Case: Madras Petro-Chem. Limited Vs. Collector of Central Excise, Madras

3. The brief facts are that the notice was issued to the appellant company on 25th June, 1979 by the Superintendent of Central Excise,V Division to show cause why the penalty should not be imposed upon them under Rule 9(2) and the Central Excise Rules, 19444. The notice indicated that the appellant company having sold the transformer oil under invoice Nos. 626 to 629, 630 and 634 for the period from8 to8 for which the gate passes had not been prepared and duty has not been debited in PIA, though it has been raised in the invoices. It further mentioned that the company consumed 131.323 K.L. of white oil in the manufacture of petroleum jelly I.P. grade falling under Tariff Item 68 during the said period, i.e.,8 to8 when there is no exemption of excise duty for such captive use5. A reply was filed by the company to the said notice on, inter alia, stating that the transformer oil referred to in the notice was thet stock and the same could not attract excise duty and that the excise duty element has been inadvertently included in the @invoices as they were raised after lapse of time. They also challenged the classification of the white oil used in the manufacture of petroleum jelly to be falling under Tariff Item No. 8. The other points raised by the appellant company are not necessary for the purpose of disposal of the present appeal, except the question of limitation of the show cause notice as aforesaid. The Assistant Collector, Central Excise, Division IV, Madras, determined the excise duty on transformer oil amounting to o Rs. 1, 01, 915.84 paise and the excise duty on white oil consumed in manufacture of petroleum jelly was assessed as Rs. 57, 708.81 paise6. An appeal was preferred under Section 35 of the Act subsequently transferred to the Tribunal. The Tribunal also dismissed the appeal of the appellant against which the present appeal has been filed.

Court's reasoning:
10. So, we have no hesitation to hold on facts of this case in view of finding recorded by the statutory authorities concurrently, that proviso to Section 11A would be attracted, as it stood at the material time and the demand was, therefore, within time as recorded above. This finding has been recorded consistently by all the authorities below and we do not find any error to interfere with the same14. The proposition of law as laid down is not in dispute. We find in the present case as aforesaid, a clear finding was recorded that the petitioner was aware and was obliged to file RG1 Register. gate basses and also of clearances, in the RT 12 returns by disclosing the particulars which was not done in the present case. The finding recorded in this case, especially in the background that this was a case of self removal procedure in which there is obligation cast on the assessee to make proper and correct declaration and entries in the production register RG1. Further finding was that it was not by inadvertence. There could be no other inference if it was not by inadvertence, then deliberate, then it is not in the realm of inaction of the assessee but with the objective of a gain, which in other words would be conscious withholding of the information Thus unhesitantly we conclude, on the facts of this case, proviso to Section 11 would be applicable, hence, show cause notice is held to be within timeSimilar submission was also made before the Tribunal where the contention was that the said stock of transformer oil of the aforesaid period was oft stock. The submission made before the Tribunal was that the Asstt. Collector could have verified this by examining the time taken to complete a cycle in the conversion of transformer oil stock. However, the Tribunal recorded the finding that once allegation was that stock was nott stock, the burden was on the assessee to prove this fact. This was not done. The Tribunal further recorded that the Assistant Collector personally examined the matter and after discussing with the company official and after the scrutiny of the record gave allowances for a quantity which he held to be fromt stock, and that quantity was excluded from excise duty. Assistant Collector gives details about this and Tribunal recorded these figures were not controverted by the assessee before the Tribunal. No evidence was led to prove this. We find even this submission of learned Counsel for the appellant has been concurrently found against him by all the courts below.