1994 (3) TMI 121 - CGOVT - Central Excise

Summary

Issues:
1. Denial of natural justice in disclosing facts in the order-in-original.
2. Ownership of documents relied upon by the department.
3. Physical impossibility of manufacturing goods.
4. Applicability of the rate of auxiliary duty.

Analysis:
Issue 1: The applicants contended that essential facts in the order-in-original were not disclosed, violating natural justice. However, the court held that a show cause notice need not contain every detail, as long as it discloses essential particulars of the charge and proposed action. The applicants were aware of the facts as they responded to the notice, indicating knowledge of the events. Thus, the first issue was decided against the applicants.

Issue 2: The applicants argued that documents like Gate-passes did not belong to them. However, the court found that the documents were recovered from their premises and were signed by one of the partners of the applicant firm. The court highlighted the applicability of Section 36(A) of the Central Excises and Salt Act, allowing the department to presume the truthfulness of recovered documents. Therefore, the plea of the applicants on this issue was dismissed.

Issue 3: The applicants claimed it was physically impossible to manufacture goods to the alleged extent due to limited space. The court found this plea unconvincing, stating that the production quantity could fit in the available space based on the average daily production. The court also noted discrepancies in the party's explanation regarding the despatch of paints and varnishes to Railways, which lacked specific details and supporting documents. As a result, the court upheld the findings of the lower authorities on this issue.

Issue 4: The court remanded the matter to the Collector of Central Excise, Calcutta, to reevaluate the rate of auxiliary duty as the detailed worksheet used by the Collector was not available for review. The court directed a fresh calculation based on the extant rates, indicating a need for further assessment on this specific issue. The revision application was rejected on its merits except for the aspect related to the rate of auxiliary duty, which required reexamination.

In conclusion, the judgment addressed various issues raised by the applicants, emphasizing the importance of disclosing essential particulars in show cause notices, ownership of documents, feasibility of manufacturing goods, and the correct application of duty rates. The court's decision provided detailed reasoning for each issue, ultimately resulting in a partial remand for further assessment and rejection of the revision application on other grounds.