TaxTMI 
TaxTMI 
1980 (10) TMI 65
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....directions is a good ground' for penalizing them. And this is how the dilemma has arisen. 2. Petitioner society was required to pay duty at the rate of Rs. 50 per loom per annum by way of compounded levy permissible under Rule 96J read with the relevant notifications. The society sought guidance from the competent authority on the question as to whether or not there was any ceiling on the number of looms that can be operated under the scheme of compounded levy. The Assistant Collector of Central Excise, Ahmedabad, by his letter dated March 20, 1969 had informed them that excise duty was payable at the rate of Rs. 50 per powerloom per annum, provided that not more than four powerlooms were operated by each member. No other rider was added....
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.... from it as the petitioner society was not entitled to the benefit of concessional notification under which duty at the compounded rate was payable. In the wake of the aforesaid show cause notice dated September 26, 1972 as per Annexure `F' of the Superintendent Central Excise, Patna, the Assistant Collector of Central Excise, by his impugned order Annexure `A' confirmed the demand to the tune of Rs. 34,896.41 P. by his order dated Nil August 1975. It appears that the Assistant Collector waived its demand for a sum of Rs. 2,00,762.47 P. but did not accept the contention of the petitioner society in respect of the demand for the sum of Rs. 34,896.41 P. which amount the petitioner society was called upon to pay. 3. The petitioner society a....
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........ for the period satisfied .............. if Assistant Collector is .............. This then the demand should in accord to this extent. Consequential relief shall be granted to the appellants." (emphasis added) It will be seem that the order passed by the Assistant Collector was modified by the Appellate Collector insofar as the period from July 12, 1972 to August 31, 1972 was concerned in view of the statement made on behalf of the petitioner society that as soon as the Department apprised the petitioner society of the changed stand it had dismantled 17 out of 65 looms. The Appellate Collector directed the Assistant Collector to verify the correctness of the statement and to reduce the demand to the appropriate extent in respect ....
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....umber of the looms operated by it if operated under one roof; (2) No objection was raised by the Department in this behalf till 1973; (3) It was only for the first time on May 15, 1972 that the Department issued a communication as per Annexure `N' assuming the posture that benefit of concession of compounded levy would be available provided and only provided the number of looms operated by the manufacturer did not exceed 49. The preamble of this communication firmly establishes that it was assumed by all concerned that was not a relevant consideration and it was only later on the doubts were raised in regard to the limitation of number of powerlooms only at about the time of the issuance of the said clarificatory letter. The preamble may be....
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....he date of issuance of the clarification notwithstanding the fact that previously the petitioner society was acting in conformity with the view of the Department and was operating more than 49 looms in view of the written authority given by the Assistant Collector way back in 1969 in no unambiguous terms. The Department itself realised that the situation was of its own creation and dropped the demand for the period anterior to May 15, 1972 on which date the clarification was made in regard to the change in policy. It was for the first time that the manufacturers including the petitioner society were informed by the clarificatory notification that the concession would not be available in case the number of powerlooms being operated exceeded ....
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....e concession to the period upto May 15, 1972 and in dropping the demand upto that date only. The same considerations which obtained in regard to the period upto May 15, 1972 applied to the period upto July 12, 1972. The competent authority has committed an error on the face of the record in disregarding the fact that it was necessary to show when exactly that notification was issued and not merely to show that it bore a particular date line. In the light of the aforesaid discussion, the competent authority must be directed to drop the demand till July 12, 1972. 7. The learned Counsel for the petitioner is also right in his submission that the Appellate Collector having upheld the contention in regard to the period subsequent to July 12, ....