TaxTMI 
TaxTMI 
2025 (12) TMI 1550
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....duty in respect of clearance of final goods during the month of April 1996 and May 1996 and thereafter, paid full duty from the month of June 1996. M/s. PTPL surrendered their registration on 28.10.1996 and thereafter, the present appellant M/s. Pankil Textiles obtained registration on 15.11.1996. 2.1 The appellant claims that they are entitled to concessional rate of duty on first clearance as prescribed under SSI Notification whereas, as per department since earlier owner (M/s. PTPL) had crossed turnover of Rs. 300Lakhs in 1995-96, hence as per provisions of Notification No. 1/93-CE dated 28.02.1993, the new owner shall not be entitled to duty free clearances during 1996-97. The department issued Show Cause Notice bearing No. R/VI/Pankil/97 dated 30.05.1997 and R/IV/Pankil/97 dated 12.08.1997 demanding Central Excise duty of Rs. 4,52,485/- for the period from November 1996 to February 1997 and for duty of Rs. 2,46,369/- for the month of March 1997 respectively, under Rule 9(2) of the erstwhile Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944 alongwith penalty under Rule 173Q and Rule 209A respectively. The said matters were initially adjudicated....
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....e rate applicable is 50% now the full amount has been deposited. Since both sides agree that the matter has to go back to the original adjudicating authority to verify this aspect, we remand the matter to the original adjudicating authority to decide whether applicable rate is 40% or 50% and settle the issue accordingly." 3.2 In compliance of this order, the jurisdictional Deputy Commissioner verified the fact and held that the applicable rate of basic excise duty during the period April and May 1996 was 50% and the earlier owner M/s. PTPL were required to pay duty @ 50%. Since the appellant has not paid differential duty on behalf of the earlier owner, they are not entitled to benefit of SSI exemption for clearances made by them during November 1996 onwards. He accordingly, confirmed the differential duty of Rs. 6,98,854/- (Rs. 4,52,485/- + 2,46,369/-) on them alongwith interest and penalty of Rs. 6Lakh. 3.3 Aggrieved with this order, the appellant filed appeal before the Commissioner (Appeals) who vide impugned order dated 20.08.2013, rejected the appeal and upheld the order of the lower authority. Hence, the present appeal. 4 The appellant has taken the following ground....
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....on 04.09.2025, he, vide letter dated 20.11.2025 submitted copies of RT-12 returns of M/s. PTPL from March 1996 to October 1996 and also duty payment details to show that the earlier owner had paid duty at the full rate and thus, did not avail any SSI benefit. A perusal of said RT-12 return reveal that M/s. PTPL had availed concessional rate of duty (paid @ 40% instead of 50%) on clearances effected during April 1996 and May 1996 but later on paid the differential duty as given below:- M/s. PTPL -Surat Unit Sr. No. Duty paid (in Rupees) Payment details BED AED (T&TA) 1. 1,03,063/- 15,459/- Part II entry No. 53 dated 27.05.1996 2. 72,308/- 10,847/- TR 6 dated 22.01.2007 Total 1,75,371/- 26,306 M/s. PTPL -Kim Unit Sr. No. Duty paid (in Rupees) Payment details BED AED (T&TA) 1. 1,00,003/- 15,000/- TR 6 dated 09.08.1996 Pt II entry No. 168 dt. 31.08.1996 2. 1,00,003/- 15,000/- Part II entry No. 168 dt. 31.08.1996 3. 50,000/- 7,500/- Part II entry No. 174 dt. 04.09.1996 4. 90,000/- 13,500/- Part II entry No. 180 dt. 09.09.199....
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....s not exceeding Rs. two crores in preceding year In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the said Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specified in the Annexure below and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), (hereinafter referred to as the "specified goods"), and cleared for home consumption on or after the 1st day of April in any financial year, by a manufacturer from, - (1) a factory, which is an undertaking registered with the Director of Industries in any State or the Development Commissioner (Small Scale Industries) as a small scale industry under the provisions of the Industries (Development and Regulation) Act, 1951 (65 of 1951),- (2) (a) in the case of first clearances of the specified goods upto an aggregate value not exceeding rupees thirty lakhs - (i) in a case where a manufacturer avails of the credit of the duty paid on inputs used in the manufacture of the sp....
