Associate Paper Pvt. Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. this appeal is directed against the order-in-appeal dated 30.04.2004 wherein the order-in-original confirming the demand, imposing penalty and confiscating the goods was upheld.2. considered the submissions made at length by both sides and perused records. i find that the appellant factory was visited by the officers on 04.08.1997 and have found that some excess goods were not accounted in statutory book records. the said goods were seized on 4.8.1997 and handed over to the appellant for safe keeping. show cause notice was issued to the appellant for confiscation of such goods which were found in excess and also for the demand of the duty of the goods allegedly cleared without payment of central excise duty for the period 1.1.1997 to 1.8.1997. the whole confirmation of the demand of duty was based on the excess consumption of raw material and the losses, being far more in excess than the industry norms.3. the appellant in this case are claiming that the issue is time.barred. the said show cause notice dated 29.1.1998 was handed over to the appellant on 9.3.1998 by the office of superintendent of central excise. it is very clear that the confiscation of the goods (which were seized on 4.8.1997 was sought, in the show cause notice which was handed over to the appellant on 9.3.1998. since the show cause notice is issued beyond the period of six months for the confiscation of the goods seized and in the absence of any extension, granted for issuing the show cause notice in respect of the seized goods, i find that the goods cannot be confiscated. in respect of the demand worked out regarding the goods removed without payment of duty for the period from 1.1.1997 to 1.8.1997, i find that the appellant have vide their letter dated 22.8.1996, addressed to the superintendent of central excise clearly mentioned that there are heavy losses in manufacturing of their final product i.e. mill board and kraft paper due to the inferior quality of raw materials and also due to old machineries used by them in their factory. the said issue of time bar was brushed aside by the first appellate authority on only ground that it was not raised before the adjudicating authority. it is a settled law, that the question of time-bar can be raised at any level of proceedings, for the reason that it is question of law and goes to the root of the proceedings. in this case the authorities were aware on 22.8.1996 itself that there are high loss percentage in manufacturing, still they chose not to issue show cause notice till 29.1.1998.4. the whole show cause notice is hopelessly time-barred, in respect of demand of duty as well as the confiscation of the goods which were seized. appeal of the appellant is allowed only on the ground of time bar. appeal allowed and the order-in-appeal set aside with consequential relief, if any, to the appellant.

Judgment:
1. This appeal is directed against the Order-in-Appeal dated 30.04.2004 wherein the Order-in-Original confirming the demand, imposing penalty and confiscating the goods was upheld.2. Considered the submissions made at length by both sides and perused records. I find that the appellant factory was visited by the officers on 04.08.1997 and have found that some excess goods were not accounted in statutory book records. The said goods were seized on 4.8.1997 and handed over to the appellant for safe keeping. Show cause notice was issued to the appellant for confiscation of such goods which were found in excess and also for the demand of the duty of the goods allegedly cleared without payment of Central Excise duty for the period 1.1.1997 to 1.8.1997. The whole confirmation of the demand of duty was based on the excess consumption of raw material and the losses, being far more in excess than the industry norms.

3. The appellant in this case are claiming that the issue is time.barred. The said show cause notice dated 29.1.1998 was handed over to the appellant on 9.3.1998 by the office of Superintendent of Central Excise. It is very clear that the confiscation of the goods (which were seized on 4.8.1997 was sought, in the show cause notice which was handed over to the appellant on 9.3.1998. Since the show cause notice is issued beyond the period of six months for the confiscation of the goods seized and in the absence of any extension, granted for issuing the show cause notice in respect of the seized goods, I find that the goods cannot be confiscated. In respect of the demand worked out regarding the goods removed without payment of duty for the period from 1.1.1997 to 1.8.1997, I find that the appellant have vide their letter dated 22.8.1996, addressed to the Superintendent of Central Excise clearly mentioned that there are heavy losses in manufacturing of their final product i.e. Mill Board and Kraft paper due to the inferior quality of raw materials and also due to old machineries used by them in their factory. The said issue of time bar was brushed aside by the first appellate authority on only ground that it was not raised before the adjudicating authority. It is a settled law, that the question of time-bar can be raised at any level of proceedings, for the reason that it is question of law and goes to the root of the proceedings. In this case the authorities were aware on 22.8.1996 itself that there are high loss percentage in manufacturing, still they chose not to issue show cause notice till 29.1.1998.

4. The whole show cause notice is hopelessly time-barred, in respect of demand of duty as well as the confiscation of the goods which were seized. Appeal of the Appellant is allowed only on the ground of time bar. Appeal allowed and the Order-in-Appeal set aside with consequential relief, if any, to the Appellant.