1985 (10) TMI 235 - AT - Central Excise

Summary

Issues Involved:
1. Maintainability of the demand for duty on automotive brake drums for a period longer than six months.
2. Conformity of the Collector's order with the provisions of Section 11A of the Central Excises & Salt Act, 1944.
3. Legality of the demand without a process of assessment.
4. Applicability of the extended period of five years under Section 11A due to alleged suppression of facts.
5. Jurisdiction of the Collector to issue the demand.

Issue-wise Detailed Analysis:

1. Maintainability of the demand for duty on automotive brake drums for a period longer than six months:
The facts of the case involve the clearance of automotive brake drums from March 1979 to April 1983 without payment of duty. The primary question is whether the demand for duty, which encompasses a period longer than six months from the date of demand, is maintainable. The Tribunal found that the demand was maintainable under Rule 9(2) read with Section 11A of the Act, which allows for a five-year period in cases of suppression of facts.

2. Conformity of the Collector's order with the provisions of Section 11A of the Central Excises & Salt Act, 1944:
The appellant argued that the Collector's order did not conform to Section 11A, which specifies that the power to demand duty lies with the Assistant Collector. However, the Tribunal noted that Rule 6 of the Central Excise Rules, 1944, allows the Collector to perform duties or exercise powers assigned to any officer under the Rules. Therefore, the Collector's order was found to be in conformity with the provisions of Section 11A.

3. Legality of the demand without a process of assessment:
The appellant contended that there can be no demand without a process of assessment, citing the Supreme Court decision in 'Assistant Collector of Central Excise, Calcutta v. National Tobacco Co. of India Limited.' The Tribunal, however, distinguished this case by noting that the present demand was under Rule 9(2), where goods had been removed without payment of duty, and thus the process of assessment was not a prerequisite.

4. Applicability of the extended period of five years under Section 11A due to alleged suppression of facts:
The appellant argued that the extended period could only be invoked in cases of fraud, collusion, wilful mis-statement, or suppression of facts with intent to evade duty. The Tribunal held that the term 'suppression of facts' stands by itself and does not require the adjective 'wilful.' The Tribunal concluded that the non-disclosure of production and clearances constituted suppression of facts, justifying the extended period of five years for the demand.

5. Jurisdiction of the Collector to issue the demand:
The appellant questioned the jurisdiction of the Collector, arguing that the power to demand duty lies with the Assistant Collector. The Tribunal found that the show cause notice was initially issued by the Assistant Collector and later amended to require the appellant to show cause to the Collector. The Tribunal held that the appellant, having submitted to the jurisdiction of the Collector, could not later challenge it. The Tribunal also noted that Rule 6 allows the Collector to exercise the powers of any officer under the Rules, thereby validating the Collector's jurisdiction.

Conclusion:
The Tribunal upheld the demand for duty on automotive brake drums for the period from March 1979 to April 1983, finding it maintainable under Rule 9(2) read with Section 11A of the Act. The Collector's order was deemed to conform to the provisions of Section 11A, and the demand was found to be legal despite the lack of a prior assessment process. The extended period of five years was applicable due to the suppression of facts, and the Collector had the jurisdiction to issue the demand. Consequently, the appeal was dismissed.