal or any deliberate intention for evasion of duty he should have examined the records and furnished a clear observation thereon in respect of the appellants submissions. He found that the adjudication order was clearly a non-speaking one in respect of the goods found short in stock challenge with goods shown short earlier. The order of the Deputy Collector was set aside and the matter remanded for a decision afresh after verification of the records in respect of the submission of the appellants for such difference after indicating a clear observation thereof.;

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