ORDER
S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Central Excise, Calcutta-ll dated 16.10.1985 imposing a duty of Rs. 32,44,767.04 and a penalty of Rs. 25 lakhs on the appellant.
2. The appellants manufacture metal containers (falling under Item 46 of the Central Excise Tariff) from the steel supplied by the Indian Oil Corporation. Proceedings were instituted against them by issue of a show cause notice dated 4th February, 1985 on an allegation that between May 1979 and August 1984 they manufactured and cleared metal containers by deliberately not declaring the value of metal containers, by not taking into consideration the correct cost of metal sheets used in the manufacture of such metal containers and by wilfully suppressing the documents and relevant particulars for arriving at normal prices and also wilful misstatement of facts, which eventually culminated in the present impugned order now appealed against.
3. Shri Laxmi Kumaran, the learned Counsel for the appellants, at the outset, submitted that the basis of the show cause notice was for undervaluation while the impugned order now appealed against levied duty and penalty is on the ground that the appellant was guilty of clandestine removal of excisable goods, which was not one of the grievan ces of the Department, in show cause notice. The learned Counsel further submitted that admittedly all along the price lists were provisionally submitted by the appellant and by a communication dated 31.12.85, an order was passed by the Supdt. Central Excise, Calcutta II Range finalising the RT 12 returns of the appellants in respect of the goods in question for the period 1981 to June 1983. It was further submitted that RT 12 assessment for the earlier period also was finalised by the authorities and the appellant had paid the differential duty. The learned Counsel, therefore, submitted that when the RT 12 assessments have been finalised upto June 1983, as evidenced from the communication dated 31.12.1985 and when subsequent RT 12 assessments were earlier finalised, the very issue of the show cause notice on 4.2.1985 is totally without any legal basis and is also premature. The learned Counsel submitted that this fact was particularly brought to the notice of the adjudicating authority and has also been recorded in para 6 of the impugned order. The learned Counsel, therefore, finally submitted that the very impugned order is not legally tenable and the imposition of penalty is totally without jurisdiction in the above circumstances.
4. Shri Jain, the learned departmental representative submitted that his records also reveal that RT 12 assessments have been finalised till July, 1981 and the appellant had paid the differential duty. The learned D.R. on further scrutiny of the communication of the Supdt. dated 31.12.1985 evidencing finalisation of RT 12 assessment of the appellant till June, 1983 accepted and conceded the same. The learned D.R. urged that inas-much as the impugned order has been passed pursuant to the show cause notice dated 4.2.1985 when the very assessments upto June 1983 were only in a provisional stage, the order may be set aside keeping the rights of the department intact leaving it open to the department to take such action against the appellant as deemed fit necessary under law, if the appellant is found of clearing the goods clandestinely.
5. We have carefully considered the submissions before us. In our view, without pronouncing upon the merits of the issue, the appeal can be disposed of on a short point of law. We find from the records that the duty has been levied for the period May 1979 to August 1984. it is not disputed before us that the price lists had been filed on a provisional basis and RT 12 assessments were finalised upto June 1983, a communication of the Supdt. dated 31.12.1985. This fact is also not disputed by the department. (Therefore, it would be seen that a major portion of the period is already covered by the finalisation of the RT 12 by the authorities). During finalisation of the RT 12 assessment, if any amount was found due to the department, the department it was open to it to call upon the appellant for making good the same and a question of imposition of penalty would hardly arise in such a situation. We would also like to note that while the RT 12 assessment was itself made on 31.12.1985 show cause notice was issued even prior to that on 4.2.1985. We are at a loss to understand how a show cause notice could be issued under law even before the finalisation of the assessment on the RT 12. To a specific query in this regard, the learned D.R. could not give us any satisfactory explanation. The learned Counsel for the appellant also submitted that even the levy of Rs. 32,44,767.04 under the impugned order is mainly on the basis that the reconciliation statement submitted by the appellant, had not been signed by an authorised officer. The plea of the learned Counsel in this context was that no officer need be specially authorised and the statements were in fact signed by Materials Officer and the adjudicating authority has not held even in the impugned order that the reconciliation statement is not either acceptable or genuine. We are inclined to think that in any event it would have been open to the adjudicating authority to verify the genuineness of the document and the entries therein while considering the issues by making a reference to the I.O.C. if necessary, which unfortunately does not appear to have been done. Be that as it may, for the reasons stated above, the present impugned order, is not legally sustainable and the same is accordingly set aside and the appeal allowed.
6. Before parting, we would like to make it clear that it is open to the department to initiate such action against the appellant as deemed fit and proper in accordance with law in respect of the alleged under-valuation and clandestine removal and it is equally open to the appellant to place the relevant documents in support of their plea that no duty is leviable.
7. The appellants will be entitled to the consequential relief of the order. Announced in open Court on 8.8.1988.