TaxTMI 
TaxTMI 
2005 (10) TMI 153
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....3 Lakhs under Rule 173Q. He also confiscated land, building etc. and allowed it to be redeemed on payment of Rs. 1 lakh. He further imposed penalties on the two partners hence these appeals. 2. Briefly the facts are that appellants surrendered their licence on 16-2-1993, as they did not wish to continue manufacturing goods. The facts that the licence was surrendered by the appellants on that date is not in dispute. One Shri P.D. Desai was working with the appellants as a Manager when the unit was functioning. He resigned from the firm and took up employment with M/s. Oswal Dying and Printing Works who happened to take the appellants mill on lease. M/s. Oswal obtained the Central Excise Registration and started functioning w.e.f. April, 199....
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....itation as they were issued to them only on 3-10-1997 M/s. Oswal in their reply dated 24-11-1994 stated that they commenced production only in April, 1993 after obtaining a fresh registration and that they were not in any way responsible for the alleged evasion that seemed to have taken place when the mills were under the control of M/s. Mukesh Dye Works and since the notice was not given to the persons who were responsible for the alleged evasion they cannot be held responsible for the evasion. (M/s. Oswal took over only in March, 1993) Thus Oswal Industries contended that they cannot be held responsible for the acts of commission and omission done by the predecessors and M/s. Mukesh Dye Works contended that they received the show cause no....
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....y evidence to prove clandestine removal of the goods. It is merely based on the alleged consumption of electricity during the period in question. It was also stated that verification of relevant records pertaining to electricity consumption was also not permitted. 5. The Commissioner in the impugned order confirmed duty of Rs. 23,93,843.87 on the of MMF removed without payment of duty during the period October, 1988 to March, 1993 and imposed penalty of Rs. 23 lakhs on the appellant firm and also imposed penalty of Rs. 2 lakhs each on the two partners. He confiscated the land building etc. and allowed it to be redeemed on payment of a fine of Rs. 1 Lakh. 6. The Commissioner's main contention was that the show cause notice addressed to....
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....ing this the corrigendum to the show cause notice was issued much-much later i.e. towards the end of the year 1998 and this was received by the appellants in January, 1999. This corrigendum has substantially changed the perspective of the notice. For the first time the Department was asking to this corrigendum as to why duty should not be demanded from M/s. Mukesh Dye Works on the goods alleged to have been removed during 1988-93. It should be construed that the corrigendum is the show cause notice demanding duty. This has clearly been issued in the late 1998 which is beyond the period of even extended period of limitation. The poor defence carved out by Commissioner in the impugned order is that the original notice addressed to M/s. Oswal ....
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.... not acceptable because the corrigendum changed the very basis of the show cause notice and made the appellants responsible for the first time for various acts they seemed to have committed in evading duty during the period 1988 to March, 1993. 9. Equally unsustainable is the Commissioner's finding that the department had enough evidence to allege clandestine removal. From the records it is apparent that the quantity of MMF alleged to have been removed without payment of duty was removed on the basis of electricity consumption. While it is true under that Rule 173E of the Central Excise Rules, consumption of electricity is a factor to be taken into consideration it cannot be a sole factor for determining the quantity of fabrics that mo....