TAMILARASI TEXTILES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN the Order -in -Original No. 4/2005 dated 2.2.05 the Commissioner of Central Excise, Salem demanded an amount of Rs. 1,65,658/ - being duty not paid on clearances of cotton towels by the appellants during 1994 -95 and 95 -96 pursuant to withdrawal of exemption on them and imposition of duty as per a notification dated 1 March 1994. He imposed an equal amount of penalty on the appellant under Rules 9(2), 52A, 173 Q and 226 of the Central Excise Rules, 1944 read with Section 38 A of Central Excise Act, 1944. He also confiscated the seized goods valued at Rs. 11,100/ - under Rule 173 Q of Central Excise Rules, 1944 with an option to the assessee to redeem the same on payment of fine of Rs. 1,500/ - The present appeal is against the above order.

(2.) THE impugned order has been passed as per the remand directions of this Bench vide Final Order. No. l124/2001 dated 12.7.2001 with which the appeal of the appellants in the first round was disposed of. As directed in the above order, the Commissioner has allowed the benefit under Section 4(4)(d)(ii) of the Act and redetermined the duty liability. As regards the direction to re -examine their claim that they had not paid duty on the bona fide belief that they were not liable to pay duty as large number of units had not been paying duty, there is no categorical finding in the order. The Commissioner has justified the demand on the basis of various case laws and took the stand that assessee had to be vigilant in this regard and department did not have to alert them.

(3.) APPEARING on behalf of the appellant ld. Counsel Shri V. Balasubramaniam (sic) reiterated the claim of bona fide belief and requested that the demand be restricted to normal period. The Commissioner had found that large number of cases had been booked for same offence by other assessees and therefore their claim of bona fide stood established. However the Commissioner did not give a finding as per the remand but confirmed the demand invoking larger period citing some case laws. In order to avoid another round of remand and appeal the counsel for the appellant submitted that they were prepared to pay the amount demanded but (sic) prayed that the penalty may be waived. The counsel submitted that the appellants had maintained the accounts of production and sales systematically and correctly and had paid sales tax and income tax as per the accounts. The department had obtained the figures for demand made only from these accounts. This position was submitted before the lower authority which was not rebutted. This showed that their claim of bona fides was credible. He cited the case law Hindustan Copper Ltd. v. CCE, Indore [] in support of his argument that bona fide non payment of duty by the assessee situated in a remote area due to unawareness about the withdrawal of exemption did not call for any imposition of penalty. The litigation in this case has been mainly about the claim that the appellants along with a large number of other similar manufacturers had not paid duty out of ignorance of withdrawal of exemption on terry towels with effect from 1.3.94 and therefore larger period in terms of proviso to Section 11 A was not invokable in the instant case. Ld. Counsel submitted that he was not pressing the above point and prayed that the appellants be allowed the benefit of the ratio in the case of Hindustan Copper Ltd (supra).