1983 (12) TMI 284

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..... al Excise Tariff. Appellants contend that during the manufacture of gramophone records, defective records called `Demo records are also produced, that this is inevitable, as it is inherent in the manufacturing process. The defective records so produced are not fit for sale or marketing. Between the period Nov., 1978 to Nov., 1980, the appellants removed from their factory to their head office 13,576 pieces of `Demo gramophone records. No statutory records like gate passes or R.G. 1, were maintained in respect of these demo records though a number of other private documents in respect of these were maintained and produced by the appellants before the authorities. The Internal Audit of the Central Excise Department some time about March, 19 .....

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..... that 4,000 pieces of records had been sold was not based on evidence, that no penalty was called for on the facts and circumstances of the case and the demand of duty in any case was beyond time. The appellants have also filed a number of documents like Note on process of manufacturing gramophone records, machine performance report, daily production slips etc. 4. At the hearing of the appeal Sh. S.K. Chatterjee, Consultant was heard in support of the appellants and Sh. V. Lakshmi Kumaran, S.D.R. defended the order-under-appeal. 5. Sh. Chatterjee, learned Consultant for the appellants faintly tried to argue that as the records were defective or damaged, process of manufacture was not complete. To a question by the Bench, whether Sh. Ch .....

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..... -statement on the part of the appellants and therefore the demand could not be for the extended period of 5 years, but could only be limited to a period of 6 months preceding the show cause notice. Sh. Chatterjee for this argument relied on a decision of C.E.G.A.T. in the case of M/s. Ravindra Steel Ltd., Nagpur v. Collector of Central Excise, Nagpur reported in 1983 ECR 294 (D) (CEGAT). 7. We have gone through the show cause notice dated 25-3-1981 served on the appellants. We find that except for mentioning Rule 9(2), the show cause notice does not allege any collusion, fraud, wilful mis-statement or suppression of facts on the part of the appellants. In the absence of these allegations in the show cause notice, the extended time limit .....

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