Full Judgment
During the period from June to August 1988, the appellant removed its produce after paying duty at the rates applicable to pipes and tubes produced from indigenously manufactured iron and steel. A show cause notice was issued on 2.7.93 alleging that the record of the assessee showed that it had been receiving imported iron & steel and the pipes attracted higher rate of duty as they were produced from imported materials. The appellant resisted that demand but failed in adjudication. When that matter came up in appeal before Commissioner (Appeals), the appellant did not contest the demand. It only contested the demand on the ground of limitation as well as penalty and interest Therefore, the Commissioner did not go into the merits of the case at all. The present appeal is directed against that order-in-appeal of the Commissioner.
3. Before us, the learned Counsel seeks to re-open the issue on merits.
This cannot be permitted, since the appellant had conceded the issue before the lower authorities and for that reason the lower authorities had not gone into it. Particularly, so since it is a question of fact.
4. As to the issue of limitation, we find that appellant's duty paying documents did not at all mention the source of the inputs, while that was the crucial issue in relation to rate of duty. No mention about the source of the inputs was made in the classification declaration filed also. These were the grounds taken by the lower authorities for holding that relevant material was suppressed with intent to evade duty. That finding cannot be faulted in the facts of the case. Therefore, we uphold the order in so far as it relates to limitation also.
5. Coming to the question of penalty, the submission is that as the demand related to the year 1988, equal amount of penalty was not mandated. The learned Counsel has also submitted that since the show cause notice did not mention specify the clause of Rule 173Q, penalty imposed is required to be set aside. This contention is raised relying on the decision of the Hon'ble Supreme Court in the case of Amrit Foods v. C.C.E., U.P. 2005 (190) ELT 433 (SC). We may read the relevant observation in that judgment.
5. The Revenue has preferred an appeal from the order of the Tribunal setting aside the imposition of penalty under Rule 173Q of the Central Excise Rules, 1944. The Tribunal has set aside the order of ''the Commissioner on the ground that neither the show cause notice nor the order of the Commissioner specified which particular clause of Rule 173Q has been allegedly contravened by the appellant.
We are of the view that the finding of the Tribunal is not correct.
Rule 173Q contains six clauses the contents of which are not same.
It was, therefore, necessary for the assessee to be put on notice as to the exact nature of contravention for which the assessee was liable under the provisions of the 173Q. This not having been done the Tribunal's finding cannot be faulted. The appeal is, accordingly, dismissed with no order as to costs.
6. Learned Counsel has also submitted that the appellant had not conceded the case on merits before the lower authorities and the Commissioner was in error in recording such a submission. We are not able to accept this position. First of all, if there was an error on the part of the Commissioner in recording the contention, the assessee should have raised that matter promptly before the appropriate forum.
Secondly, that ground should have been taken at least in the present appeal filed before the Tribunal. We find no such objection in this appeal. Thirdly, learned Counsel is not in a position to raise this objection (Sic) as he had not represented before the ld. Commissioner.
7. The submission of the learned SDR on the issue of specifying the relevant clause of Rule 173Q is that the requirement in law was that the assessee is made aware of the alleged violation of the law. It is being pointed out that the show cause notice very specifically had alleged that relevant particulars were suppressed from the classification declaration as well as clearance documents (gate passes). It is, therefore, the contention of the learned SDR that the requirement of law is satisfied and the observations of the Apex Court in the case of Amrit Foods (supra) are satisfied.
8. We are in agreement with the contention of the revenue. The short question in the present case was whether the fact of production of the pipes from imported goods was disclosed to revenue. Duty paying documents, namely, gate passes and classification declaration which is the declaration relating to rate of duty, both did not disclose the source of raw materials, while the rate of duty depended entirely on that fact. In this factual situation, the revenue is right in contending that there is deliberate suppression of facts, which attracts penalty. We, therefore, uphold the imposition of penalty.
However, taking all the facts and circumstances into account, penalty is reduced to Rs. 1,00,000/-(rupees one lakh only).
9. With regard to the demand for interest, the submission of the learned Counsel is that demand has been made under Section 11AB. It is being pointed out that such a demand is clearly contrary to Sub-clause (2) of Section 11AB itself. There is merit in this contention. However, that does not settle the dispute relating to interest. It is well settled that statutory interest will be attracted irrespective of whether the claim has been specifically made in the orders or not.
Therefore, revenue will be at liberty to claim interest as permissible under the statute at the rates in force during various periods.