1993 (6) TMI 144 - AT - Central Excise

Summary

Issues:
1. Duty demand on PVC soles manufactured and clandestinely removed without payment of duty.
2. Bar on limitation period for the demand.

Analysis:
1. The appeal concerned the duty demand of Rs. 95,685.74 on 47,298 pairs of PVC Soles manufactured and clandestinely removed by the appellants without payment of duty. The goods were seized and a penalty was imposed. The case originated when Preventive Officers visited the factory and found discrepancies in the stock records. The appellants contended that they were unaware of the rescission of the exemption notification and cleared the goods on payment of duty upon learning about it. The adjudicating authority confirmed the duty demand, confiscated the goods, and imposed a penalty. The appellants argued that the demand was time-barred, but the tribunal rejected this argument, stating that the demand was not barred by limitation due to lack of evidence supporting the appellants' claim of ignorance about the rescission of the notification.

2. The main issue for determination was whether the demand was barred by limitation. The tribunal rejected the appellants' contention that they were unaware of the rescission of the exemption notification until November or December 1985. The tribunal found no evidence to support the claim that the trade only became aware of the rescission at that time. The tribunal also noted the appellants' failure to apply for a license, file classification lists, or account for the manufacture of PVC soles immediately after the exemption was withdrawn. The tribunal held that the demand was not barred by limitation. Additionally, the tribunal clarified that the second show cause notice did not exceed the scope of the earlier notice as both alleged suppression by the appellants. The tribunal confirmed the duty demand and confiscation of goods but reduced the penalty imposed from Rs. 25,000 to Rs. 5,000 considering the circumstances of the case.

In conclusion, the tribunal upheld the duty demand and confiscation of goods while reducing the penalty imposed on the appellants. The appeal was rejected with the modification of the penalty amount.