1978 (12) TMI 46 - CGOVT - Central Excise

Summary

Issues:
1. Interpretation of Rule 92B of Central Excise Rules, 1944 regarding the liability of duty for a khandsari sugar unit.
2. Application of explanation (c) of Sub-rule (2) of Rule 92B in determining duty liability.
3. Consideration of factory closure period for duty computation.
4. Compliance with the conditions for availing the benefit of Rule 92B(2)(c).
5. Failure to respond to show cause notice and request for personal hearing.

Analysis:

1. The case involved a dispute regarding the liability of duty for a khandsari sugar unit under Rule 92B of the Central Excise Rules, 1944. The party had applied for sealing their centrifugal, stating the factory would remain closed from a certain date. However, subsequent activities were observed by the Central Excise Officer, leading to the imposition of a penalty and duty demand.

2. The Appellate Collector considered an amendment under Notification No. 240/75, which deemed the khandsari sugar unit to commence manufacturing operations when the centrifugal starts producing sugar. The duty liability was assessed based on the date the crusher started working, not when the centrifugal was sealed.

3. The Central Government issued a show cause notice (S.C.N.) to the party as the factory was found operational despite the sealing of the centrifugal. The liability for duty payment for the specific period was maintained as the conditions under explanation (c) of Sub-rule (2) of Rule 92B were deemed fulfilled.

4. The party did not respond to the show cause notice but requested a personal hearing, which they did not attend. The government proceeded with the case based on the available records. The examination revealed that the factory did not entirely remain closed for the required period to qualify for the benefit of Rule 92B(2)(c).

5. After careful examination of the case records, the Central Government decided to set aside the order passed by the Appellate Collector and reinstated the order issued by the Assistant Collector of Central Excise. The decision was based on the party's failure to meet the conditions for availing the benefit of the relevant rule.

This judgment clarifies the interpretation and application of rules governing duty liability for khandsari sugar units, emphasizing the importance of compliance with closure periods and conditions specified in the Central Excise Rules.