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TMI Blog1989 (7) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... e relating to legal aspect. The learned Departmental Representative, Shri Arora has no objection. Therefore, the additional ground numbered as para 26A is allowed. Appeal No. E/2372/84-B This appeal is directed against the order dated 21-8-1984 passed by the Collector of Central Excise, Bombay-I, by which he had demanded Central Excise duty under Item 68 of Central Excise Tariff on the goods produced by the appellants for the period from 18-6-1977 to 31-3-1979 amounting to Rs. 2,14,920.10 besides imposing a penalty of Rs. 25,000/- on the appellants. He also confiscated the plant and machinery of the appellant s factory under Rule 173Q(2) of the Central Excise Rules levying a fine in lieu of confiscation of Rs. 25,000/-. The brief facts are that the appellants are manufacturers of silver utensils and other articles of silver besides manufacturing of metal domes and lathe machinery falling under Item 68 of Central Excise Tariff. The department s case is that the officers of the Directorate of Revenue Intelligence, Bombay enquiring into the manufacture of silver utensils and engineering goods by the appellants recorded a statement of Sadanand Anant Hajare, a partner of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the certificate. The Chartered Accountant Shri Jagdev Rao Jagtap in his statement on 2-3-1979 said that the proforma of the certificate was given to them by Shri Sadanand A. Hajare who had given them instructions that only manufacturing cost excluding profit should be certified for silver articles, machinery and metal articles manufactured by the appellants in their own factory only, Shri Sadanand A. Hajare in his statement on 16-4-1980 admitted that as directed by him, the Chartered Accountant gave the certificate showing only the value of silver utensils manufactured by them and belonging to them and that the value of silver goods manufactured on job work basis were not shown in the certificate. Based on these and following further investigations, proceedings were instituted against the appellants for demanding differential duty on the ground that they have claimed the exemption based on certain certificates relating to value of clearances which did not correspond with the reality. The proceedings ultimately resulted in the impugned order of the Collector against which the present appeal has been filed. 2. Shri Gopal Prasad, the learned consultant, appearing for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants to furnish such other particulars as they wanted for which he relied upon the judgment reported in Collector v. Chemphar Drugs Liniments -1989 (40) E.L.T. 276. The learned consultant also pointed out a legal infirmity in the Show Cause Notice that Rule 9(2) was not applicable as there was no clandestine removal of excisable goods. Further, at the material time, Rule 10, which has been cited in the Show Cause Notice as well as in the Collector s adjudication order, was no more in existence and the short-levy to be demanded only under Section 11A of the Central Excises and Salt Act, 1944. Under this Section, as it existed at the material time, only the Assistant Collector was specifically empowered to demand duty invoking the longer period and not the Collector who was so empowered under this Section only after the amendment thereof in December, 1985. Therefore, according to the appellants, the Show Cause Notice was without jurisdiction. As regards the order confiscating the plant and machinery, it was pointed out that Rule 173Q(2) lays down certain specific criterion for ordering confiscation of plant and machinery. No such special reasons have been spelt out in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to the department basing their charges as per the value for bullion silver. The learned Departmental Representative further referred to the statements given by the appellants as well as by the Chartered Accountant, which clearly bring out suppression of material fact relating to the value of the excisable goods indulged in by the appellants. 4. We have carefully considered the submissions made by the learned consultant and the learned Departmental Representative. The appellants have submitted that there was no fraudulent intention on their part in obtaining the Chartered Accountant s certificates and that a comparison of the figures in the Show Cause Notice annexure and those in the Chartered Accountant s certificates would show that quantity-wise, the figures for silver, metal domes and lathe machinery tally in the two documents except in respect of value and that too only in the case of silver. This was explained as due to the fact that the department had arbitrarily adopted the silver bullion value which was irrelevant for valuing utensils of silver which the appellants dealt with. We are unable to accept this argument for the reason that it relates to a question of fact an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the extended period for duty demand is not valid, we find that the dispute revolves round the aspect of certain elements of valuation of the goods for which from the records it is seen the department could not be said to have been in the know of all particulars. The appellants have raised the further point that the Show Cause Notice and adjudication order have invoked Rule 10 which was not in existence at the relevant time when Section 11A was on the statute under which at the material time, only the Assistant Collector had jurisdiction to demand duty for the period beyond six months and that since there was no charge of clandestine removal, Rule 9(2) also cannot be invoked. Yet, another submission made during the hearing of appeal was that silver is exempt from duty under Item 68-CET and that since silver includes utensils, their products are not dutiable at all. Examining these contentions, we have to make the following observations. These contentions have been made as additional grounds in the appeal. No objection had been taken on this ground before the Collector during the adjudication proceedings in which they participated without demur. In this connection, the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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