1984 (8) TMI 325

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....m 68 in the C.E. Tariff w.e.f. 1-3-1975, premises manufacturing utensils were segregated and this was within the knowledge of Excise Department. Excise Officers were regularly visiting appellants' factory and keeping a watch on utensil manufacturing Section and the Section manufacturing articles falling under T.I. 26A. The appellants further claim that they were receiving Gullies from other customers for rolling on job basis and the appellants charged only rolling charges of 40 paise per kg. from them. They also claimed that part of the manufacture is without the aid of power. After the introduction of T.I. 68 and issue of Notification No. 176/ 77-CE, date 18-6-1977, the Excise authorities required information about the value of appellants' clearances and this the appellants submitted to the authorities. They further claim that the value of their clearances was well within the limit stipulated under Notification No. 176/77-CE. The Assistant Collector of Central Excise issued show cause notice dated 1-10-1980 calling upon them to show cause to the Deputy Collector why not demand of duty be made from them as they were not entitled to benefit of concession under Notification No. 176/7....

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....n consumed in the factory and value of such circles captivcly consumed ought not to have been taken into consideration in computing the value of appellants' clearances during the relevant period. In support of his arguments, he relies on the following decisions : (i) Free India Dry Accumulators v. Union of India & Ors. - 1980 E.L.T. 168 (Calcutta) and (ii) Narendra Engineering Works v. Union of India & Ors. - 1981 E.L.T. 859 (Bombay). 4. Sh. V. Lakshmi Kumaran, learned S.D.R. on behalf of the respondent controverted Sh. Kapil's arguments. He distinguished the decisions cited by Sh. Kapil and in particular submitted that the Supreme Court's decision in Union of India & Ors. v. Bombay Tyres International - 1983 ECR 1627-D (SC) = 1983 E.L.T. 1896 had over-ruled the decision relied on by Sh. Kapil and that even if the appellants were job workers the value of raw materials and job work charges would both be taken into consideration in determining the value of appellants' clearances. He however did not dispute that under Notification No. 246/77-CE, dated 15-7-1977 for the purpose of determining the value of clearances under Notification No. 176/77-CE dated 18-6-1977 goods c....

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....the notification are set out below :     1976-77 Qty. kgs. Job charges Rs. Value Rs.   Circles issued to utensils Section (captive consumption) 43955.3 16139.41 16139.41   Rolled for others on job charges 177801.8 69258.91 69258.91   Clearances of utensils Rs. 1986240.96       Clearances of circles as such Rs. 2544676.77 (Rs. 254676.77 ?)       Job charges received from others for rolling circles Rs. 69258.91       Total value 23,10,176.64     Out of the above figures, circles weighing 43,955.3 kg. which were used in captive consumption and their value would have to be excluded in view of Notification No. 246/1977-CE, dated 15-7-1977 and disputing of the argument by the other party, it is now to be seen whether in determining the value of appellants' clearance job charges and circles rolled out of gullies by the appellants weighing 1,77,801.8 kgs. and job charges Rs. 69,258.91 should be included. It may be mentioned that during the arguments, Sh. K....

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....en manufactured and cleared from the factory long back. Then it was also unimaginable that a Rolling Mill could run without mechanical energy and power. Admittedly, the appellants' factory uses power. To claim that part of utensils are made without the aid of power when the factory is using power is a plea which is clearly not acceptable. As to the appellants' claim that the demand was time barred, because the Excise department was in full knowledge of the appellants' activities, we do not find any merit in this contention also. There is no clear evidence that excise authorities were in full knowledge of appellants' quantum of production. The learned Collector in rebutting appellants' plea of time bar held as under: "This argument, to say the least, is derisive. The utensils manufactured by rolling units became dutiable as a result of issue of Notification No. 176/77, dated 13-6-1977, as the notification stipulated that such units will pay duty on goods falling under T.I. 68 whose value of clearance had exceeded Rs, 30 lakhs in the preceding financial year. The scrutiny of classification lists for the relating period reveal that the party did not mention about manufacture of ....