JAY MAHAKALI ROLLING MILLS Vs. UNION OF INDIA

JUDGEMENT

(1.) Challenge in these appeals is to the order passed by the Division Bench of the Gujarat High Court dismissing the writ petition filed against the orders of the Customs, Excise and (Gold) Control Appellate Tribunal, West Regional Bench, at Mumbai (in short 'CEGAT').

(2.) Background facts in Civil Appeal No. 5109 of 2002 in a nutshell are as follows : A show-cause notice was issued to the appellant alleging that the appellant was not entitled to the exemption under Notification No. 208/83-CE, dated 1.8.1983 on the final product falling under Tariff Item No. 25(9) (ii). Allegation was that the appellant M/s. Jay Mahakali Rolling Mills had contravened the provisions of Rule 174 of the Central Excise Rules, 1944 (in short the 'Rules') read with Section 6 of the Central Excises and Salt Act, 1944 (in short the 'Act') and Rules 173-B; 53 read with 173-G(4); 9(1), 49, 52-A read with 173-G(1), 173-G(2) and 174-F; 54 read with 173-F(3) of the Rules and thereby com mitted the offence of the nature described in clauses (a), (b), (c) and (d) of sub-rule (1) of Rule 173-Q of the Rules by reasons of wilful misstatement, suppression of facts with in tent to evade payment of central excise duty. The appellant was, therefore, asked to show-cause as to why Central Excise Duty amount ing to Rs. 12,67,006.19, on 3473.705.2.2 MT excisable goods i.e. rolling products manu factured and cleared by it without payment of duty for the period 23.8.1984 to 31.8.1987 should not be recovered from it under Rule 9(2) of the Rules read with proviso to sub- section(1) of Section 11-A of the Act. They were also required to show-cause as to why penalty should not be imposed under clauses (a), (b), (c) and (d) of sub-rule (1) of Rule 173-Q and Rule 9(2) of the Rules. In response, appellant submitted that in Noti fication No.101/87-C.E., dated 27.3.1987 materials were specified as inputs in view of the amendment. It was submitted that there was no ill-intention or suppression of facts and/or intention to evade duty. Therefore, penalty cannot be imposed. The Adjudicat ing Authority rejected the contention and held that duty and penalty were leviable. The order was challenged before the CEGAT which dismissed the appeal. It was held that the amendment made to the notification on 27.3.1987 has prospective application and has no retrospective application as con tended by the appellant. It was further held that items which were earlier included were specified. Therefore, the stand that the amendment was merely clarificatory is with out any substance. It was held that duty li able was to be reduced by the duty payable from 27.3.1987 to 31.8.1987 amounting to Rs.2,28.898.80. The penalty was reduced to Rs. 75,000/-.

(3.) In the appeal before the High Court stands taken before the Adjudicating Au thority and CEGAT were reiterated. The High Court by the impugned order held that there was no basis to accept the contention that the notification was intended to be given retrospective effect. The writ petition was dismissed.