HINDUSTAN GENERAL INDUS. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in this Appeal, filed by M/s. Hindustan General Industries Ltd., is whether the Central Excise duty is leviable on under frames, body sides, ends, roof and floor etc. as parts of Railway Wagons.

(2.) SHRI Krishna Kumar, learned Advocate, submitted that the Appellants fabricate Railway Wagons for and on behalf of the Indian Railways out of the raw materials and components provided by the Indian Railway; that an agreement was executed between Indian Railways and the Appellants on 25.3.1992 according to which Excise duty shall be reimbursed by the Railways; that a show cause notice dated 1.10.93 was issued to them for demanding duty amounting to Rs. 55.20 lakhs in respect of base floor, body ends etc. which came into existence as a part of the wagon; that the Appellants had sent detailed information/particulars with regard to the goods in question under their letter dated 30.6.1996; that on the basis of the said data, the Assistant Commissioner by a Corrigendum dated 24.1,97 rectified the error in demanding duty which was reduced to Rs. 1,31,387.20 Paise; that the Commissioner, thereafter, issued a Memorandum dated 16.2.2001 stating that the Assistant Commissioner, who had issued the Corrigendum, was not competent to adjudicate the case and the notice was wrongly made answerable to the Deputy Commissioner; that under the impugned Order, the Commissioner had confirmed the demand of duty amounting to Rs. 55.20 lakhs and imposed a penalty of Rs. 5 lakhs.

(3.) THE learned Advocate, further, submitted that as the show cause notice had been amended by corrigendum dated 24.1.97, the amount of duty stood reduced from Rs. 55.20 lakhs to Rs. 1,31,387.20 p. and as such no demand of duty in excess of Rs. 1,31,387.20 p. can be confirmed against them; that the Corrigendum issued by the Assistant Commissioner was an adjudication Order which should have been reviewed by the Commissioner, under Section 35 E of the Central Excise Act; that as the review was not undertaken by the Commissioner, the Order stands; that the Assistant Commissioner was competent to decide the matter in terms of Board's Circular No. 299/15/97 -CX dated 27.2.97 as the extended period of limitation for demanding the duty was not invoked in the show cause notice. The learned Advocate relied upon the decisions in the case of CCE, Jaipur v. Jaipur Polyspin Ltd., 1999 (113) ELT 265 (T) wherein it has been held that the Board has administratively limited the powers of adjudication of Assistant Collector "and that exceeding these powers cannot be treated as legal infirmity. Exceeding these powers will at best be administrative irregularity." Reliance has also been placed on the decision in the case of CCE, Jaipur v. Jay Pee Agro Chemicals Ltd. 1999 (109) ELT 819 (T) He thus contended that the Memorandum dated 16.2.2001 does not come under the purview of the Central Excise Act and if any corrigendum is valid, it is the one issued on 25.1.97 which was issued after considering the data placed on record. Alternatively the learned Advocate mentioned that the Memorandum dated 16.2.2000 is bad as the same had been issued after taking up the hearing of the original show cause notice and it is hit by time limit and the demand is time barred.