ORDER
S. Kalyanam, Member (J)
1. This is an application for waiver of pre-deposit of a duty of Rs. 3,57,015.20 and a penalty of Rs. 7,500 levied on the petitioner under the impugned order of the Additional Collector of Central Excise, Cochin, dated 18th August, 1989.
2. Shri Shanmugasundaram, the learned Consultant for the petitioner, submitted that duty has been levied on the petitioner for the period April, 1984 to October, 1987 by invoking the longer period of limitation in terms of the proviso to Section 11A of the Central Excises & Sail Act, 1944. It was urged that the Additional Collector is not “Collector” and, therefore, has no competence or authority or jurisdiction to invoke the longer period of limitation under Section 11A of the Act and issue a show cause notice and the show cause notice being bad in law and without jurisdiction the consequential order of adjudication is also void. The learned Consultant in this context placed reliance on the ruling of the Special Bench, CEGAT, Delhi, in the case of Agrasen Engineering Works v. C.C.E., Madras, reported in 1990 (26) ECR 246 (Cegat SB-B1). The learned Consultant further submitted that the petitioner being a training institution would be entitled to the benefit of Notification 167/71, dated 1-9-1971 and, therefore, the tools and dies manufactured by the petitioner for maintenance of this institution and other sister institution would not be liable to pay duty because there is no commercial activity involved. Even in the course of manufacture of the goods in question the students only get training and there are no separate or other labourers as in a factory. Regarding the financial position, the learned Consultant submitted with reference to the Balance Sheet for the period ending 31st December, 1988 that there is a total loss carried forward to the extent of more than Rs. 6.16 lakhs.
3. Heard Shri Bhatia, the learned Sr.D.R.
4. We prima fade do not find any substance in the plea that the show cause notice issued by the Additional Collector of Central Excise invoking the longer period of limitation in terms of proviso to Section 11A of the Act is either incompetent or without jurisdiction, since an Additional Collector is for the purpose of adjudication “Collector” under the Act and Rules. The ruling of the Special Bench also has no application to the facts of the case, because the Special Bench had dealt with a show cause notice issued by a Deputy Collector invoking the longer period of limitation and not an Additional Collector of Central Excise. We further find from the records that in respect of the petitioner’s sister institution at Tellicherry, Kerala, the issue in respect of applicability of Notification 167/71, cited supra, regarding the duty liability on the manufacture of tools and dies in similar circumstances came up for consideration before the Bench of this Tribunal and the same was disposed of on 10-3-1989 in SB/S/Order No. 47/1989 dealing with similar contentions of the petitioner. The Bench has observed in that case as under :-
“We have gone through the Notification No. 167/71 and as per the notification only goods produced in a technical, educational and research institute during the course of imparting technical training would be exempted and in the present case the finding of the adjudicating authority is that the goods produced have been sold on a commercial basis. We, therefore, prima facie do not find any force in the plea of the learned consultant with reference to the applicability of the notification in question.”
5. We follow the reasoning given in the said order of the Bench and hold that prima facie the petitioner would not be entitled to the benefit of the notification in question in regard to the tools and dies manufactured by them. We have gone through the Balance Sheet of the petitioner for the period ending 31st December, 1988 and we find that the sales turnover of the petitioner is of the order of more than Rs. 7.02 crores. We further find that a sum of more than Rs. 1.28 crores is due to the petitioner from sundry debtors besides cash and bank balance of more than Rs. 28.05 lakhs. This is in addition to loans and advances of the petitioner of more than Rs. 64.38 lakhs. We also find that a sum of Rs. 60 lakhs has been set apart towards depreciation, which is only conceptual. Therefore, we find from the Balance Sheet presented before us that the petitioner’s financial position is comfortable. Therefore, taking into consideration all the relevant facts and circumstances and the financial position of the petitioner, we direct the petitioner to make a pre-deposit of a sum of Rs. 2,00,000/- (Rs. Two lakhs) on or before 26th April, 1990 and report compliance, subject to which pre-deposit of the balance of duty and the entire penalty would stand dispensed with pending appeal. The appeal will be called on 26th April, 1990.