1987 (4) TMI 349

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....d free of duty to be used as original equipment and components in further manufacture of motor vehicles, engine assembly, etc., under Notifications 74/79-C.E., 75/79-C.E. and 167/79-C.E. All these notifications required that the concession in respect of such parts should follow the procedure set out in Chapter X. Mr. Kumar said that all the removals from their factory were under Chapter X of the Central Excise Rules. Under Rule 196 of this Chapter, if any of the goods obtained at concessional rate are not accounted for in the manner required in the application and in the manner that they were required to be used, the applicant must pay the duty leviable on such goods on demand by the central excise officer. In Rule 192, the applicant refers....

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....ctor of Central Excise, however said that the goods were manufactured by M/s. Madras Radiators and as manufacturers they are liable for the duty until the goods are shown to have been used and disposed of in accordance with the law. Furthermore, he pointed out the fact that duty was demanded under Section 11A of the Central Excises and Salt Act and this can concern only the seller-manufacturer and not the buyer-manufacturer. * 4. The argument by the learned SDR is correct, so far as it goes, but unfortunately, the demand under Section 11A cannot serve this purpose. Section 11A, in fact, is not applicable to a case like this, because it is not a case of duty of excise which has not been levied or paid or which has been short levied or sho....

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....fficer can discover that there has been a deficit in duty and that the deficit is not sanctioned by the law and that his next duty must be to take suitable steps to recover, by demands, such short paid duty. The proof for this is in the fact that the period in these proceedings is August, 1980 to July, 1981; the show cause notice issued in December, 1981 would place all but the last clearance out of reach of the demand notice (the five year period is not available since there is no allegation of fraud or collusion or suppression which would have been signified by an imposition of penalty, which is absent). Evidently, when the assessing officer saw the returns, he could not find any short levy; hence he took no recovery steps. As a matter of....