1991 (11) TMI 144 - AT - Central Excise

Summary

Issues:
- Time-barred show cause notice
- Eligibility of credit under Notification 201/79
- Confiscation of concrete sleepers and imposition of penalty

Time-barred show cause notice:
The appellants argued that the show cause notice was time-barred, as it covered a period beyond the statutory limit. They contended that since they had filed relevant documents and returns, the allegation of suppression was not sustainable. The appellant cited various cases to support their argument. However, the respondent argued that the appellants continued to avail credit under the rescinded notification deliberately, violating rules to evade duty, justifying the extended period for the notice.

Eligibility of credit under Notification 201/79:
The appellants claimed eligibility for credit under Notification 201/79, even after its rescission, based on a decision by the South Regional Bench. They argued that proforma credit should be allowed under Rule 56A. The respondent countered by stating that the appellants did not opt for proforma credit after the rescission and continued to avail benefits under the old notification without proper authorization, justifying the demand for recovery of credit.

Confiscation of concrete sleepers and imposition of penalty:
Regarding the confiscation of concrete sleepers and penalty imposition, the appellants argued that the rejected sleepers were not accounted for in the RG-1 register due to rigorous testing requirements by the Railways. They claimed no mala fides and objected to the confiscation and penalty. The respondent contended that the sleepers, though rejected, were fully manufactured and should have been accounted for in the register before storage in the bonded store room. Non-compliance with statutory provisions warranted confiscation and penalty.

The tribunal, after hearing both sides, ruled in favor of the appellants on the eligibility of credit under Notification 201/79, citing Rule 56A(8) to allow the credit taken in RG 23. The tribunal set aside the demand for credit recovery. However, the tribunal upheld the confiscation of concrete sleepers and imposed a reduced fine of Rs. 10,000 and a personal penalty of Rs. 5,000, showing leniency considering the circumstances. The appeal was disposed of accordingly.