1993 (6) TMI 165 - AT - Central Excise

Issues Involved:
1. Applicability of Rule 56A(5)(i) vs. Rule 56A(3)(v) for the demand of Central Excise duty.
2. Time-barred nature of the notice issued for recovery of duty.
3. Alleged clerical mistakes in the RG-23 register and their implications.

Detailed Analysis:

1. Applicability of Rule 56A(5)(i) vs. Rule 56A(3)(v)
M/s. Orissa Industries Ltd. filed an appeal against the order confirming the demand for Central Excise duty of Rs. 33,547/- for 52.319 Metric Tonnes of White Alumina. The Assistant Collector had issued the demand under Rule 56A(3)(v) despite the notice being issued under Rule 56A(5)(i). The appellants argued that the notice should have been issued within six months as per Rule 56A(5)(i), making it time-barred. However, the tribunal held that the case falls under Rule 56A(3)(v), which covers non-accounting of materials and does not prescribe a time limit, unlike Rule 56A(5)(i) which deals with errors, omissions, or misconstructions by an officer. The tribunal emphasized that citing a wrong provision does not invalidate the notice if the charge is clear and the authority has the power under the correct provision.

2. Time-barred Nature of the Notice Issued for Recovery of Duty
The appellants contended that the notice issued on 21-12-1985 for discrepancies from 7-3-1981 to 18-1-1984 was time-barred. The tribunal examined whether the demand under Rule 56A(3)(v) is subject to any time limit. It referred to the Supreme Court's decision in Government of India v. Citadel Fine Pharmaceuticals, which stated that in the absence of a specified time limit, actions must be taken within a reasonable period. The tribunal concluded that the reasonable period should align with the time limits prescribed in Central Excise law for duty recovery. Since the discrepancies were noted in the RG-23 statements accompanying the RT-12 returns, the relevant date for computing the time limit is the date of receipt of these returns. The notice was issued beyond the permissible period, making it time-barred.

3. Alleged Clerical Mistakes in the RG-23 Register and Their Implications
The appellants argued that the discrepancies were due to clerical mistakes in the RG-23 register, and there were no removals without payment of duty. They provided photocopies of the relevant pages showing totalling mistakes, which had been checked and endorsed by officers without objections. The tribunal noted that the demand was based on errors in striking the balance in the RG-23 register, which were not detected during initial checks but found later during an audit. The tribunal observed that no stock verification was conducted to confirm the alleged removals, and the discrepancies were likely due to accounting errors. However, since the appeal succeeded on the grounds of the notice being time-barred, the tribunal did not delve further into the clerical error argument.

Conclusion:
The appeal was allowed on the grounds that the notice was time-barred. The tribunal held that the correct provision applicable was Rule 56A(3)(v) and not Rule 56A(5)(i), and emphasized that actions must be taken within a reasonable period, aligning with the time limits prescribed in Central Excise law. The tribunal also noted that the discrepancies were likely due to clerical errors, but the primary reason for allowing the appeal was the time-barred nature of the notice.

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