WESTERN INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE, COCHIN

JUDGEMENT

(1.) APPELLANT M/s. Western Industries is a manufacturer of Sandal Wood Oil which is liable to central excise duty under Chapter sub -heading 3301 -00. Under the impugned order, a duty demand of over Rs. 13.50 lakhs has been confirmed on a finding that the appellant had cleared without payment of duty during 1993 -94, sandal wood oil on which the said duty amount was payable. A penalty of Rs. 3 lakhs and redemption fine of Rs. 25,000/ - have also been confirmed.

(2.) THE appellants submission is that the duty demand is based on a sale tax proceeding which held that the appellant had evaded sale tax in respect of sandal wood oil. During the hearing of the case, learned Advocate submitted that, apart from the fact that the Central Excise Authorities were in error in relying on sale tax proceedings for imposition of central excise duty, the duty demand is also in excess of the amount actually payable for two reasons. The first is that relief had been granted by the appellate authority in sales tax proceeding in respect of the quantity in stock as well as errors in computation of quantity. The ld. Advocate mentioned about 52 kgs. as stock and mistake in respect of 75 kgs. Ld. Advocate has submitted that Central Excise Authorities have not considered these quantities. The second is that Central Excise authorities have erroneously treated the entire value of the goods as assessable value, instead of treating the same as cum -duty realisation. Learned Advocate submitted that relief should be given in respect of sales tax, central excise duty and other permissible items. He has also submitted that the penalty amount will have to be re -considered in the light of the actual amount of duty worked out after making reduction in duty on account of the two factors.

(3.) WE have perused the records and have considered the submissions made by both sides. The evidence relied upon in both proceedings is mostly the same. Appellant is, therefore, justified in its submission that relief with regard to quantity in stock and error in computation as allowed by in appellate proceeding in sale tax should be considered by the Central Excise authorities also. There is also merit in the appellants submission that the entire realisation on the sale of the sandal wood oil in question should not have been considered as assessable value. It is well settled that the price realised should be treated as cum -duty realisation. There is also merit in the appellant submission that in case the duty amount payable is found to be lower on reconsideration of the case, proportionate relief should be allowed in penalty also.