NEW DECENT FOOTWEAR INDUSTRIES Vs. CCE, KANPUR

JUDGEMENT

(1.) THE appellant is a partnership firm. It has got two units, both located at Resham Katra, Taj Ganj, Agra. The firm got the central excise licence for unit No. 1 only. On 3.9.1993, raid was conducted on both the units of the appellants firm. In unit No. 1, certain excess and shortage of the footwear's were found for which separate show cause notices were issued. Similarly in unit No. 2, some irregularities were found and show cause notice was separately issued. Thereafter, statement of Mohmad Suhail, partner of the appellant firm was recorded who explained that unit No. 2 was engaged in the manufacture of footwears without the aid of power, while unit No. 1 with the aid of the power. He also explained that both the units were exporting the footwears and also supplying the footwears to M/s. Bata India Ltd. On 18.7.1996, show cause notice was issued to the appellant firm and its partners namely Mohmad Sahail, Mohmad Zubair and Mohmad Tariq, vide which duty demand was raised against the appellant firm and penalty was proposed to be imposed on its above said partners. Similarly, notice was also issued to M/s. Bata India Ltd., for imposition of penalty under rule 209A of the Rules. Later on, through corrigendum, dated 30.1.1997 for imposition of penalty under Section 11AC was proposed. The Commissioner adjudicated the abovesaid show cause notices against all the above said parties and confirmed the duty demand on the appellant firm and imposed penalty on its partners named above. He also imposed penalty on M/s. Bata India Ltd. under rule 209A of the Rules, through the common Order -in -original dated 1.4.1998.

(2.) THE said order of the Commissioner was, however, set aside by the Tribunal in appeal, against the partners of the appellant firm as well as against M/s. Bata India Ltd. but was affirmed against the appellant firm, through the common order dated 29.5.2000. The ROM application of the appellant firm against that order was also dismissed by the Tribunal.

(3.) THE learned counsel has raised only question of limitation before us. He has contended that demand for the entire period from 12.8.1991 to 31.3.1994 is time barred, as the show cause notice was served only on 18.7.1996. According to the counsel, the excise department knew about the manufacturing activity of both the units of the appellant and the appellant firm had not suppressed any facts from the excise department regarding their activity, with intent to evade duty and had not even earned unlawful gain, as no duty was charged from M/s. Bata India Ltd. to whom the footwears were supplied by the appellant firm. He has also contended that even the penalty against M/s. Bata India Ltd. had been set aside by the Tribunal which was imposed under rule 209A for having received the goods, with the full knowledge about non -payment of duty in respect thereof, by the appellant firm. The charged of connivance of the appellant firm with M/s. Bata India Ltd. in the evasion of duty, therefore falls to the ground when M/s. Bata India Ltd. had been exonerated by the Tribunal, by quashing the penalty against them.