2003 (4) TMI 448 - AT - Central Excise

Summary

Issues:
1. Whether the demand of Additional Excise Duty on Shoddy Woollen fabrics/blankets is sustainable.
2. Whether the demand of duty was within the scope of the show cause notice.
3. Whether the authorities exceeded the scope of the show cause notice in raising the demand of Additional Excise Duty.

Issue 1:
The appeal questioned the sustainability of the demand of Additional Excise Duty (AED) amounting to Rs. 2,35,945 on Shoddy Woollen fabrics/blankets for the period September to December, 1997. The appellant contended that the goods on which the duty was demanded were different from those mentioned in the show cause notice. The authorities confirmed the duty based on the RT-12 returns filed by the appellant. The Tribunal analyzed the records, RT-12 returns, and the goods mentioned in the show cause notice. It was found that the goods mentioned in the notice were exempt from AED as per the relevant notification. The Tribunal concluded that the demand of AED on goods already declared in the RT-12 returns cannot be sustained without following the procedure under Section 11A of the Central Excise Act. Therefore, the appeal was allowed, and the orders of the lower authorities were set aside.

Issue 2:
The appellant argued that the demand of duty exceeded the scope of the show cause notice. The Tribunal examined the RT-12 returns for the relevant period and compared the goods mentioned in the notice with those declared in the returns. It was observed that the goods subject to the demand were the same as those declared by the appellant in the RT-12 returns. The Tribunal noted that the department did not intend to demand AED on the specific quantities of goods mentioned in the notice. As the goods in question were exempt from AED as per the notification, the demand made by the authorities was deemed beyond the scope of the show cause notice. The Tribunal emphasized that the demand of AED on goods already declared in the returns without following due procedure cannot be legally sustained.

Issue 3:
The Tribunal addressed the contention that both the adjudicating authority and the lower appellate authority had gone beyond the scope of the show cause notice in confirming the demand of AED. By closely examining the records and the orders passed, the Tribunal found that the authorities had indeed exceeded the scope of the notice in demanding AED on goods that were exempt from such duty. The Tribunal emphasized that the demand made without adhering to the legal procedure under the Central Excise Act cannot be upheld. Consequently, the Tribunal allowed the appeal, setting aside the decisions of the adjudicating and first appellate authorities.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's findings on each issue, ensuring a thorough understanding of the legal reasoning and conclusion reached in the case.