ORDER
G.N. Srinivasan, Member (J)
1. These are all the appeals and applications for stay filed for stay of collection of duty of Rs. 57,65,155/- (of which Rs. 7.50 lakhs was already paid which has been admitted in the show cause notice) and imposition of penalty under rule 173Q on the assessee. Appeals have also been filed against imposing penalty of Rs. 50 lakhs each on two partners of the assessee and appeals and applications for stay have also been filed against imposition of penalty on two partners of the other firm under rule 209A.
2. The facts of the case are that Navrang Art Printers, the appellant in Appeal No. E/3520/2000 was carrying on the business in the manufacture of printed cartons (4819.19 labels, 4821.00) and other items falling under chapter 48. The other appellants are Paramount Paper Products and Rajdeep & Sons Pvt. Ltd. The partners of the assessee are A.M. Joshi and M.B. Shah. The directors and Rajdeep & Sons Pvt. Ltd. are their respective wives. The charge against the appellant in Appeal E/3520/2000 was inter alia that it had evaded central excise duties by misdeclaring excisable goods as non-excisable; manufacturing and clearing excisable goods on account of two other juristic persons without disclosing this to the department and manufacturing and clearing excisable goods on job work basis without discharging the duties. A show cause notice dated 8.12.1998 was issued charging inter alia that the assessee has failed to comply with the provisions of rules 9, 52A, 226; violations of section 11A and penalty and interest were claimed under section 11AC & 11AB and finally penalties were sought to be imposed on the partners M.B. Shah and A.M. Joshi. In this show cause notice there is no mention of invocation of rule 173Q. The matter was heard by the adjudicating authority and by an addendum dated 3.2.2000 the adjudicating authority sought to invoke the provisions of rule 173Q on the assessee namely the appellant in appeal E/3520. The original show cause notice issued in 1998 did not have paragraph 22(a) which has been included by a show cause notice dated 3.2.2000 issued to all other parties namely Paramount Paper Products and Rajdeep & Sons Pvt. Ltd. The partners of Paramount Paper Products are the wives of the said Joshi and Shah. Mrs. Joshi and Mrs. Shah are also directors of Rajdeep & Sons Pvt. Ltd. As stated above paragraph 22(a) has been inserted in this show cause notice which was absent in show cause notice dated 8.12.1998 whereunder violations of these parties have been mentioned specifically. The impugned order has been passed by the adjudicating authority confirming the duty on the appellant in appeal E/3520 and imposing penalties as mentioned above.
3. Shri M. Chandrashekharan Sr. Counsel with Shri S.P. Sheth, Advocate appeared for the appellants and Shri Chopra, JDR appeared for the department.
4. Shri Chandrashekharan at the outset argued that when the matter was heard by the then adjudicating authority and after hearing the addendum dated 3.2.2000 was issued invoking why penalty could not be imposed on the assessee. This action Shri Chandrashekharan questions. He states that once the adjudicating authority has heard he cannot take benefit of the defence raised by the assessee. He also relies on the judgment of the Tribunal in the case of Espi Industries & Chemicals vs. CCE 2000 (36) RLT 411. He states that once the adjudicating authority comes to a conclusion in respect of the matters in a particular way, it might involve bias on his part in adjudicating the matter. He concedes that at the time when the addendum was issued to the assessee there was no adjudication order passed per se and it was passed by some other person, but yet he strenuously put forth before us that the action of this kind cannot be allowed because penalty itself is dependent upon imposition of duty which could not have been demanded after the lapse of time. He states that this case is a very important one from the point of view of adjudicatory process, issuance of addendum and bias. He mentioned that the effect of the judgment of the Division Bench of the Calcutta High Court in ITC case (1991 (53) ELT 234) has to be gone into and the judgment of the Madras High Court in Asia Tobacco Co. Ltd. vs. UOI 1988 (33) ELT 279. He conceded that even if tax liability has to be determined it will not go beyond Rs. 6 lakhs and the assessee has already paid Rs. 7.5 lakhs which has been admitted in the show cause notice issued in 1998. He therefore pleads complete waiver taking note of the limitation of the point of removal of the goods and issuance of the fresh show cause notice.
5. Shri Chopra, JDR, reiterated the adjudicating order. He mainly emphasizes that before the adjudication the authority can always issue a show cause notice and the principles of natural justice have been fully complied with.
6. We have considered all the aspects of the matter. The appeal has to be decided on the question of appreciation of the single judgment of the Calcutta High Court in Jasoda Jiban Saha (P) Ltd. AIR 1961 Calcutta 195 especially paragraph 9 thereof. It is appended at page 255 of the paper book. We have also to consider the judgments of the Division Bench of the Madras High Court in (33) ELT 279 and the Division Bench of the Calcutta High Court in I.T.C. (53) ELT 234. The assessee has paid Rs. 7.5 lakhs already out of the possible liability of Rs. 6 lakhs. Taking note of the limitation angle we waive the payment of the remainder of duty and penalties and taking into account the question of law and the amounts involved we post this case for out of turn hearing some time in September, 2001. In the meantime there will be complete stay of recovery of amounts demanded in the impugned order during the pendency of the appeals.
(Dictated in Court)