ORDER
S.L. Peeran, Member (J)
1. This appeal arises from order-in-original, dated 21-5-1992, passed by the Collector of Central Excise New Delhi, confirming duty amount of Rs. 10,08,020.05 as Central Excise duty for clearance made in respect of Carbon Paper Rolls falling under sub-heading No. 4809.10 of the Central Excise Tariff Act, 1985 for the period 1989-90 and 1990-91 under the provisions of Section 11A(1) proviso of the Central Excises and Salt Act, 1944. They have been imposed penalty of Rs. 25,000/ under Rule 173Q.
2. The facts of the case are that the appellants were clearing the said goods manufactured by them without payment of duty thereon. The officers of Central Excise (Preventive) visited the factory premises on 25-2-1991 and found them manufacturing and clearing the said goods under the said sub-heading after availing of the benefit of Notification No. 175/86-C.E., dated 1-3-1986 as amended. The statement of the partner of the firm was recorded and the statutory records were scrutinised by the Officers which revealed that the provisional SSI registration certificate No. 55/55/60 4/STH, dated 8-11-1989 had expired on 7-11-1990. The said SSI certificate had not been converted into a permanent one. They had started production/clearance of goods with effect from 9-2-1990 and the total value of the goods manufactured and cleared by the party during the financial year 1989-90 was Rs. 3,76,761/ and for the year 1990-91 it was Rs. 19,99,477.10. Shri Ram Kumar Aggarwal, partner of the firm in his statement dated 25-2-1991, inter alia, is alleged to have admitted that from 7-11-1990 till the date of visit i.e. 25-2-1991, the party (or its unit) were not registered as an SSI unit even provisionally and also confirmed the figure of clearance for the said years. Therefore, the department issued a show cause notice demanding the duty and also calling upon them to explain as to why penalty should not be imposed under relevant [Rule] of Central Excise Rules, 1944, on the allegation that they had misstated the facts of obtaining SSI registration certificate and having availed of the benefit of the Notification in question.
3. The appellants filed their reply dated 14-1-1992, wherein they stated that they were engaged in the manufacture of two products namely, Carbon Paper Rolls and Printing Ink respectively falling under Tariff sub-headings 4809.10 and 3215.00 of the Central Excise Tariff Act, 1985. They had stated that the products were excisable items but, however, they were covered under Notification No, 175/86 and that they had operated under the said Notification during the financial year 1989-90, on the strength of a provisional SSI certificate which was valid upto 7-11-1986. Hence, they had pleaded that they were fully eligible for exemption under the said Notification. They had stated that the Notification provides for exemption, if the manufacturer had been availing of the benefit of the Notification during the preceding financial year. They had availed of the benefit during the year 1989-90 against the provisional registration certificate. Therefore, they were also eligible for exemption during the year 1990-91.
4. The Learned Collector rejected their submissions and confirmed the duty. The Learned Collector has held that the provisional certificate had become invalid on 7-11-1991, since it was not renewed by the concerned authority. The party had been intimated about this fact by the department, yet they had continued to avail of the SSI benefit when it was no longer a registered SSI unit. Therefore, he has held that there has been violation of para 4 of the said Notification before they were liable to pay the duty. He has also held that the provisional registration is for the purpose of availing of the exemption in the said Notification and it is only a permanent registration certificate which would be valid one for the purpose of the said Notification. He has also rejected the plea for grant of exemption for clearance in the preceding year or current financial year below Rs. 7.5 lakhs as provided under clause (b) of the Proviso to para 4 of the Notification on the ground that they had not registered as SSI unit. In that view of the matter, he has upheld the allegation for extending the larger period made out in the show cause notice on the ground of misstatement as provided in proviso to Sub-section (1) of Section 11A of the Act.
5. We have heard Shri J.S. Agarwal, the Learned Advocate for the appellant and Shri Mewa Singh, the Learned DR for the Revenue.
