9911796707
TMI Blog1994 (5) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ector shall be at liberty to extend this time limit by a period of 30 days on an application received from the noticee by him well within the expiry of one month s initial time limit. 3. The noticee shall also within the aforesaid time limit inform the Assistant Collector the quantity of such parts manufactured in house. 4. Upon receipt of the aforesaid information the Assistant Collector shall quantify the duty involved thereupon as the said parts are classifiable under sub-heading 8533 and communicate the same to the Noticee within 15 days of the receipt of the said information from them. 5. Upon receipt of the said quantified amount, the noticee shall forthwith pay the duty. The demand under this show cause notice for the entire period mentioned thereunder is confirmed to this effect. 6. I also impose a penalty of Rs. 50,000/- (Rupees fifty thousand only) on the noticee under Rule 173Q which shall be paid forthwith." 2. At the time of hearing the stay application, it had been urged by the appellant s counsel that the quantification of demand of duty persuant to the impugned order had not been made by the department authorities and had urged that due to practical diffic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey had contravened the provisions of Central Excise Rules. Therefore, it was also alleged that they have not declared the parts of potentiometer effective from 1-3-1985 and 1-3-1986 and had informed the department that they were not manufacturing parts of potentiometer but these were sub-assemblies for the integrated process of manufacture, and thus it was alleged that they had wilfully mis-declared and suppressed the above facts, with an intent to evade payment of duty under the provisions of Section 11A of Central Excises Salt Act, 1944. The duty amount of Rs. 55,59,466.94 was demanded on the parts of potentiometer, removed during the period 1-3-1986 to 29-2-1988 as per the details furnished in Annexure `B attached to the show cause notice. In the Annexure `A , the facts of the case has been stated. In these facts, it has also been stated that Shri G. Jairam has given statement on 6-8-1988 which had recorded before Supdt. (Pre.) Hdqrs. that there were 25 parts required for the potentiometer. Some of these were bought from the other parties. The letter dt. 21-4-1988 and 21-4-1988, it revealed that there are sub-assemblies which arises at intermediate stage and as these interme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 3,70,63,112.90 Parts of potentiometer falling under sub-heading No. 85.33. Rate of duty 15% Adv. Since 1986-87. Duty Rs. 55,59,466.94." 3. The appellant filed their detailed reply dt. 13-8-1990 denying the contentions and raising several pleas besides citing several case law. The crux of the reply is that these sub-assemblies on which a proposed duty is being levied are not finished goods, and that they are not marketable and hence, not excisable. They had also clearly stated that the correspondence, and the approval of previous classification lists, clearly indicated that there was no suppression in the matter and hence, larger period is not invokable. 4. Ld. Collector appears to have disagreed with their pleas on a different ground as can be found from Para 18 of the order. He has not given any findings on the excisability of the impugned goods namely : sub-asemblies, however, he has only drawn inference from the citation quoted by the appellants. The Collector has also taken a different view on the show cause notice. He appears to have taken a stand that on a scrutiny of the structure of the show-cause notice, it would show that a reference is being made to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty that the show-cause notice has proceeded on the basis that the demands are on the sub-assemblies. The department was fully aware of the manufacture of basic parts which go into the manufacture of sub-assemblies. The sub-assemblies were the subject matter of the dispute and not the basic parts. The Collector is trying to draw his inference from the show-cause notice that the issue before him is with regard to the basic parts and not the sub-assemblies. This is a totally wrong reading of the show cause notice. If the issue was with regard to the basic parts then the deptt. should have amended the show cause notice and proceeded separately. The demands quantified in Annexure `B of show-cause notice is with regard to the three sub-assemblies. Even if the question is redrafted by the Collector on the understanding arrived at by him during the personal hearing, even then he was required to have given a fresh show-cause notice to the party calling upon them to explain on this aspect of the matter. He cannot direct in the final order to the appellants to give details of the basic parts manufactured by them, as that was not the issue. Therefore, he cannot convert the final order, to a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of manufacturing process in their Annexure to their letter dt. 18-12-1988. They had stated in this letter that sub-assemblies are not parts and the same is not available in the market and they are not marketable also. The Supdt. by his letter dt. 26-10-1988 called upon them to give information regarding production, utilisation of components of potentiometer. By their letter dt. 4-11-1988, they have stated that they had already provided a flow chart describing the stages of manufacturing of potentiometer and in turn called upon the Supdt. to specify which are the components that they desire. The Supdt. by his letter dt. 7-11-1988 informed them that they are manufacturing the following parts : Carbon Track Assembly in potmeter shop Cap assembly P.M.F. Shop Spindle and Spider ssembly (Plastic with spinder of silver plated brass) in P.M.F. Shop. Therefore, they were called upon to furnish the details of production, clearance and value of these essential parts for the period 1-3-1988 to 29-2-1988. The appellant by their letter dt. 16-2-1988 submitted that the manufacturing process of potentiometer is an integrated one, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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