1997 (12) TMI 353 - AT - Central Excise

Summary

Issues:
- Benefit of Notification No. 175/86-C.E. and subsequent amendments
- Allegation of suppression of facts by the assessee
- Demand for differential duty and penalty imposition
- Claim of limitation on demand confirmed for an extended period
- Imposition of penalty for contravention of Rules 173B and 173F
- Remand of the matter for redetermination of duty payable

Analysis:

The appellants were availing benefits under Notification No. 175/86-C.E. and similar notifications until an amendment through Notification No. 244/87 ceased their eligibility. The issue arose when the appellants continued to clear goods under the concessional duty rate post-amendment until visited by Officers on 15-7-1988. A show cause notice was issued for demanding differential duty for the period from 1-11-1987 to 15-7-1988, alleging suppression of registration with D.G.T.D. and invoking the extended period for penalty imposition. The Additional Collector confirmed a demand of Rs. 1,51,558.41 and imposed a penalty of Rs. 30,000 on the assessees, leading to the appeal.

The learned Advocate for the appellants argued that there was no suppression of facts as the appellants had previously informed the department about their registration with D.G.T.D. through a letter dated 15-5-1984. The Tribunal noted that the department's knowledge of the registration negated the suppression allegation. The Tribunal set aside the demand confirmed for the period beyond six months due to the lack of suppression of facts by the appellants.

Regarding the penalty imposed for contravention of Rules 173B and 173F, the Tribunal considered the inadvertent failure to file a fresh classification list due to lack of knowledge of the amending notification. It was observed that the proceedings did not clarify if there were intervening changes necessitating the filing of fresh lists. The Tribunal, not upholding the suppression allegation, decided to remit the penalty imposed on the appellants for contravention of the rules.

Conclusively, the Tribunal remanded the matter to the Adjudicating Authority for the redetermination of the duty payable by the assessees, excluding the portion of the demand affected by the limitation. The Tribunal emphasized the communication between the assessee and the department as a continuous entity, ensuring that the department's knowledge of the registration precluded the suppression allegation and the subsequent penalty imposition.