COLLECTOR OF CENTRAL EXCISE Vs. GAMMON FAR CHEMS LTD.
SUPREME COURT OF INDIA
COLLECTOR OF CENTRAL EXCISE
Gammon Far Chems Ltd.
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(1.)These appeals arise from the Judgement and order (being Final Orders Nos. 82 to 85 of 1994-C) of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeals Nos. E-899, E-475, E-360 of 1988 and E-355 of 1989-C dated 19-1-1994. Civil Appeals Nos. 8022-25 of 1995 are filed by the assessee M/s Gammon Far Chems and Civil Appeals Nos. 11996-99 of 1995 are filed by the Revenue.
(2.)The assessee is a division of M/s Gammon India Ltd. and manufactures sulphuric acid falling under Tariff Item 14-G and aluminium and sodium silico fluoride falling under Tariff Item 68 of the erstwhile Central Excise Tariff. M/s Freyssinet Prestressed Concrete Co. Ltd. is a subsidiary of M/s Gammon India Ltd. which manufactures prestressing equipments, neoprene, bearing pad, anchorage cone, hand grout pump, hydraulic jack and sliding bearing falling under Tariff Item 68 of the Central Excise Tariff. The assessee availed the benefit of Notification No. 85/85 dated 17-3-1985 in respect of the goods cleared by it from its factory during the year 1984-85. On 17-8-1987, the Collector, Central Excise, Bangalore, issued a show-cause notice to the assessee as to why exemption availed by it during the year 1985-86 (sic) under the aforementioned notification should not be withdrawn and the duty on excisable goods in respect thereof should not be demanded. The proviso to Section 11-A of the Central Excise Act is to get over the period of limitation specified in the main section. The show-cause notice was mainly on the ground that M/s Gammon Far Chems has also availed the benefit of the notification and the aggregate value of M/s Freyssinet Prestressed Concrete Co. Ltd. and M/s Gammon Far Chems exceeded Rs 75 lakhs during the year 1984-85 and, therefore, the exemption under the said notification was wrongly availed. It was alleged that the assessee did not disclose the fact of its being a division of M/s Gammon India Ltd. and also the fact that M/s Freyssinet Prestressed Concrete Co. Ltd. is a subsidiary of M/s Gammon India Ltd. which has almost full financial interest in it. The assessee replied to the notice stating that the fact of the assessee being a division of M/s Gammon India Ltd. is apparent from the classification list and the letters addressed to the Excise Authorities. It took the plea that there was no requirement under the law to disclose the subsidiary companies of M/s Gammon India Ltd. of which the assessee is a division. The Collector took the view that the clearance of goods by both the assessee as well as M/s Freyssinet Prestressed Concrete Co. Ltd. should be clubbed and that there was suppression of fact which enabled him to invoke the proviso to Section 11-A of the Central Excise Act. Dissatisfied with the order of the Collector, assessee went in appeal before the Tribunal. By order dated 19-1-1994, the Tribunal held that there was no suppression of fact by the assessee and, therefore, the proviso to Section 11-A was not attracted; however, it found that the clearance of goods by both the assessee as well as M/s Freyssinet Prestressed Concrete Co. Ltd. have to be clubbed and, in that regard, upheld the demand for a period of six months. It is against that order, the aforementioned appeals have been filed.
(3.)Mr K. Swami, learned counsel appearing for the Revenue contends that in view of the finding of the Tribunal that the clearance of goods by both the assessee as well as by M/s Freyssinet Prestressed Concrete Co. Ltd. has to be clubbed, the necessary corollary would be that there has been suppression of fact and, as such, the Tribunal should have upheld the order of the Collector invoking the proviso to Section 11-A of the Central Excise Act. He relied on para 2 of the notification in support of his contention. Mr Ravindra Bhat, learned counsel appearing for the assessee contends that the finding recorded by the Tribunal is without any basis in the show-cause notice and, therefore, it is not a valid finding; the Revenue did not place the case on the basis of para 2 of the notification, therefore, the assessee was taken by surprise as such; on the basis of the show-cause notice, the Tribunal was right in coming to the conclusion that the proviso to Section 11-A of the Central Excise Act was not attracted.
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