1988 (10) TMI 156 - AT - Central Excise

Dismissal of Appeal Upholding Central Excise Rules on Sodium Sulphide Manufacturing

The appeal was dismissed by the Bench, upholding the lower authority's orders. The appellants were manufacturing sodium sulphide without complying with ... Demand - Limitation Issues Involved:The judgment involves issues related to contravention of Central Excise Rules, 1944, specifically Rules 9, 52-A, 173-B, 173-C, 173-G, and 174, failure to obtain Central Excise License, maintain statutory records, declare the value of goods, and pay Central Excise duty exceeding the production exemption limit, resulting in duty evasion.Contravention of Central Excise Rules:The appellants were found manufacturing sodium sulphide falling under Central Excise Tariff Item No. 68 without complying with various Central Excise Rules. The Additional Collector confirmed the duty demand and imposed a penalty, leading to the appeal before the Bench.Limitation for Demand of Duty:The appellants argued that the extended period of limitation for demanding duty was not applicable as there was no allegation of suppression of facts or fraud in the show cause notice. They cited case laws to support their contention and highlighted factors like the remote location of their factory and lack of awareness about changes in notifications.Intent to Evade Duty:The appellants claimed no intention to evade duty willfully, citing the presumption of the production exemption limit being Rs. 30 lakhs before and after 1979. However, the Bench rejected this defense, emphasizing the manufacturer's responsibility to stay informed about duty liabilities and pay taxes correctly.Compliance with Statutory Obligations:The departmental visits to the unit were noted, but it was clarified that such visits did not excuse the manufacturer from fulfilling statutory requirements such as making correct declarations, obtaining licenses, maintaining records, and clearing goods after paying due duty.Allegations of Suppression and Evasion:The show cause notice detailed various violations by the appellants, including failure to file declarations, clear goods without payment of duty, and evade Central Excise duty. The Bench found these allegations justified the extended time limit for demanding duty, rejecting the appellants' arguments based on case laws cited.Correct Invocation of Central Excise Rules:The Bench concluded that the case involved contravention of Rule 9(1) of Central Excise Rules, 1944, and the invocation of Rule 9(2) in the show cause notice was appropriate. Consequently, the appeal was dismissed, and the lower authority's orders were upheld.