ORDER
J.H. Joglekar, Member (T)
1. M/s. Milton Plastics Ltd. (MPL) and M/s. Milton Plastic Industries are sister concerns and related person in terms of Sec. 4 of the Central Excise Act, 1944. M/s. MPI manufactured thermo flasks and discharged the burden of duty on prices at which the goods were sold by M/s. MPI. M/s. MPL effected clearances at their depot gate as well as at the gate of their Clearing and Forwarding Agents. Duty was to be calculated on the price prevailing at different places. The quantum of duty would be higher where the goods were cleared from the premises of C&F Agents. During the search of the office of M/s. MPI a document was found being a memo from M/s MPL to M/s. MPI pointing out that during the period April, 1996 to August, 1997. M/s. MPI had short paid duty of Rs. 12,77,773.82. This authenticity of this document is accepted by both M/s. MPI and M/s. MPL. As to why the differential duty was not paid was explained by the officers of MPI. Show cause notice dated 14.12.99 was issued seeking to recover this amount and also seeking to impose penalties. However, in April, 1999, the differential duty was paid by M/s. MPI. The Additional Commissioner confirmed the duty already paid and directed that the differential amount still not paid of Rs. 44,374 be paid immediately. He also imposed penalty of like amount under Sec. 11AC and of Rs. 1,00,000/- under Rule 173Q(1) of the Central Excise Rules, 1944. Hence, the appeal and the present application for waiver of pre-deposit of the penalties and the balance amount of duty.
2. On behalf of M/s. MPI, it is stated that the direction to pay Rs. 14,374/- is based on the wrong calculation. In certain cases, the price was charged by M/s. MPI lower than what formed the basis for calculation of payment of duty. This point was not agitated later. As regards the penalties (SIC) first submission is where the duty had already deposited, there is no cause for imposition of penalty. he states this on the strength of judgment reported in 1999 (015) ELT 56 and 1999 (107) ELT 80. We have seen the judgement. The judgement are based on wrong appreciation of earlier judgements. Such cases cover the area where the assessee realise and accepts his mistake and makes to repair the damage. Such cases are not relevant in situation like this where the assessee himself points out that there is a short payment and still takes no corrective action. The letter pointing out the short payment was dated 23.1.98. The search was on 23.1.99 ie. nearly after one year and payment of duty was in April, 1999. Even when the assessee knew that the documents were with the department for 3 months, they did not care to do the needful. In such a situation, the benefit of judgements cited does not extend to the present applicants.
3. The other point urged is that the assessments were provisional and therefore, the question of imposition of penalty is not sustainable. The source of this claim is the letter dated 16.2.97 in which the following paragraph occurs.
“Since the final sales price to wholesale distributors or to C&F Agent/Depot varies from the Central Warehouse, we shall be clearing finish product on payment of duty at the declared price for central warehouse and assessment to that extend would be provisional under Rule 9B of CER 1944. We shall furnish the detailed statement of the final sales price, difference in value and differential duty within 60 days drom the end of the month and differential duty shall be accordingly debited.”
4. The Addl. Commissioner in dealing with this claim stated that this cannot be called to be a case of provisional assessment in as much as it does not amount to a request of the provisional assessment.
5. Rule 9(b) lays down the mechanics and the provisions for application of Rule 9B. At this stage, we are not going to the case law.
6. Claim is made that penalty under Sec. 11AC was not imposable. We are not able to appreciate this statement.
7. At this stage, we, therefore, direct the applicant to deposit a sum of Rs. 5 lakhs (Rupees five lakhs) only within eight weeks from today as pre-condition to hearing of their appeal. In the absence of compliance, their appeal shall be dismissed without further notice.
8. Compliance on 23.7.01.
(Dictated in Court)