1987 (6) TMI 264 - AT - Central Excise

Summary

Issues: Interpretation of the term "cleared" in Rule 9A(l)(ii) of the Central Excise Rules, correct rate of duty payment under Rule 9A(5), validity of show cause notice under Rule 9A(4)(iii).

Analysis:
1. The main issue in this case revolved around the interpretation of the term "cleared" in Rule 9A(l)(ii) of the Central Excise Rules. The debate centered on whether the goods were considered "cleared" if they were removed without payment of duty and without following the proper procedure. The appellant argued that the dates of removal were ascertainable from their records, even though the RG 1's had not been updated at the time of removal. The department contended that intimation was given only when questioned by the Superintendent. Ultimately, the dispute boiled down to the differing interpretations of the term "cleared" by the two sides.

2. Another issue addressed in the judgment was the correct rate of duty payment under Rule 9A(5) of the Central Excise Rules. The Additional Collector had directed payment of duty at the rate of Rs. 200 per tonne, rejecting the rate of Rs. 100 per tonne paid by the factory on 3-12-1981. However, it was noted that the duty should be paid at the rate prevalent on the date of actual payment, not on the date of the Additional Collector's order. The judgment highlighted the error in the Additional Collector's directive regarding the rate of duty payment.

3. The validity of the show cause notice issued under Rule 9A(4)(iii) was also a crucial issue in the judgment. The Assistant Collector had issued a show cause notice to determine the duty on steel ingots and steel castings under this rule, which specifies the rate of duty based on the day the loss in storage is discovered. However, no show cause notice had been issued for assessing the duty at the rate at which it was actually paid, as per Rule 9A(5). The judgment emphasized that the Additional Collector's order was unlawful as it did not align with the show cause notice issued by the Assistant Collector.

4. In a concurring order, another Member (J) agreed with the conclusions drawn in the main order, particularly highlighting the unlawfulness of the Additional Collector's directive in the absence of a proper show cause notice for assessing the duty at the actual payment rate. The judgment underscored the importance of procedural compliance and accurate interpretation of statutory provisions in excise matters.