MILTON PLASTIC INDUSTRIES Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) M/s. Milton Plastics Ltd. (MPL) and M/s. Milton Plastics Industries are sister concerns and related persons in terms of Sec. 4 of the Central Excise Act, 1944. M/s. MPI manufactured thermo flasks and discharged the burden of duty on prices at which the goods were sold by M/s. MPI. M/s. MPL effected clearances at their depot gate as well as at the gate of their Clearing and Forwarding Agents. Duty was to be calculated on the price prevailing at different places. The quantum of duty would be higher where the goods were cleared from the premises of C and F Agents. During the search of the office of M/s. MPI a document was found being a memo from M/s. MPL to M/s. MPI pointing out that during the period April, 1996 to August, 1997, M/s. MPI had short paid duty of Rs. 12,77,773.82. This authenticity of this document is accepted by both M/s. MPI and M/s. MPL. As to why the differential duty was not paid was explained by the officers of MPI. Show cause notice dated 14 -12 -1999 was issued seeking to recover this amount and also seeking to impose penalties. However, in April, 1999, the differential duty was paid by M/s. MPI. The Additional Commissioner confirmed the duty already paid and directed that the differential amount still not paid of Rs. 44,374 be paid immediately. He also imposed penalty of like amount under Sec. 11AC and of Rs. 1,00,000/ - under Rule 173Q(1) of the Central Excise Rules, 1944. Hence, the appeal and the present application for waiver of pre -deposit of the penalties and the balance amount of duty.

(2.) On behalf of M/s. MPI, it is stated that the direction to pay Rs. 44,374/ - is based on the wrong calculation. In certain cases, the price was charged by M/s. MPI lower than what formed the basis for calculation of payment of Shri Sejpal's duty. This point was not agitated later. As regards the penalties, first submission is where the duty had already deposited, there is no cause for imposition of penalty. He states this on the strength of judgment reported in 1999 (105) E.L.T. 56 and 1999 (107) E.L.T. 80. We have seen the judgments. The judgments are based on wrong appreciation of earlier judgments. Such cases cover the area where the assessee realises and accepts his mistake and makes to repair the damage. Such cases are not relevant in situation like this where the assessee himself points out that there is a short payment and still takes no corrective action. The letter pointing out the short payment was dated 23 -1 -1998. The search was on 23 -1 -1999 i.e. nearly after one year and payment of duty was in April, 1999. Even when the assessee knew that the documents were with the Department for 3 months, they did not care to do the needful. In such a situation, the benefit of judgments cited does not extend to the present applicants.

(3.) The other point urged is that the assessments were provisional and therefore, the question of imposition of penalty is not sustainable. The source of this claim is the letter dated 16 -2 -1997 in which the following paragraph occurs: