9911796707
TMI Blog1991 (5) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... September, 1984 and also imposed a penalty of Rs. 7 lakhs under Rule 173Q. Allegations of fraud, wilful mis-statement and suppression of facts were made in the Show Cause Notice and the proviso to Section 11A of the Central Excise Act was invoked. Alongwith the appeal, the appellants had also filed a stay application for waiving pre-deposit of the duty and penalty under Section 35F of the Act. By an order dated 6-3-1988 (Order Stay No. 55/88-C), the Tribunal had decided that the appellants should deposit the duty in full in cash, and had waived the deposit of penalty during the pendency of the appeal . It appears that the duty amount was deposited on 14th July, 1988 and this fact was brought to the notice of the Tribunal in an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the allegation with regard to fraud, suppression of facts etc., are untrue and false as they had regularly filed declarations claiming exemption under Notification No. 28/64 dated 1-3-1964 and had written letters to the Range Superintendent inviting for verification and permission for exemption under Notification No.28/64. That they had thus put all the facts open before the Range Officer and as such the show cause notice is patently time-barred under Section 11A and it is unjustifiable to allege suppression of facts. In this regard apart from what has been discussed and held in the foregoing para, it is seen from their letters that they have not informed the department that upto "raw soap" stage as found by the officers, manufacture is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edged by the Range Office on 8-5-1983 (page 45 of the paper book). The letter dated 28-1-1983 read as follows :- "We are holding licence for manufacture of soap with aid of power and pay necessary excise as required under the Act. Along with the said process, we have set up the "Tawda Process" without the aid of power which we would like to commence from 1st February, 1983." "You are requested to pay the visit to our factory and give a permission for commencement of the said process in separate premises specifically for the purpose after taking stock of the product already manufactured with the aid of power upto 31st January, 1983." 5. The letter dated 31-1-1983 read as follows :- "We refer your captioned letter and would like to submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laration, the date 30-7-1983 was typed and then it has been scored out in type and the date typed out as 30-4-191983. The reply to the show cause notice gives the date of declaration as 30-4-1983. Evidently, 30-7-1983 seems to have been typed by mistake. 8. A cumulative reading of the above 4 documents leaves no manner of doubt that the appellants had intimated to the department their intention to manufacture soap without the aid of power or steam. They sought guidance and instructions from department. The record does not show what instructions and what guidance was given by the department. But the department cannot say that they were not aware, or that they were not made aware, of the manufacture of soap without the aid of power or steam. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturing soap with the aid of power and were paying duty thereon and they were about to manufacture soap without the aid of power or steam which was exempt from duty. Risk to revenue was inherent in the situation and the department had to take all steps considered necessary to obviate that risk. It would have been an entirely different matter if the appellants had altogether suppressed from the department the fact of manufacture of soap without the aid of power or steam and its clearance without payment of duty in terms of the exemption notification. Such is not the case herein. Applying the ratio of the two Supreme Court judgments referred to earlier, it must be held that there was no suppression of material facts on the part of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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