2008 (6) TMI 43

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....re issued a show cause notice dated 16-10-1998 by the Superintendent Prohibition and Excise, Valsad. The notice referred to the audit report of the Accountant General for the years 1995-96 and 1996-97 pointing out that there was under valuation in respect of some of the goods manufactured and cleared by the petitioner and consequently there was a short levy of duty. The objections of the AG were mainly two fold. Firstly, in respect of some goods it was pointed out that the price declared by the petitioner did not include the labour costs. On this count a short levy of Rs. 1,86,892/- was pointed out. The second objection was that in respect of some goods the price declared for 100 gm pack was not double of the price declared for similar good....

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....ecide the revision application on merits in accordance with law as early as possible". The present RA has been filed in terms of the said order of the Hon'ble High Court of Gujarat along with an application for condonation of delay and a stay application restraining the State Excise Authority from recovering the duty till the present RA is decided. 2. In view of the narration of facts as stated above and the observation of the Hon'ble High Court of Gujarat the delay in filing the RA is condoned. As the matter can be decided on merits, I do not take up the stay application and proceed to decide the RA on merits. The petitioner was heard through their advocate Shri Suriyanarayanan. In the written and overall submissions it has been contended....

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..... I have carefully considered the written and overall submission and gone through the case records. I find considerable force in the plea that no demand can be made merely on the basis of an audit objection raised by the Accountant General. The audit objection can only be a starting point for enquiry and investigation by the excise department and a valid show cause notice setting out the grounds for demand of duty should be issued and thereafter a reasoned order passed as to why the demand is justified. That has not been done in this case. Further when the goods were declared on the basis of approved price list and there is no allegation that the prices were deliberately suppressed by the petitioner, or that any extra consideration was real....