HIND NIPPON RURAL INDUS. PVT. LTD Vs. CCE

JUDGEMENT

(1.) THIS appeal is directed against order -in -original No. 13/97 dated 31.10.1997 of the Commissioner of Central Excise, Bangalore. This order was passed pursuant to the order of remand passed by this Tribunal vide final order No. 379/96 -D dated 31.5.1996. For understanding the true scope of the direction contained in the Tribunal's order, we read relevant portion of the order below:

(2.) THE only question left for determination is as to whether larger period is invokable in the present case. The learned advocate has relied on the letter dated 17.5.1983 addressed to the Inspector. The letter has got seal of the Inspector and signature of some person. This letter has not Been adverted to in the finding. The Learned DR has expressed a doubt about its genuineness and also submits that the appellants had not informed about their activity to the department. This aspect of the matter has not been looked into by the Learned Collector and no verification about the receipt of the letter appears to have been done by the department. It is also not known as to whether any of the Directors who were examined by the department officials had stated about this letter and whether such a plea had been raised at earlier stage. Therefore, in the fitness of things, it is necessary that the matter is remitted back to the Commissioner for de novo consideration only on this aspect of the matter and also to consider remission of duty on exported items. The Learned Commissioner shall examine the plea of limitation as raised by the appellants before the Tribunal and also with regard to the valuation and remission of the duty after giving them due notice of hearing and decide the case de novo. In the present order, the Commissioner has held that the extended time limit under Section 11A of the Central Excise Act, 1944 is available as the letter dated 17.5.1983 of the appellant is not found in the Central Excise record. In reaching this conclusion, he has also relied on the fact that the said letter was not mentioned by the Director of the appellant, Shri A.K. Agarwal in his statement dated 23.8.1986 and also that the letter appears to be tampered with. With regard to remission of duty on account of export of the goods, the Commissioner has held that export has not been proved with documents or bank statements; instead only a certificate of the Chartered Accountant has been filed. In view of these findings, the Commissioner has reconfirmed the duty to the extent of Rs. 16,17,190.83.

(3.) THE appellants have submitted in the present appeal that the Commissioner's finding that the extended period for demand of duty under Section 11A is available to the Revenue is not correct and has been reached without proper appreciation of evidence. It has been submitted that the letter dated 17.5.1983 of the appellants had been received and acknowledged by the Inspector of 'C Range of the Mangalore Division and the Commissioner should have called the officer for examination during the proceedings and if necessary, allowed him to be cross -examined by the appellants. Instead of ascertaining facts through such a course, as requested by the appellants, the Commissioner has brushed aside the letter by making the aforesaid observations which are not reasonable at all. The Commissioner's observation regarding tampering with the letter is not relevant at all as the appellants had no requirement to tamper with the letter at all, if the same was a subsequently created letter sought to be introduced as evidence. Similarly, no adverse inference could be drawn from Mr. Agarwal's not mentioning this letter in his statement given about three years after the filing of the letter. The appellants have also submitted that the whole issue as to whether cutting of blocks of rocks into slabs amounted to manufacture itself was in doubt during the relevant period. They have, in particular, referred to the order -in -appeal No. 260/86H dt. 19.12.1986 issued by the Collector of Central Excise (Appeals), Madras. In this order, the Collector held in an appeal filed by M/s. Indian Granite Ltd. that (i) mere cutting and polishing of granite slabs does not amount to manufacture of any new product and (ii) the ornamental granite slabs may be classified as products of the handicrafts industry eligible for exemption as per Notification No. 76/86 dated 10.2.1986. The appellants have contended that the departmental authorities as well as the trade was under the impression during the relevant time that the appellant's activity did not amount to manufacture and, therefore, no levy of excise duty was involved. That the appellants had no intention to conceal their activity or to evade payment of duty is clear from their letter dated 17.5.1983. They were also an EOU working under customs procedure and were expected to export about 98% of their produce. In that context also the Revenue authorities were aware of their activities. In these circumstances, the appellants strongly contend that the charge of suppression of facts with intent to evade payment of Central Excise duty cannot stand against the appellants and the demand is required to be limited to the normal period for recovery of duty not paid as contained in the main part of Section 11A.