Shiv Kumar Sharma, J. - (1.) Challenge in this appeal is to the order dated January 6, 1994 of learned Single Judge whereby the additional demand of excise duty raised by appellants against the respondent was held without legal sanction. Contextual facts depict that the respondent company, having its unit in RIICO Industrial Area Bhiwadi, Alwar, was manufacturing medicines containing alcohol from August 27, 1987 and was paying excise duty to the State of Rajasthan. The products of the company were liable to excise duty under the Medicinal and Toilet Preparation (Excise Duties) Act, 1955 (for sort '1955 Act') and rules made thereunder. The company functioned under physical control of the Excise Officer posted there and clearance of the products was made on realisation of excise duty under 1955 Act on the issue of prescribed transport permit in Form TPI. The company slopped manufacturing medicines for the time being from August, 1992. The Demand notice (PIA) dated July 9, 1993 was served on the company on July 12, 1993 showing a short payment of duty to the tune of Rs. 3,06,60,870.89 by declaring wholesale price at lower rated than the actuals. The Company contended that prior to raising demand no show cause notice was issued, there was no determination or calculation of the deficiency in duty and the demand was raised in an arbitrary manner in violation of principles of natural justice. There were many grounds to challenge the demand including that of limitation.
(2.) The appellants filed reply to writ petition and stated that show cause notice was issued on May 27, 1993, but no representation was submitted by the company, after issuing show cause notice enquiry was conducted by the Committee constituted by the Excise Commissioner. Thereafter the demand notice dated July 9, 1993 was issued in accordance with the principles of natural justice. It was also contended that the company had deliberately concealed the show cause notice.
(3.) Learned Single Judge having heard rival submissions considered the ratio indicated in M/s. MCDowell & Company Ltd. vs. Commercial tax Officer ( : AIR 1986 SC 649) and Commissioner of wealth Tax Gujarat vs. Arvind Narottam (Indl.) ( : AIR 198 SC 1824) and made following observations in the impugned judgment: - - The above two judgments reflect judicial attitude towards the tax avoidance device or tax evasion cases. If proper and requisite material had been brought on record by the revenue to establish the plea that the assessee deliberately mis -stated less price of the goods than the actuals charged from M/s. Alchem Laboratory Ltd. and M/s. Anglomad Pvt. Ltd and by this device it avoided payment of full excise duty, the same would have been examined by this Court and relief might have been refused to the petitioner incase that situation was found to exist. However, no such facts are on the record except the oral argument made by Mr. Rathore that it was a case of mis -statement of the price than the actuals charged by the assessee at the time of sale of the goods and by this device it paid less excise duty. If the revenue feels that the present case of this type, it shall be free to make necessary enquiry in the matter, if it so desires in accordance with law.;