LAULS LTD Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE Commissioner of Central Excise by the impugned order confirmed the demand of Rs. 28,87,812/ -under Section 11A of the Central Excise Act, 1944 by invoking the extended period of 5 years. He also confirmed the amount of Rs. 13,595/ - under Section 11A of the Central Excise, 1944. He also imposed upon M/s. Lauls Ltd. the penalty of Rs, 29,01,407/ - under Rule 173Q(1) read with the provisions of Section 11AC of Central Excise Act, 1944.

(2.) THE facts of the case in brief are that the appellants are manufacturer of Ingots and articles of Iron and Steel. The appellants manufactured specific goods for supply to the Indian Railways. The Department got information that the appellant was raising escalation bills in which excise duty on the goods supplied was being collected but such duty collected was not being deposited in the Government account. The officers visited the factory on 20 -1 -97. The physical verification of the stock of goods was undertaken in the factory premises. 3,611 pieces of E.R. Clips, weighing 3.395 mt. valued at Rs. 90,636/ - involving Central Excise Duty of Rs. 13,595/ - were found short as against the recorded balance,

(3.) SCRUTINY of the documents revealed that the appellant was supplying goods to the Railways under a contract in which there was an escalation clause. The appellant had paid Central Excise Duty on the basis of value declared in the price list at the time of clearance of the goods. For the escalation amount the appellant raised bills separately. Statement of Shri C.S. Gupta, Director of the appellant -company was recorded who stated that he did not have any ready knowledge about any escalation of prices for supplies to Railways and realisation of such clues on account of such escalation. Documents were obtained from the Financial Adviser, Chief Accounts Officer and PVC escalation accounts from Kashmere Gate. Shri C.S. Gupta in his further statements stated that bills in respect of price variation clause (PVC) were got paid on the contracts. It was noticed that the appellant had raised bills covering the amounts both for supplies as well as escalation charges. The normal bills as well as the escalation bills raised were inclusive of excise duty and the appellant received payments accordingly. Shri C.S. Gupta in his statement dt. 13 -3 -97 admitted the raising of bills on account of escalation charges containing excise duty and receipts of payments accordingly. Scrutiny of the price lists revealed that the appellant filed price list for each contracts separately, the contract contained a price variation clause. The appellant received payment initially on the basis of G.P.I/invoices. Subsequently, the appellant raised bills on account of price variation clause, the appellant was required to intimate to the Department the raising of bills on account of price variation clause but the appellant did not do. Scrutiny of the documents further shows that the appellant had collected a sum of Rs. 28,87,812/ - as Central Excise Duty. Accordingly, a SCN was issued to the appellants asking them to explain as to why a sum of Rs. 28,87,812/ - collected as excise duty from the Railways and voluntarily debited by them should not be confirmed under Section 11A, why an amount of Rs. 13,595/ - debited in R.G. 23A Part II should not be confirmed and why a penalty should not be imposed on them. In reply to the SCN, the appellant submitted that they had already paid voluntarily the amount of duty of Rs. 28,87,812/ - and have no objection if this amount is confirmed. They also raised no objection to confirmation of the amount of Rs. 13,595/ -which they had voluntarily paid. They also submitted that Section 11AC was not applicable in their case because the duty demand pertains to the period 19 -10 -92 to 27 -5 -96 whereas Section 11AC was incorporated in the statutes on 27 -9 -96. In support of this contention they cited and relied upon the decision of the Hon'ble Supreme Court in the case of UOI v. Madan Gopal, AIR 1954 SC 158 and in the case of Collector of Central Excise v. Ashoka Mills Ltd. reported in 1989 (43) E.L.T. 797 (S.C.) = AIR 1989 S.C. 33. After careful consideration of the submissions made the ld. Commissioner held as indicated in the preceeding paragraph.