1996 (4) TMI 324 - AT - Central Excise

Summary

Issues:
Dispensation of pre-deposit of duty amount under Section 11(a) of the Central Excises & Salt Act, 1944 demanded in terms of the impugned order.

Analysis:
The appellant sought dispensation of pre-deposit of duty amount of Rs. 3,33,90,893/- under Section 11(a) of the Central Excises & Salt Act, 1944 demanded in the impugned order. The appellant's advocate argued that no duty was collected from buyers for exempted footwear under Notification No. 49/86, and thus, no duty was retained or required to be paid to the Welfare Fund under Section 11D. The appellant contended that the show cause notice lacked specific data on the demanded amount and failed to provide a basis for the demand. The lower authority's order did not discuss the factual collection of duty by the appellants, focusing primarily on legal points. The appellant's appeal to the Collector highlighted procedural irregularities and lack of detailed computation in the demand amount. The appellant emphasized that without proper notice of the basis for the demand, they were prejudiced, leading to a denial of natural justice.

The Department argued that if duty was included in the wholesale price and collected from customers, it must be paid to the Government under Section 11D. The Department referenced the appellant's price lists showing abatements and assessable values but lacked specific facts to support inclusion of duty in cases where wholesale prices were below exemption limits. The Tribunal noted the absence of detailed data or worksheets in the show cause notice or lower authority's order regarding the duty element's inclusion in wholesale prices. The Tribunal emphasized the necessity of reflecting the quantum and basis for the demand in the notice, especially for a demand spanning multiple years. Without clarity on whether the demand pertained to cases where exemption was claimed solely through abatement or where wholesale prices were within exemption limits without abatement, the Tribunal found the lower authority's order lacking and granted the appellant's request for dispensation of pre-deposit.

The Tribunal held that there was a denial of natural justice, leading to the setting aside of the lower authority's order. The matter was remanded to the original authority for fresh consideration with proper opportunity for the appellant to be heard, ensuring compliance with principles of natural justice. The appeal was allowed by remand, providing a chance for the appellants to present their case effectively in light of the Tribunal's observations.