M.C. Mammen Vs. Collector of Central Excise - Court Judgment

Excerpt:
1. this appeal is against the order of the collector of central excise, cochin. on remand of the case by the tribunal the learned collector as per the directions of the tribunal quantified the goods which have been cleared without payment of duty clandestinely and demanded duty of rs. 62,313.70 apart from levying a penalty of rs. 15,000/- on the appellant.2. the learned advocate for the appellants has pleaded that so far as the quantum as worked out by the collector is concerned he has no submissions to make and his only plea is that this quantum should have been quantified separately for the respective years when the carbon black was purchased. he has pleaded that the learned collector in his order has observed that the rate of duty in respect of the goods would be in terms of rule 9a(5) inasmuch as the date of actual removal of the unaccounted production of tread rubber is not known to the department.in this connection the learned advocate has submitted that in the show cause notice which was originally issued the clearances were alleged to have been made during the year 1981 to 1985 and as such therefore the learned collector herein should have allocated the quantum manufactured out of the non-accounted quantities of carbon black year-wise and demanded duty based on the rate of duty prevalent during the respective years. he however has clearly conceded that he is not able to say as to when these quantums as pleaded should be taken [to] have been removed from the appellant's factory. he further stated that the appellant has suffered a long agony on account of the long proceedings and the original demand of rs. 59,98,788/- which has been reduced to rs. 62,313.70 consequent on the re-adjudication of the matter on remand by the tribunal. he has pleaded that taking into consideration the facts and circumstances of the case the levy of penalty of rs. 15,000/- is very harsh and it should be reduced to a nominal amount.3. shri s. arulsamy, the learned jdr for the department pleaded that inasmuch as the quantum of goods cleared clandestinely as held by the learned collector is not challenged, the appellant is liable to pay duty. in regard to the allocation of the quantities year-wise he has pleaded that the appellants themselves are not able to say about the years and the dates on which these quantities would have been cleared and therefore there is no option but to resort to the originally relevant date for charging duty under rule 9a(5).4. i have considered the pleas made by both the sides. i observe that the learned lower authority has analysed the position based on the directions given by the tribunal and has worked out the quantum of the goods removed clandestinely without payment of duty after affording the appellants an opportunity of hearing. the quantum worked out is not under challenge. the duty therefore under law is demandable in respect of this quantity. the plea of the learned advocate that this quantum should be allocated to different periods based on the date of purchase of the carbon black cannot be accepted as there is no evidence on record to show as to when the goods were actually cleared nor it is possible to work out the possible date of clearance in respect of the clearances of goods. in the background of the facts of this case it would only be a conjecture. duty is required to be charged in terms of the central excise law based on the actuality of the situation and where the date of clearance is not known under the specific provisions under rule 9a(5) duty chargeable is as per the date of detection.5. in view of the above i hold that there is no infirmity in the order of the learned lower authority demanding duty based on the rate applicable in terms of rule 9a(5). taking into consideration the facts of the case and also the proceedings undergone for a long period, the original demand which was fixed at rs. 59,98,788/- as a result of re-adjudication has been reduced to rs. 62,313.70,i hold that the ends of justice will be served if the penalty is reduced to rs. 5,000/- (five thousand). but for the above modification the appeal is otherwise dismissed.

Judgment:
1. This appeal is against the order of the Collector of Central Excise, Cochin. On remand of the case by the Tribunal the learned Collector as per the directions of the Tribunal quantified the goods which have been cleared without payment of duty clandestinely and demanded duty of Rs. 62,313.70 apart from levying a penalty of Rs. 15,000/- on the appellant.

2. The learned Advocate for the appellants has pleaded that so far as the quantum as worked out by the Collector is concerned he has no submissions to make and his only plea is that this quantum should have been quantified separately for the respective years when the carbon black was purchased. He has pleaded that the learned Collector in his order has observed that the rate of duty in respect of the goods would be in terms of Rule 9A(5) inasmuch as the date of actual removal of the unaccounted production of tread rubber is not known to the Department.

In this connection the learned Advocate has submitted that in the show cause notice which was originally issued the clearances were alleged to have been made during the year 1981 to 1985 and as such therefore the learned Collector herein should have allocated the quantum manufactured out of the non-accounted quantities of carbon black year-wise and demanded duty based on the rate of duty prevalent during the respective years. He however has clearly conceded that he is not able to say as to when these quantums as pleaded should be taken [to] have been removed from the appellant's factory. He further stated that the appellant has suffered a long agony on account of the long proceedings and the original demand of Rs. 59,98,788/- which has been reduced to Rs. 62,313.70 consequent on the re-adjudication of the matter on remand by the Tribunal. He has pleaded that taking into consideration the facts and circumstances of the case the levy of penalty of Rs. 15,000/- is very harsh and it should be reduced to a nominal amount.

3. Shri S. Arulsamy, the learned JDR for the Department pleaded that inasmuch as the quantum of goods cleared clandestinely as held by the learned Collector is not challenged, the appellant is liable to pay duty. In regard to the allocation of the quantities year-wise he has pleaded that the appellants themselves are not able to say about the years and the dates on which these quantities would have been cleared and therefore there is no option but to resort to the originally relevant date for charging duty under Rule 9A(5).

4. I have considered the pleas made by both the sides. I observe that the learned lower authority has analysed the position based on the directions given by the Tribunal and has worked out the quantum of the goods removed clandestinely without payment of duty after affording the appellants an opportunity of hearing. The quantum worked out is not under challenge. The duty therefore under law is demandable in respect of this quantity. The plea of the learned Advocate that this quantum should be allocated to different periods based on the date of purchase of the carbon black cannot be accepted as there is no evidence on record to show as to when the goods were actually cleared nor it is possible to work out the possible date of clearance in respect of the clearances of goods. In the background of the facts of this case it would only be a conjecture. Duty is required to be charged in terms of the Central Excise law based on the actuality of the situation and where the date of clearance is not known under the specific provisions under Rule 9A(5) duty chargeable is as per the date of detection.

5. In view of the above I hold that there is no infirmity in the order of the learned lower authority demanding duty based on the rate applicable in terms of Rule 9A(5). Taking into consideration the facts of the case and also the proceedings undergone for a long period, the original demand which was fixed at Rs. 59,98,788/- as a result of re-adjudication has been reduced to Rs. 62,313.70,I hold that the ends of justice will be served if the penalty is reduced to Rs. 5,000/- (Five thousand). But for the above modification the appeal is otherwise dismissed.