SWADESHI POLYTEX LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) IN this appeal filed by M/s. Swadeshi Polytex Ltd., the matter relates to the dutiability of 3 silos, 1 tank and piping, which the appellants got fabricated during 1990 -91 through job contractors. In the show cause notice dated 6 -12 -93, it was mentioned that the Central Excise Officers had visited the factory premises of the appellants on 17 -5 -91 and found that the appellants had manufactured /fabricated the above structural items in their factory premises. The statement of the Manager (Purchase) of the appellants' Company was recorded on 17 -5 -91 itself. The cost of the items was furnished by the appellants under their letter dated 16 -7 -91 and a Certificate from the Chartered Accountant was furnished in this regard under letter dated 26 -8 -91. In reply dated 16 -2 -94 to the show cause notice, among other grounds, it was pleaded in para -7 of the reply that the demand was time barred. The Collector of Central Excise, Meerut, who adjudicated the matter, did not agree with the contention of the appellants that the demand was time barred and that there was no justification for invoking the extended period of limitation. He observed that a Company like M/s. Swadeshi Polytex Ltd., which were paying excise duty in crores, could not claim that they were under bona fide belief regarding non -leviability of the duty on the goods in question. He confirmed the demand of Rs. 4,21,378.65 and imposed a penalty of Rs. 1,00,000/ -.

(2.) THE matter was heard on 28 -7 -2000 when Shri Man Mohan Sharma, Company Secretary and Advisor to the Company, among other pleas, submitted that the erection of silos, tank, piping, etc. was in the knowledge of the Department and that there could not be suppression of erection of huge structural in the factory premises, he also submitted that the appellants' factory was closed since 1998 because of financial problems and dispute regarding ownership. In reply, Shri Sheo Narayan Singh, SDR referred to para -10 of the adjudication order, wherein the contention of the appellants with regard to time bar had been discussed. On merits he referred to the Supreme Court's decision in the case of Sirpur Paper Mills Ltd. v. Collector of Central Excise, Hyderabad - 1998 (97) E.L.T. 3 (S.C.) and Tribunal's decision in the case of Central Coal Fields Ltd. v. Collector of Central Excise, Jamshedpur -1999 (106) E.L.T. 476 (Tribunal).

(3.) ON careful consideration of all the relevant aspects of the matter, we observe that for raising the demand of Rs. 4,21,378.65 extended period of limitation had been invoked for which in our view, there was no justification. It is seen from the show cause notice dated 6.12.93 that the central excise officers of Division -Ill, Ghaziabad had visited the factory premises of the appellants on 17 -5 -91, and noticed that the appellants had manufactured/fabricated three silos, one tank, piping and other structural items at their factory premises. The statement of the Company's Purchase Manager was recorded under Section 14 of the Central Excises Act, 1944, on the spot on 17 -5 -91 itself. The Purchase Manager in a signed letter on that very date had detailed as how the silos, tank and piping were installed by the Company. It was explained that the processes involved elaborate mechanical jobs, welding, testing, etc. The process of carrying out mechanical jobs was described as under : -