1989 (10) TMI 149 - AT - Central Excise

Summary

Issues:
- Appeal against levy of penalty upheld by Collector of Central Excise
- Eligibility for benefit of Notification 71/78
- Refund claimed for clearances within Rs. 5 lakhs limit
- Department's new point raised during Tribunal appeal
- Allegation of mis-declaration in value of clearances
- Finality of proceedings and initiation of penal proceedings

Analysis:
The appeal pertains to the Collector of Central Excise upholding a penalty of Rs. 100 against the appellant. The penalty was imposed due to discrepancies in the clearances made by the appellant in 1978-79 under Notification 71/78. The appellant claimed refund for clearances within the Rs. 5 lakhs limit but paid duty for all clearances and later sought a refund. The refund amount was adjusted based on the total quantum collected from customers. The Collector (Appeals) rejected the appeal against the refund amount, leading the appellant to further appeal to the Tribunal, which also dismissed their appeal. During the Tribunal appeal, the Departmental Representative introduced a new argument regarding the total value of clearances exceeding Rs. 13.75 lakhs, which the Tribunal did not consider. Subsequently, the Department issued a show cause notice alleging mis-declaration of clearances in 1977-78, which was not entertained by the Tribunal as the proceedings had concluded. The appellant argued that penal proceedings could not be initiated after the Tribunal's final order, especially without citing any specific rule violation in the show cause notice.

The Senior D.R. for the Department contended that penal proceedings should ideally accompany duty demand proceedings, but in this case, given the finality of the Tribunal's order, separate penal proceedings were unnecessary. The presiding judge noted that the authorities had extensively examined the matter without any mention of mis-declaration or suppression by the appellant. The Tribunal also rejected the Revenue's belated claim of mis-declaration regarding eligibility for Notification 71/78. While acknowledging that there is no estoppel in tax matters, the judge emphasized that penal proceedings must be initiated within a reasonable timeframe. In this case, since the issue had been conclusively settled, and no violation was specified in the show cause notice, the judge deemed the penalty unwarranted. Consequently, the judge set aside the penalty, ruling it as legally flawed due to the finality of previous proceedings and lack of grounds for penalty imposition.

In conclusion, the judgment allowed the appeal, overturning the penalty imposed by the Collector of Central Excise, as the penal proceedings were deemed unjustified given the finality of previous proceedings and absence of specific rule violations cited in the show cause notice.