RAVI AGRICULTURAL INDUS. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE above captioned appeals have been filed against the common order -in -original dated 1 -6 -2001 passed by the Commissioner of Central Excise vide which he has confirmed the duty demand on appellant No. 1, M/s. Ravi Agricultural Indus, with penalty, and also imposed penalties on other two appellants as detailed in the order itself.

(2.) THE firm, appellants No. 1, was engaged in the manufacture and sale of I.C. Diesel Engines and Diesel Generating Sets. The factory premises of the firm, appellants No. 1, was visited on 15 -11 -1997 and the officers of the Central Excise resumed some records and also seized excess stock 63 of Brand Engines and 18 D.G. Sets. The statement of Shri Radha Raman Garg was also recorded. From the examination of the record, it revealed that the appellants had suppressed the production of the engine during the period 1 -4 -1997 to 14 -11 -1997. Some loose invoices were also seized vide which the goods were allegedly cleared and it also came to the notice of the Central Excise Officers that duplicate invoices by using same numbers were being used. On completion of investigation, show cause notice was served on the appellants vide which duty demand of Rs. 15,77,839/ - was raised from the firm, appellants No. 1, while penalty was also proposed to be imposed on the firm as well as on the other two appellants, being partners of the firm. The appellants contested the correctness of the show cause notice. They denied the clandestine manufacture and removal of the engines and D.G. sets. They also averred that the firm was working under the Modvat scheme and availed the benefit of duty paid on the components/parts used in the manufacture of the diesel engines and D.G. sets and that the credit available to the firm was more than the duty payable on the finished goods and as such there was no question of their clandestine manufacture and removal of the goods. They further averred that no discrepancy in the RG -23 -AI & II accounts had been found and that the charge of clandestine removal was not maintainable for want of any discrepancy in the raw material/component parts. The Commissioner, however, did not agree with their version and passed the impugned order confirming the duty of Rs. 15,77,839/ - with penalty of Rs. 3 lakhs under Rule 173Q, and also of duty of Rs. 13,47,729/ - with equal amount of penalty under Section 11AC payable with interest and also imposed penalty of Rs. 5 lakhs each on appellants Nos. 2 and 3.

(3.) THE learned Counsel for the appellants, at the outset, had contended that the duty demand raised for the period 1 -4 -1997 to 14 -11 -1997 through the show cause notice dated 26 -6 -2000, is apparently time barred and that no extended period could be invoked legally as the Modvat credit available to the firm, appellants No. 1, was at much higher rate than the rate at which the duty was payable on the clearance of the finished goods, i.e. diesel engine and D.G. sets. The impugned order, according to the learned Counsel is liable to be set aside on this short ground alone. In support of his contention, the learned Counsel has placed reliance on Associated Cement Cos. Ltd. v. CCE, Coimbatore, 2001 (132) EX.T. 794 (T), wherein it has been ruled by the Tribunal as under :