HARISH CHANDER,VICE -PRESIDENT -
(1.) M /s Taj Beverages Pvt. Ltd., Agra, has filed an appeal being aggrieved from the order passed by the Additional Collector of Central Excise Kanpur. The said appeal was presented in the Registry on the 17th day of October, 1991 Thereafter, a stay application, duly supported with an affidavit, was also presented in the Registry on the 8th day of January, 1991. The stay application was listed for hear, earlier and the Tribunal had disposed of the stay application vide Stay Order No. 129/9 A dated 2nd July, 1991, and had dispensed with the pre -deposit of the duty amount of Rs. 2,42,918.47 and penalty of Rs. 50,000/ - on the condition of the applicants depositing Rs. 1,20,000/ - (Rupees one lakh twenty thousand only) within eight weeks from the date of the receipt of the order. The said stay order passed by the Tribunal was challenged by the appellants before the Hon. Allahabad High Court, and the Allahabad High Court via Order dated 24th June, 1991, had set aside the order passed by the Tribunal. The operative part of the last para of the Allahabad High Court's order which appears of internal page 3 of the order, is reproduced below:
In view of the above discussion, we set aside the order passed by the Appellate Tribunal dated 2nd July, 1991 Annexure -4 to the writ petition with direction to the Appellate Tribunal to consider the point regarding the show cause notice being time -barred in a prima facie manner and to dispose of the application of waiver as well as the stay application in accordance with law. The petitioner will file a certified copy of this order before the Tribunal within two weeks fore today.
The petition succeeds and is allowed in part accordingly.
In view of the Hon. Allahabad High Court's direction, the matter has been taken up for hearing.
(2.) SHRI A.K. Jain, the learned Advocate, has appeared on behalf of the appellants He pleaded that while disposing of the stay application by the Tribunal, the Tribunal did not take into consideration the limitation aspect. He pleaded that the goods in dispute an aerated waters and the show cause notice was issued on 22nd July, 1989 and it was received by the appellants on 31st July, 1989. The period involved is May 1986, September 1987, and the appellants' factory was raided in January, 1988. Shri (sic) pleaded that the department took almost one and a half years in issuing the show cause notice and the activity of the appellant was well within the knowledge of the department He pleaded that the duty amount involved is Rs. 2,42,918.47 and penalty of Rs. 50,000/ -Shri Jain, learned Advocate, pleaded that the department was well aware of the activities of the appellant as there were repeated and periodical inspection by the department including the audit parties. He laid special emphasis on pages 35, 36 and 38 of the paper book. Shri Jain stated that in para No. 8 to the reply to the show cause notice it was duly mentioned that excise accounts as well as ledger accounts including bills, ledgers, cast books were duly scrutinised by the internal audit parties of the Central Excise Collectorate, Kanpur and also the audit parties of Accountant General UP, Allahabad and there was no discrepancy in the accounts of the appellants and there was no mention of the same in the show cause notice. He also referred to the record of personal hearing which appears on page 38 of the paper book and in the record of personal hearing before the Additional Collector, there is a mention that the accounts were subjected to audit a number of times and necessary information was submitted as and when called for. He pleaded that the adjudicating authority has not mentioned about the audit memos in the adjudication order. He pleaded for the grant of stay. He also argued that the plea of time bar was taken all along before the adjudicating authority as well as before the Tribunal then earlier stay application was disposed of by the Tribunal. Shri Jain, in support of his judgment, relied on a decision of the Delhi High Court in the case of Ganesh Rolling mills v. CC . He laid special emphasis on para No. 15 of be said judgment where the Hon. High Court had held that in case a pleading has been lade, but not disputed, it is deemed to be admitted by the doctrine of non traverse. He lade a prayer for the modification of the earlier order passed by the Tribunal and leaded again for the grant of stay.
(3.) SHRI Satish Kumar, learned JDR, who has appeared on behalf of the respondent, thirly stated that the appellant had taken the plea of time bar before the lower authorities and the adjudicating authority, while disposing of the matter, had taken into consideration the limitation aspect. He drew the attention of the Bench to para No. 11 of the Order -in -Original and stated that the visit of the audit people, it cannot be attributed that the activity of the applicant was well within the knowledge of the department He stated that in the statutory documents, viz., RT -12 etc. there was no mention of the audit (sic) and in support of his argument, he cited a decision of the Supreme Court in the case of Mysore Rolling Mills v. CC (sic) , where the Hon. Supreme Court had held that the assessee had been issuing separate notes in respect of handling charges, and there was no (sic) in the statutory documents, the Supreme Court took the view that there was suppression of facts on the part of the appellant. He laid special emphasis on para Nos. 1 and 5 of the said judgment. He pleaded for the rejection of the stay application.
We have hoard both the sides and have gone through the facts and circumstances of the case. We have looked into the order passed by the adjudicating authority. Para No. 11 which appears on the internal page 9 of the impugned order from the said judgment (sic) reproduced below:
11. It is, therefore, established that the assessee failed to submit correct prices of the goods on gate passes and to pay correct amount of duty in violation of provisions of Rule 173 -F of Central Excise Rules, 1944 in as much as they neither submitted the debit notes to the department nor disclosed the fact of collection of additional amount on account of publicity and advertisement from the dealers through debit notes. On the contrary, he declared the prices @ Rs. 16/ - for Aerated Water (Sweetened) and Rs. 26.50 for Mango Juice 'Funday' by mis -utilising the benefit extended to SSI units violating the provisions of Rule 173 -C(11) of Central Excise Rules, 1944. The party thus suppressed the fact of collection of additional amount and thereby suppressed the correct value with intention to evade the payment of Central Excise Duty and thus the provisions of Section 11 -A for extended period of 5 years are applicable in this case. I found no logic in the submissions made by the party that the Department came to know the full facts on 12.1.1988 i.e. the date on which the records were resumed. It will be clear from perusal of records and records submitted by the party along with RT -12 and records submitted in their defence that the party had suppressed the material fact of collection of additional amount by way of debit notes and so the relevant date for the purpose of limitation under Section 11 -A of Central Excises and Salt Act, 1944 is the date of clearances and not the date of resumption of documents from the party. Thus, I hold that provisions of extended period of 5 years are applicable to the case.
A simple perusal of the same shows that in the RT -12 returns, there was no mention of the debit notes. Hon. Supreme Court in the case of Jayashree (sic) Engineering Co. v. CCE , had held that visit of the Central Excise officers cannot attribute to the knowledge of the revenue authorities. we have also looked into the decision of the. CCE v. Camphor Drugs and Laminents (sic) reported in 1989 (40) ELT 279 : 1989 (21) ECR 182 (SC) : ECR C 1364 SC. ;