1985 (5) TMI 134 - AT - Central Excise

Issues Involved:
1. Whether the value of clearances of the appellants during the financial years 1976-77 and 1977-78 exceeded Rs. 30 lakhs.
2. Whether the show cause notice was time-barred.

Issue-wise Detailed Analysis:

1. Value of Clearances Exceeding Rs. 30 Lakhs:
The appellants manufacture stainless steel utensils and also get stainless steel strips manufactured from flats and billets by other factories on payment of labor charges. The key question was whether the value of these cold-rolled strips should be included in the appellants' clearances, which would affect their eligibility for the concessional rate of duty under Notification No. 176/77-C.E.

The appellants argued that the job workers were independent parties, and thus, the value of strips manufactured by these job workers should not be included in their clearances. They cited judgments from the Tribunal and Allahabad High Court to support their argument. However, the Tribunal found that these judgments did not apply to the present case, as the manufacture by other companies was on behalf of the appellants.

The Notification No. 176/77-CE exempts goods cleared for home consumption if the total value of clearances does not exceed Rs. 30 lakhs. The Tribunal held that the manufacture of strips by other factories was done on behalf of the appellants, and therefore, their value should be included in the appellants' clearances. Consequently, the appellants' clearances exceeded the Rs. 30 lakhs limit, making them ineligible for the concessional rate of duty.

2. Time Bar of Show Cause Notice:
The appellants contended that the show cause notice was time-barred as they had filed the relevant declaration with the Department on 23rd March 1979, and obtained a Central Excise Licence on 30th March 1979. The Department argued that the show cause notice contained allegations of suppression of facts, which extended the limitation period to five years.

The Tribunal examined the show cause notice and found substantial allegations of suppression of facts and mis-declaration of value. The appellants had not disclosed the manufacture of cold-rolled stainless steel strips by other parties to the Department. Given these findings, the Tribunal held that the extended period of limitation was applicable, and the show cause notice was not time-barred.

Additional Points:
- The appellants argued that the value of goods exported should not be included in the value of clearances. The Tribunal agreed, stating that Notification No. 176/77-CE refers only to goods cleared for home consumption, and thus, the value of exported goods should be excluded from the computation.

- The appellants claimed there was an error in calculating the duty, as the Department incorrectly considered the value of stainless steel. The Tribunal directed that the appellants be given an opportunity to make a representation to the appropriate authority regarding this miscalculation.

- The appellants also argued that the penalty imposed was harsh. The Tribunal noted that the duty evaded was over Rs. 140,000 and found the penalty of Rs. 20,000 reasonable, refusing to interfere with the impugned order.

Conclusion:
The appeal was dismissed except for the direction to consider the appellants' representation about the quantum of duty. The Tribunal upheld the inclusion of the value of cold-rolled strips in the appellants' clearances, making them ineligible for the concessional rate of duty under Notification No. 176/77-CE. The show cause notice was found to be within the extended period of limitation due to suppression of facts.

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