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TMI Blog2011 (6) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. Whether the show cause notice can be issued under Rule 10 or Rule 10A which were omitted w.e.f. 6-8-1977 and new Rule 10 was enforced from 6-8-1977 to 16-11-1980 - Held that:- The show cause notice was issued on 2-6-1981. By invoking the provisions of Section 38A, the revenue has power to issue show cause notice under Rule 10/10A during the relevant period. Appellants were claiming the SSI exemption under Notification No. 176/77-Central Excise, dated 18-6-1977 on the ground that the parts and accessories of motor vehicles were supplied to M/s. Ideal Jawa (I) Ltd., and M/s. Bajaj Auto Ltd., for further use in the manufacture of two wheelers, subject to Chapter X Procedure, value of these goods had to be excluded for the purpose of allowing exemption under Notification No. 89/79-C.E., dated 1-3-1979, 167/79-C.E., dated 19-4-1979 as amended by Notification No. 187/79-C.E., dated 10-5-1979. If the value of exempted goods is excluded duty liability would come down to be marginal. Therefore, the appellants were under an Impression/bona fide belief that they have complied with the conditions of the exemption notification substantially by obtaining certificates from M/s. Baj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts. The SCN claimed that SSI Exemption under Notifn. No. 176/77-C.E., dated 18-6-1977 was not available to TI-68 goods in view of their exceeding the eligibility criteria of Rs. 30 lacs. After due process of law, ld. Collector of Central Excise, by his Order-in-Original dated 30-11-1984, upheld the charges in SCN and confirmed the demand of Rs. 6,79,844.40 under Rule 9(2) read with Rule 10A, Rule 10 of the Central Excise Rules, 1944 and/or Section 11A of CESA, 1944 and imposed penalty of Rs. 25,000/- under Rule 173Q and imposed fine of Rs. 40,000/- in lieu of confiscation of goods and Rs. 25,000/- in lieu of confiscation of plant and machinery. Aggrieved by the said Order, the appellants filed an appeal before Hon ble Tribunal which by its Order dated 19-11-1992 [1993 (67) E.L.T. 731 (T)] referred the matter to Larger Bench to examine as to whether Collector was competent to adjudicate a show cause notice under Section 11A of CESA, 1944 prior to its amendment in 1985. Larger Bench of Hon ble Tribunal vide its Order dated 8-10-1998 [1999 (80) ECR 446 (Tri-LB) held that Collector was empowered to exercise powers which was otherwise conferred on Assistant Collector. The Advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, 167/79-C.E. and for the said reason fine and penalty are not sustainable and ld. Collector has not offered any findings. Ld. Collector had not rebutted the plea of no suppression in his findings and hence demand is time barred based on Tribunal judgment in CCE v. Raliwax (India) - 1996 (85) E.L.T. 341 (T). (E-1) that only job work value has to be taken into account for the purposes of computation of duty as well as value of clearances as Notifn. No. 119/75-C.E., dated 30-4-1975 exempted value of material and hence, duty was payable only on job work charges, in support reliance was placed on the following judgments : (i) Hindustan Development 2000 (150) E.L.T. 1425 (Raj.) Upheld By S.C. - 2003 (155) E.L.T. A236 (ii) Precision Telecon - 1986 (24) E.L.T. 235 (Karnataka) (iii) Jupiter Engravers - 1993 (68) E.L.T. 60 (Bom.) (E-2) it was further submitted that the Benefit of Notifn. No. 119/75-C.E. is available even if process amounts to manufacture and new product emerges at job worker s end. (i) Wadpack Pvt. Ltd. - 1997 (89) E.L.T. 24 (S.C.) (ii) Harrison Synthetics - 1997 (95) E.L.T. 9 (S.C.) (iii) Hindustan Mudran - 1997 (94) E.L.T. 474 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-C.E., dated 12-8-1994 was held to be not available for not following Chapter-X procedure, extended period was held to be not invocable. These judgments would squarely apply to the present case. (I) that since the issue was referred to Larger Bench of Hon ble Supreme Court in Hari Chand Shri Gopal [2010 (260) E.L.T. 3 (S.C.)], extended period is not invocable. (J) that without specifying sub-rule of Rule 173Q, penalty and fine is not sustainable based on the following judgments : (1) Amrit Foods - 2005 (190) E.L.T. 433 (S.C.) (2) S.G. Steels - 2007 (215) E.L.T. 64 (T) (3) ATM Intl. - 2007 (208) E.L.T. 288 (T) (4) Al-Amin - 2007 (211) E.L.T. 305 (T). Ld. SDR, Shri Kishorilal vehemently argued taking recourse to the reasoning of the Order-in-Original as briefly detailed below : (a) that the issue of SCN by Asst. Collector for the period prior to 27-12-1985 is legal as Tribunal judgment in H. Guru Instruments (North India) Pvt. Ltd, reported in 1989 (40) E.L.T. 180 (T) would not apply as the SCN therein was issued on 21-1-1986 i.e. after amendment. The same would apply to the other cases cited by the ld. Advocate in this regard. (b) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sunrise Structurals Engg. Ltd. was referred to, as reproduced below : Examining these clauses (a) to (e) under Section 38A. It is found that an Act X when repealed another by Act Y and Act Y is thereafter repealed by another Act Z , then Clause (a) of Section 38A, states that Act X will not revive since on the date of repeal of Act Y , Act X is not in force or in existence. Similarly, Clause (b) of Section 38A provides that any action taken under the old Act which is past and closed will not be affected. Therefore when a contract is declared as void under the old rule, on repeal of that rule, the void contract will not become a valid contract. Clause (c) applies to rights or privilege (hereinafter referred to as vested right for ease of understanding) accrued to anyone. The said clause (c) also applies to obligation or liability incurred by a person. Again Clause (d) of Section 38A provides that on repeal of the rule, the punishment already incurred is not affected. Suppose a person has been remanded to judicial custody, say for a period of two years and during the currency of the said period, the rule under which the punishment awarded is repealed. Clause (d) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not? 4. The learned Advocate for the appellants has contested the issue on several grounds namely : (a) Whether the demanding duty invoking extended period alleging suppression of facts and contravention of the provisions of Central Excise Rules with an intent to evade duty under proviso to Section 11A of the Central Excise Act, 1944, the Collector was empowered whether the Assistant Collector has the power to issue show cause notice or not? (b) Whether the show cause notice issued to demand and recover duty under Rule 10A and/or Rule 10 is sustainable or not (in the facts and circumstances of the case)? (c) Whether the appellants are entitled for SSI exemption when they have complied with the conditions of Notification No. 176/77-C.E., dated 18-6-1977 in the facts and circumstances of case or not? 5. In the case of Commissioner of C. Ex., New Delhi v. Hari Chand Shri Gopal reported in 2010 (260)-E.L.T. 3 (S.C.) has held that the exemption notification are to be complied with strictly and the substantial compliance means the actual compliance in respect to the substance essential to every reasonable objective of the statute. Therefore as contended by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture of excisable goods, there was no intend to evade payment of duty. The judgment is reported in Gopal Zarda Udyog v. Commissioner of Central Excise - (2005) 8 SCC 157 = 2005 (188) E.L.T. 251 (S.C.) . From the above, we find that in the case of Gopal Zarda Udyog reported in 2005 (188) E.L.T. 251 (S.C.) has examined the issue and observed that in case the assessee was under bona fide impression that value of its product was not includible in its declaration for the reason that the said product was exempted from duty under the Notification dated 23-11-1961 because two High Courts have taken the view that product was exempted from duty whereas the two High Courts has taken contrary view. In these circumstances it was held that the misstatement in declaration filed by the assessee or suppression of facts therein was not wilful applying the said test in the case of Hari Chand Shri Gopal. The Hon ble Apex Court has held that the show-cause notice alleging contravention of the provisions of Acts and Rules and on the part of appellants in failing to get their unit register under Section 6 read with Rule 74 of the Rules there was no intent to evade payment of duty. In the ab ..... 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