Decided on October 14,1991

Atlas Paper Mills Pvt. Ltd. Appellant


P.K. Desai, Member (J) - (1.) THIS appeal is directed against the Order -in -Original No. 10/MP/SRT Addl. Collr./1991 dated nil communicated on 15 -2 -1991 of the Additional Collector of Central Excise, Surat, confirming demand restricted to Rs. 4908.29 and imposing personal penalty of Rs. 2000/ - on the appellant, vide Rule 173Q(1) of the Central Excise Rules.
(2.) THE Central Excise Officers of Headquarters, Baroda, on 23 -11 -1984 visited the factory premises of the appellants, as also of two Transport Companies, namely M/s. Shri Laxmi Transport Co., Vapi and M/s. Taj Associates, Vapi, and inspected the records. The inspection resulted in recovery of ten transport receipts, which appeared to have been issued without Central Excise G.P.I, and it appeared that 50,654 Kgs of paper and paper boards were removed by the appellants without payment of duty during the financial year 1981 -82 to 1984 -85. Statements of the persons concerned both, at the appellants factory premises as also at the concerned transport companies, were recorded and ultimately the show cause notice dated 5 -12 -1985, was issued by the Superintendent specifying the details of the Transport Receipts and other connected points, showing how duty evasion was suspected, and duty at the appropriate rate was demanded. The notice contained allegation of fraud, wilful mis -statement and suppression of fact. The matter was adjudicated upon by the Deputy Collector, after receiving the reply and giving personal hearing and he, vide his order dated 18 -7 -1987, directed recovery of duty at appropriate rate for the quantity held by him, to have been removed without payment of duty and also imposed personal penalty of Rs. 10,000/ -. The appellants, thereupon, went in appeal, before the Collector of Central Excise (Appeals), who, vide his order -in -appeal No. GSM -265/89BD dated 27 -2 -1989 held that Section 11A of CESA, 1944, had stood amended since 27 -12 -1985 and when suppression etc. were alleged and extended period was invoked, by virtue of Section 8 of the Amending Act, the Deputy Collector ought to have transferred the matter to the Collector, Central Excise, as he had ceased to have jurisdiction to adjudicate, and passed the order "In view of the aforesaid discussion, I set aside the impugned order and direct the Deputy Collector to transfer the case to his Collector for such an action as he may deem fit in the matter under the law." Pursuant thereto, the Superintendent attached to the office of the Adjudicating Collector, Headquarters Vadodara, issued a show cause notice dated 1 -8 -1989 to the appellants intimating the date and requiring the appellants to appear before the Additional Collector for personal hearing on that date, making a specific mention therein that fresh hearing was being given pursuant to the order of Collector (Appeals). The appellants, vide their letter dated 9 -8 -1989, raised an issue of Res Judicata, and in reply dated 1 -9 -1989 the Department informed the appellants, that the Collector (Appeals) had directed transfer of the case, and as such, it was only the order -in -original that was set aside, restoring the position as it existed before passing of the said order. Subsequently, vide letter dated 6 -8 -1990 the Additional Collector herself informed the appellants that the matter was entrusted to her and that the appellants might file their reply to the show cause notice dated 5 -12 -1985. The matter was thereafter, adjudicated upon, and the impugned order was passed. In the impugned order, the Addl. Collector, giving benefit of doubt, dropped the demand in relation to seven out of ten transport receipts, but held that there was no evidence for due payment of duty in relation to three transport receipts viz. TR 613, dated 6 -8 -1982, TR 688, dated 25 -4 -1984 and TR 582, dated 12 -10 -1982 and demanded Rs. 4908.29 towards the duty and also imposed Rs. 2000/ - by way of penalty vide Rule 173Q(1) of the Central Excise Rules.
(3.) MR . M.H. Patil, the Ld. Advocate for the appellants, raising a legal ground, pleaded that, when the Collector (Appeals) set aside the order of the adjudicating authority (Assistant Collector), the entire proceedings stood vitiated and as such the show cause notice which formulated the basis for the said proceedings, stood annulled and that initiating of fresh proceedings by the Additional Collector on the same show cause notice was de hors the basic principles of law, and as such, the entire adjudication is bad in law. To substantiate his submission that the original show cause notice stood non -existent, the Ld. Advocate referred to the decision reported in (i) 1990 (47) E.L.T. 588, (ii) 1986 (23) E.L.T. 187, (iii) 1987 (31) E.L.T. 545 and (iv) 1978 (2) E.L.T. (J 613). Submitting on the merits, he pleaded that the adjudicating authority had relied upon the sole evidence of the Transport Company, which could not have been done. He also submitted that due explanation about the subject transport receipts was also given. Elaborating the submission, he pleaded that in case of subject transport receipts, the consignments were initially despatched to one party who accepted only a part thereof, and the balance of unaccepted consignment was diverted to another party by drawal of separate invoice, but without any charge in the GP -1 as the goods were diverted without being brought back to the factory. He also stated that the department did not investigate on the explanation furnished. He also pleaded that the appellants were paying more than Rs. 18000/ - annually towards the duty, and would not commit fraud for such a petty amount. Ms. Lipika Majumdar Roy Choudhury, the Ld. SDR, on the other hand, pleaded that the legal objection raised was entirely besides the point, as here, vide the order of Collector (Appeals) only the order of Deputy Collector as adjudicating authority was set aside, with a further direction to transfer the matter to Collector for adjudication, and that the order did not convey that the entire proceedings were quashed. She also invited my attention to the reply given by the department, where the issue of bar of Res Judicata was raised initially by the appellants. On the merits the Ld. SDR submitted that wherever there was probable co -relation between TR and duty paying documents, the adjudicating authority did withdraw the demand.;

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