PREMIER INSTRUMENTS AND CONTROLS Vs. CCE

JUDGEMENT

(1.) THIS appeal is against an order passed by the Commissioner of Central Excise in adjudication of a show -cause notice which sought to make out a case of clandestine removal of excisable goods, against the appellants. In the impugned order, the adjudicating authority demanded duty amounting to Rs. 56,86,750/ - on waste and scrap cleared from their factory at Coimbatore during the period November 1993 to September, 1998. Another demand of duty was raised on finished goods to the extent of Rs. 77,79,456/ - Yet another demand of duty raised in the impugned order is on components of original equipments, removed from the appellants' factory at Coimbatore (Unit No.1) to their own factory at Gurgaon (Unit No.2). This demand amounts to Rs. 42,66,759/ - All these demands are for the same period. The relevant show -cause notice was issued on 2.12.98 under the proviso to Section 11 A(1) of the Central Excise Act. It alleged "wilful misdeclaration, suppression of facts and contravention of rules with intent to evade payment of duty" for the propose of invoking the proviso. In the impugned order, ld. Commissioner justified the invocation of extended period of limitation by recording a finding of "suppression" in para 52 of the impugned order. He also imposed a penalty of over Rs. 1 crore on the assessee under Rule 173 Q of the Central Excise Rules for the period November 1993 to 28.9.1996 and another penalty of Rs. 40 lakhs under Section 11 AC read with Rule 173 Q for the period 29.9.96 to September, 1998.

(2.) WE have examined the records and heard both sides. Ld. Sr. Counsel has chosen to address the penalty issue first. According to him, both the penalties are liable to be vacated in view of the fact that the entire amount of duty had been paid prior to issuance of the show -cause notice. Ld. Sr. Counsel has relied on the Tribunal's Larger Bench decision in CCE, Delhi v. Machino Montell (I) Ltd [2004 (168) ELT 466 (TRI.LB). as also on the Tribunal's decision in. Rashtriya Ispat Nigam Ltd v. CCE [2003 (161) ELT 285 (Tri)]. It has also been pointed out that the Revenue's appeal against the Tribunal's decision in the case of Rashtriya Ispat Nigam Ltd. (supra) was dismissed by the apex Court vide 2004 (163) ELT A.53 (S.C.). The view thus approved by the Apex Court is that, where duty was paid prior to the issuance of show -cause notice, no penalty is imposable under Section 11 AC or Rule 173 Q.

(3.) LD . Sr. Advocate has referred to the demands of duty in three categories. The demand of duty on waste and scrap is the first category wherein, he submits, the entire demand was based on computer print -out covering the period February 1996 to September 1998, which was generated from a personal computer of a junior officer of the appellant -company. The Statements of the said officer (Shri G. Sampath Kumar) were also relied on for raising this demand. But none of the statements of Shri Sampath Kumar offered any explanation or clarification of the relevant entries of the computer print -out. Certain references made by Shri Sampath Kumar were not to be found in the print -out. His personal computer had nothing to do with the normal activities of the Company. The statutory requirements for admitting a computer print -out in evidence were not fulfilled. The statements given by Shri Sampath Kumar were not accepted by the Company. No competent authority in the Company was confronted with anything contained in his statements or in the computer print -out. For these reasons, neither the computer print -out nor any statement of Shri Sampath Kumar provided any basis for demand of duty on waste and scrap. Ld. Sr. Counsel has made similar submissions with reference to the statements of Shri P. Eswaramurthy (Dy. Manager (Stores) of the company) who agreed with the statements of Shri Sampath Kumar. Ld. Counsel has further submitted that, in any case, the computer print -out or any statement made on the basis thereof could not be used for demanding duty for the period November, 1993 to January, 1996. In this connection, ld. Counsel has relied on the Tribunal's decision in International Computer Ribbon Corporation v. CCE, Chennai [2004 (165) ELT 186]. It has also been contended that no positive evidence was available to show that the appellants had clandestinely cleared waste and scrap during the period of dispute.