1980 (4) TMI 113 - CGOVT - Central Excise

Summary

Issues:
1. Discrepancy in stock balance leading to allegations of furnishing erroneous information for financial accommodation.
2. Application of Rule 9(2) and the necessity to prove clandestine removal of goods.
3. Interpretation of judicial pronouncements on the issue of discrepancy in stock declarations.
4. Argument regarding limitation under Section 40(2) of the Central Excises and Salt Act.

Analysis:
1. The judgment addresses a case where the petitioners were accused of providing incorrect information to a bank for financial accommodation due to a discrepancy in stock balance. The petitioners rectified the mistake by adjusting the excess stock balance, which was approved by excise authorities after a joint stock taking. The government noted that there was no evidence of goods being cleared without payment of duty, emphasizing the importance of proving clandestine removal to apply Rule 9(2).

2. The judgment refers to a similar case decided by the Madras High Court, highlighting the importance of accurate stock declarations. The petitioners argued that statutory excise records should be trusted over bank statements, especially when the latter were inflated. The court emphasized the need for strong evidence to prove manipulation of excise records, suggesting that the accuracy of official figures should be presumed unless proven otherwise.

3. Regarding the argument on limitation under Section 40(2) of the Central Excises and Salt Act, the judgment discusses conflicting views from different High Courts. While some courts considered assessment proceedings exempt from the limitation period, others viewed it as applicable only to court proceedings, not departmental actions for duty quantification. The government concluded that the plea of limitation is not valid when goods are found to have been removed without duty payment and escaped assessment.

4. Ultimately, the revision application was allowed based on the merits of the case, specifically highlighting the lack of evidence for clandestine removal of goods and the importance of relying on accurate excise records. The judgment provides a detailed analysis of the issues surrounding the discrepancy in stock declarations, the application of relevant rules, and the interpretation of legal provisions related to limitation in excise duty cases.