6. The Learned Advocate submitted that between 1989-90, the clearances were less than Rs. 7.5. lakhs and for this period there was no requirement of a registration as an SSI unit or licence to be obtained under the Act. Therefore, he submitted that as a consequence the next year also, they would be entitled for the benefit without registration. He submitted that the department had initiated proceedings by issue of show cause notice dated 31-5-1991 invoking the proviso to Section 11A for the period 1-3-1991 to 30-4-1991 on the allegation of wrong availment of exemption under Notification No. 175/86, dated 1-3-1986 as amended and the same had been adjudicated also by order-in-original No. 270/91, dated 3-3-1991. The Assistant Collector noting the clearances for the year 1989-90 being less than Rs. 7.5 lakhs and also noting that the same was below the limit, had held that for the subsequent year 1990-91 also, they were entitled for the benefit. Therefore, the Assistant Collector had dropped the proceedings. He further submitted that the department had again initiated another proceeding against them on the same allegation, for the same period which ultimately resulted in the passing of the order-in-original No. 206/91, dated 27-3-1991 by the Assistant Collector of Central Excise. They filed an appeal before the Collector of Central Excise (Appeals), Delhi. The Collector (Appeals) by his Order-in-Appeal No. 62-C.E./DLH/92, dated 29-1-1992 took into consideration earlier order of order-in-original No. 270/91 dropping the proceedings and in that view of the matter, he set aside the Assistant Collector’s orders as being not justified in law and the same was annulled and he further ordered that the benefit of Notification No. 175/86, dated 1-3-1986 be allowed to the appellants during the period in dispute, if otherwise found due and admissible, subject to fulfilment of other relevant conditions of the Notifications. The Learned Advocate submitted that the appellants had been harassed by the department by commencing proceeding for the third time and the department had suppressed and had not disclosed the earlier two proceedings in their show cause notice and it is the department who are guilty of suppression. He submitted that the department was unnecessarily harassing the assessee by commencing proceedings after proceedings even after final adjudication order had been finalised before the Assistant Collector and Collector (Appeals) having been finalised in the party’s favour. He also relied on the following judgments:
1. Accura Industries v. Collector of Central Excise, [1992 (58) E.L.T. 98 (Tri.)]
2. Prabhu Soap Works v. Collector of Central Excise, [1992 (19) ETR 814]
3. Industrial Tapes and Fabrics Pvt. Ltd. v. Collector of Central Excise, [1990 (49) E.L.T. 564]
7. The Learned Counsel also relied on the Board’s instruction in Trade Notice No. 26/87, dated 28-4-1987 as reported in 1987 (11) ECR 83C.
8. The Learned DR reiterated the findings of the learned Collector.
9. We have carefully considered the submissions made by the appellants and on verification of records, the submissions are totally correct. We have perused the order-in-original No. 270/91 passed by the Assistant Collector dropping the proceedings initiated by show cause notice dated 31-5-1991 on the same facts and allegations. The department had again initiated another proceedings on the same facts and circumstances which came to be confirmed by order-in-original No. 206/91, dated 27-3-1991. On appeal, the Learned Collector set aside the order holding that the action of Assistant Collector is not justified in law. Therefore, he annulled the said order and ordered for grant of Notification for the period for desired, if otherwise found due and admissible, subject to fulfilment of other relevant conditions of the notification.
10. We notice that the department without even verifying these facts have again initiated these proceedings causing undue hardship and harassment to the party. The appellants in their reply to the show cause notice had clearly brought to the notice of the Collector about these facts. Unfortunately, the Collector has failed to notice and record these submissions in his order, thereby clearly disclosing the Collector’s unfairness in the matter and about his total non-application of mind, resulting in failure of justice. This is a very clear case of total harassment and initiating proceedings after proceedings on the same issue for the same period on three occasions without any rhyme and reason. We have to record our displeasure in the manner in which the department has dealt with the matter. This is a matter, which we feel should be brought to the notice of the higher authority of the department namely, the Chairman of the Board of Central Excise, so as to enable the Chairman to take some remedial action to avoid such type of harassment to the assessee in a circumstance like this, wherein the department initiates a third proceeding when in fact, two earlier proceedings had been dropped. The Collector has failed to look into this aspect despite this fact being brought to his notice both in the reply to the show cause notice as well as during the personal hearing, instead he has gone on to confirm the demands, which are totally unsustainable. As the matter has already been adjudicated earlier and the department has dropped the proceedings twice, the question of sustaining this order does not arise. Therefore, the impugned order does not survive and it is set aside.
11. The learned Advocate is justified in submitting that there is no question of invoking larger period in this case in view of the earlier proceedings on the same allegations having been dropped by the Assistant Collector and in the second round by the Collector (Appeals). Therefore, the demands are also barred by time, as the department was aware of the previous proceedings initiated against the assessee and, therefore, these proceedings initiated for the third time on the same cause of action will be barred by time. Therefore, the impugned order is set aside and the appeal is allowed. The Registry to mark a copy of this order to the Chairman of the Board.