SABAR CABLE PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Mr. J.D. Ajmera, learned Additional Central Government Standing Counsel, waives service of Rule on behalf of all the respondents. With the consent of and at the request of the learned counsel appearing for the parties, the petition is ordered to be heard today.

(2.) The petitioner No.l is a Private Limited Company and petitioner No. 2 is Managing Director thereof. Both the petitioners are referred to hereinafter as "petitioner company".

(3.) The petitioner company is engaged in the manufacture of (1) electric wires and cables; (2) aluminium alloyed standard conductors; and (iii) aluminium wires of aluminium not alloyed. The aforesaid final products are classified under sub-headings (i) 8511.00 (ii) 7614.90, and (iii) 7605.19 respectively, of the Schedule to the Central Exicse Tariff Act, 1985. The petitioner company was initially manufacturing electric wires and cable's since the year 1984. After the coming into force of the Central Excise Tariff Act, 1985, the petitioner company filed a declaration for availing of 'Modvat' benefits on December 13, 1988. Some time in March 1990, the petitioner company started manufacturing aluminium conductors and aluminium wires of aluminium not alloyed. In respect of these final products also the petitioner company availed of 'Modvat' benefits but did not file separate declaration. The petitioner company believed that since the input required for the manufacture of aluminium conductors and aluminium wires of aluminium not alloyed were same as required for the manufacture of electric wires and cables, it was not necessary for the petitioner company to file separate declaration. However, the petitioner company did make necessary entries in R.G. 23 and R.T. 12 and also mentioned necessary particulars in classification list The department considered that there was breach of appropriate provisions of the rules regarding availing of the 'Modvat' benefits. Therefore the department issued a show cause notice dated April 1, 1992 and demanded an amount of Rs. 3,81, 689.15 ps. from the petitioner company on the ground that the petitioner had availed of the 'Modvat' benefits wrongly in respect of the inputs for the final products namely, aluminium conductors and aluminium wires of aluminium not alloyed. The petitioner company filed reply to the show cause notice and register the same on facts as well as on law points. However, the Assistant Collector of Central Excise and Customs, i.e., respondent No. 2 herein confirmed the demand made in the show cause notice as per his order dated March 31, 1993. The said order was received by the petitioner company on April 28, 1993. After the receipt of the order, the petitioner company preferred an appeal on ,28-5-1993 as provided under Section 35-F of Central Excises and Salt Act, 1944, On the same day the petitioner company also submitted an application for dispensing with predeposit of the amount demanded. Despite the application having been made way back on May 28,1993, the same has not been decided so far. On the other hand, the petitioner has received a letter dated August 23, 1993 written by respondent No. 3 herein, that is Superintendent of Central Excise, Himatnagar, District-Sabarkanlha, asking the petitioner company to pay an amount of Rs. 3,81, 689.15 ps. The petitioner company has been threatened with action as provided under Rule 230 of Central Excise Rules, 1944 and Section 11-A of Central Excises and Salt Act, 1944 if the petitioner company did not pay the aforesaid amount. Hence this petition praying for quashing and setting aside the letter dated August 23, 1993 issued by respondent No.3 and for appropriate direction to respondent No. 4, that is Collector, Central Excise (Appeals) for hearing and deciding the application for stay of recovery of the amount of duty and also for dispensing with the predeposit of the amount of duty demanded.