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....isions of the Industries (Development and Regulation) Act, 1951 (65 of 1951), - in the case of first clearances of the specified goods upto an aggregate value not exceeding rupees ten lakhs from whole of the duty of excise leviable thereon. 2. The aggregate value of clearances of the specified goods for home consumption in a financial year - (a) by a manufacturer from one or more factories; or (b) from a factory by one or more manufacturers, - (i) under sub-clause (a) of clause (1) and clause (2) of paragraph 1 taken together shall not exceed rupees thirty lakhs; (ii) under sub-clauses (b) and (c) of clause (1) shall not exceed rupees twenty lakhs and twenty-five lakhs respectively; and (iii) under clause (2), shall not exceed rupees ten lakhs. 3. Nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption, - (a) by a manufacturer, from one or more factories, or (b) from any factory, by one or more manufacturers, had exceeded rupees two hundred lakhs in the preceding financial year. 4 & 5 .......... .........
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....eration the fact that till M/s. Bhavana Apparells commenced manufacture, the factory was one and even after the lease the alteration of the licensed premises was not approved and the further fact that the same machinery had been used by both, we are satisfied that the factory was one throughout the year, though the manufacturing activity may have been carried on by the two appellants during separate periods (as had been accepted by the lower authorities also)". While arriving at this decision, the Tribunal also referred the judgment of Hon'ble Gujarat High Court in the case of Indica Laboratories Pvt. Limited Vs. UOI - 1990 (50) ELT 210 (Guj.). 6.4 In view of above, we hold that the present appellant (M/s. Pankil Textiles) will not be entitled to SSI benefit for their clearances with effect from 24.11.1996 under Notification No. 1/93-CE dated 28.02.1993, as amended. 6.5 As regards appellant's contention that both the Show Cause Notices have been issued by the jurisdictional Range Superintendent who was not entitled to issue Show Cause Notice. We find that, at the relevant time, Superintendent was the proper officer to issue Show Cause Notice for demand of duty within a....
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.......... (d) Contravenes any of the provisions of these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the [manufacturer, producer, registered person of a warehouse or a registered dealer), as the case may be, shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (bb) or clause (bbb)] or clause (c) or clause (d) has been committed, or five thousand rupees, whichever is greater. Under both the rules, penalty upto a maximum not exceeding three times the value of excisable goods can be imposed. We also find that wrong mention of the Rule does not vitiate imposition of penalty by the Adjudicating Authority as held by Delhi bench of Tribunal in the case of Asian Alloys Limited vs. CCE, Delhi-III reported at 2006 (203) ELT 252 (Tri. Del.). The relevant para 15 is reproduced below:- 15. The contention raised on behalf of the appellant that no confiscation could have been done and penalty imposed under the provision of Section 173Q of the erstwhile Rules, because Chapter VIIA....
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....erence to Rule 173Q instead of Rule 209. It is the substance which is important and not the form; and when substance is examined it becomes obvious that there has been no prejudice whatsoever to the noticee by a mere erroneous reference to Rule 173Q in place of Rule 209. Reference to rule 173Q was an obvious mistake because of the provisions of rule 173A(2) stating that nothing in this chapter shall apply to a manufacturer or producer who has been allowed to discharge his duty liability in accordance with the provisions contained in Section C-I, E-III, E-VI, or E-IX of Chapter VI, or to whom the provisions of Chapter VA apply. This provision, however, did not exclude the applicability of Rule 209 which obviously applied in cases of breach of rules contained in Chapter V-A. In this view of the matter, the contention that confiscation and penalty should be set aside merely on the ground of the wrong mention of Rule 173Q instead of Rule 209, is misconceived and cannot be accepted. The decision on which reliance was sought to be placed cannot, therefore, assist the appellant case. The applicability of Rule 209 was neither argued nor considered in those cases. We, therefore, do not find....