9911796707
TMI Blog2003 (2) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... es of a kind used on animal-drawn vehicles (in short, ADV tyres) falling under sub-heading 4011.10 attracting nil rate of duty under Notification No. 229/82-C.E., dated 15-10-1982. The department, by inquiries through its officers, noticed that the above tyres cleared by the appellants were motor vehicle tyres chargeable to duty @ Rs.1050 per pc. under CET sub-heading 4011.60, that the appellants did not manufacture ADV tyres at all and that they cleared the above consignment of tyres in the guise of clearing ADV tyres of CET sub-heading 4011.10 chargeable to nil rate of duty. Therefore, a show-cause notice dated 26-4-88 was issued to the appellants raising a demand of duty of Rs. 4,78,800/- on the above consignment of tyres cleared without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been settled by the Tribunal against the appellants in their own case reported in [1999 (105) E.L.T. 313)]. Ld. Counsel, however, challenged the demand of duty on the ground of limitation. He submitted that, during the relevant period, the appellants were under physical control of the department and the latter was aware of their activities. Therefore, the allegation of suppression was not sustainable against the appellants. There was no documentary evidence on record to show that the appellants had suppressed any material fact with intent to evade payment of duty. The extended period of limitation was, therefore, not invocable in this case, counsel argued. The following decisions of the Tribunal were relied on by the counsel : (i) M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble quality control personnel in their factory, nor any equipment, to verify manufacture faults in their tyres. The Quality Control Department could only make visual inspection of tyres to detect external defects like cracks or presence of foreign matter. If the tyres were found, on such inspection, to be free from cracks or foreign matter, they were stamped as OK tyres. Otherwise the tyres (with external defects) were retained as such. We have also perused the statement dated 22-1-87 given to the department under Section 14 of the Act by Shri A.K. Roy, Chief Co-ordinating Manager of the appellant-company. Shri Roy answered Question No. 18 as under :- We have repeatedly told the Excise Department that under clause of ADV in Excise Tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar clearance of tyres relating to an earlier period viz. December, 1984 to April, 1985, which eventually became the subject matter of appeal before this Tribunal in the case reported in 1999 (105) E.L.T. 313. We are unable to accept the knowledge of the department in relation to an earlier period, as constructive knowledge of the appellants clandestine activity for a later period. It is apparent from the facts and evidence of this case that, in relation to the period October-December 1986, the appellants suppressed a material fact before the department with intent to evade payment of duty on excisable goods which, they knew, were chargeable to duty under CET Sub-heading 4011.60. The extended period of limitation has rightly been invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no evidence of suppression unlike in the instant case. 7. In the light of our findings already recorded, we hold that the demand of duty as confirmed by the Addl. Commissioner is not time-barred and we uphold the same. 8. The adjudicating authority has imposed a penalty of Rs.1.5 lakhs on the appellants under Rules 9(2) and 209 of the Central Excise Rules, 1944. We find that the impugned order does not disclose any finding whatsoever in relation to penal liability of the appellants. The department s allegation was that the appellants had contravened Rules 9(1), 52 and 52A. We have already found clandestine removal of goods in this case. Such removal necessarily involved breach of the said rules. Rule 9(2) prescribed a penalty of upto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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