TAMILARASI TEXTILES Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) The short question that arises for consideration in this appeal is as to whether the impugned order -in -original NO.185/96 dated 2.12.96 has correctly quantified the duty liability in the matter and as to whether the Commissioner can impose consolidated penalty amount under Section 11AC of Central Excise Act which was not applicable during the relevant period and Rule 9(2), 52A, 173Q and 226 of C.E. Rules, and the last question to be decided is as to whether the appellants are entitled for deductions on the basis of cum duty price and further deductions claimed by them.

(2.) The Commissioner has also confiscated the goods which are cotton towels valued at Rs. 11.100/ - which have been directed to be released on fine of Rs. 1500/ -.

(3.) Ld. Counsel Shri Ravikumar does not contest the matter on merits with regard to clandestine manufacture and removal of cotton towels by the appellants on their purchasing cotton yarn and subjecting the same to bleaching, dying, and further converting into cotton towels, int he power loo,ms installed in their premises. However, it is his contention that quantification of duty has not been correctly arrived at including the value of the clearance. He submits that they had taken serious objection to the valuation aspect of the mater which has not been properly dealt with in the order. He contends that they had specifically claimed for the benefit of various deductions and also pleaded that the price was cum duty and in terms of Larger Bench judgement rendered in SRI CHAKRA TYRES - 1998 (108) ELT 361, they are entitled for the same. He further points out that penalty imposed is a consolidated one invoking section 11AC which was not in force alongwith other provisions of law. He relies on the Supreme Court judgement rendered in CCE Vs ELGI EQUIPMENTS LTD 2001 (128) 52 (SC) which clearly lays down that said section 11AC does not have retrospective effect for the purpose of imposition of penalty. Although, dutiability of the goods and its clearance without informing the department is not seriously challenged by the Counsel. However, he contends that they were holding genuine bonafide belief that the process carried out y them does not amount to manufacture, and hence on that the plea the demands cannot be confirmed for larger period extending 5 years. He relies on the following judgements : -