GTC INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) In this appeal which has been preferred against the impugned order in appeal, the controversy relates to the interpretation of Notification No. 355/86 -CE dated 24.6.1986 on the strength of which the appellants had paid less duty on the final product (Machine Rolled Cigarettes) but recovered more during the period in dispute from the customers and the Commissioner (Appeals) through the impugned order, has reversed the order in original of the adjudicating authority who dropped the proceedings for recovery of excess amount collected as duty by the appellants, under Section 11D of the Act.

(2.) The learned Counsel has contended that notification No. 355/86 -CE dated 24.6.1986 allowed only set off of the duty paid by the appellants on the input cut tobacco used in the manufacture of cigarettes, towards the duty payable on the final product i.e. cigarettes and as such, they should be deemed to have paid full duty on the final product and thus were within their right to recover the full duty from the customers. He has also contended that on the final product i.e. cigarettes, the amount of duty payable by the appellants did not change, only mode of payment of duty was altered through the above said notification by allowing the appellants to claim set off on the duty already paid on input (cut tobacco) used in the manufacture of the final product. Therefore, the appellants having paid full duty on the final product had rightly recovered the same from the customers. The provisions of Section 11D could not be invoked against them. To substantiate his contentions, the Counsel has placed reliance on the law laid down in Bripanil Industries Ltd. v. Commissioner of Central Excise Bangalore , J.K. Synthetics 1996 (81) ELT 648, Atul Products Ltd. v. CCE Surat 2000 (123) ELT 697 : 2000 (88) ECR 449 (T) and Good Year India Ltd. v. Union of India 1999 (49) ELT 39.

(3.) Another contention raised by the appellants is that the demand is time barred as show cause notice was served on the appellants on 5.12.2000 whereas the fact of the appellants having recovered the duty from the customers came to the knowledge of the department much earlier to that when letter dated 1.11.1994 was sent by the Assistant Commissioner to them. In this regard, the Counsel has placed reliance on the law laid down in Government of India v. Citedal Fine Pharmaceuticals .