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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 1983 (8) TMI AT This

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1983 (8) TMI 267 - AT - Central Excise

Issues:
1. Correctness and legality of five demands totaling Rs. 44,188.76 raised by Central Excise authorities.
2. Time-barred demand and compliance with Rule 173J.
3. Requirement of a show cause notice before making differential demands.
4. Interpretation of Rule 9A and Explanation (iii) regarding the date of removal of goods.

Analysis:
1. The case involved the challenge to five demands totaling Rs. 44,188.76 raised by Central Excise authorities, which were confirmed by the Asstt. Collector of Central Excise and upheld by the Appellate Collector. The question before the Tribunal was the correctness and legality of these demands.

2. The appellants initially argued that the demands were time-barred, with the fifth demand dated 2-4-1974 being specifically highlighted as time-barred. The Respondent conceded that the fifth demand was indeed time-barred, leading to the necessity of setting it aside on this ground.

3. The appellants contended that Rule 173J required a show cause notice to be issued before making any differential demand. The Excise authorities had not issued a show cause notice but directly made demands for payment. The Respondent argued that the demands were accompanied by statements justifying them, suggesting compliance with the rule. However, the Tribunal held that a show cause notice was a statutory requirement, and the demands made without it were procedurally incorrect, warranting the demands to be set aside.

4. The Tribunal delved into the interpretation of Rule 9A and Explanation (iii) concerning the date of removal of goods. The Explanation creates a fiction where goods are deemed removed from the factory or warehouse premises if there is a receipt issued by railways or transport agencies in favor of the purchaser. However, in this case, where goods were loaded in the presence of Excise authorities and certified by them, the date on the railway receipt was not deemed as the date of removal. The Tribunal concluded that the Explanation was not intended to apply in situations where goods had been cleared and removed from the factory in the presence of authorities, leading to the allowance of the appeal and setting aside of the demands.

Overall, the Tribunal ruled in favor of the appellants, setting aside the demands based on procedural irregularities and misinterpretation of the relevant rules and explanations.

 

 

 

 

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