BHUVANESWARI CHEMICALS Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) THIS appeal is directed against one order dated 8-2-1988 passed by the Collector of Central Excise, Bangalore by which he had demanded from the appellants duty of Rs. 1,51,543.36 under Rule 9(2) of Central Excise Rules read with Section 11A of the Central Excises & Salt Act, 1944 besides imposing a penalty of Rs. 15,000/- under Rules 9(2), 52A, 173Q and 226 of the Central Excise Rules.

(2.) The brief facts are that the appellants who are manufacturing Ethyle Acetate is a partnership firm and filed declaration on 5-5-1987 with the jurisdictional Superintendent of Central Excise along with a letter stating that they had purchased the firm from the previous management and formed a partnership firm on 24-5-1986 and were manufacturing Ethyle Acetate from May 86 to March 87 and that they did not take out a Central Excise Licence due to ignorance as they were new and requested for issue of a Central Excise Licence and also guide them about the formalities to be followed. The Department gathered information to the effect that the firm had manufactured and cleared same goods during the period 1985-86 in excess of the exemption limit under Notification 175/86 applicable to the Small Scale Industries Unit. The Departmental officers visited the firm on 6-5-1987. Shri D. Suresh, one of the partners of the firm was present who said that they did not follow the Central Excise procedure as already declared by them nor had they obtained a licence. He said in his statement dated 8-5-1987 that on 24-5-1986 he and Shri Prakashchand entered into a partnership and purchased the said firm on 10-5-1986 from Smt. S.G. Subbalaxmi and Shri Dinesh Kumar of Bangalore and that prior to their purchasing the said firm, same goods were being manufactured by the firm. The Department conducted enquiries with the Sales Tax Authorities and found that the firm had cleared excisable goods valued at Rs. 21,53,547.70 during the year 85-86 and goods worth Rs. 44/- lakhs during the year 1986-87. It is in these circumstances following further investigations, proceedings were instituted against the appellants which culminated in the Collector's order against which the present appeal has been filed.

(3.) HEARD Shri K.K. Bhatia, the learned S.D.R.