U.L. Bhat, J. (President)
1. Order-in-Original No. 146/D/89, dated 17-3-1989 passed by the Additional Collector of Central Excise, Chandigarh is under challenge in this appeal.
2. Appellant engaged in the manufacture of woollen fabrics, filed price list on 21-2-1974 reducing the price and this was approved the very next day. On 26-2-1974 and 27-2-1974, appellant cleared 22,177.20 metres of woollen fabrics at different gate passes at approved price. The goods were transferred to the sale outlet attached to the factory. Duty on the approved (reduced) price was paid on these clearances. Verification of sale invoices at the sale outlet showed that the entire quantity had been sold to different parties at prices higher than the reduced price. Accordingly, show cause notice dated 12-7-1976 was issued proposing demand of differential duty on the differential price and imposition of penalty. Appellant contended that bulk of the clearances on 26-2-1974 and 27-2-1974 had been sold at the wholesale prices and a small quantity had been sold at higher rates and a substantial quantity had been sold at still lower rates. Sales of small quantity of fabrics at higher rates were retail sales and cannot furnish the basis for the allegation that the goods had been sold in wholesale at higher prices. Appellant also alleged that the show cause notice was barred by time as there was no suppression of facts with intent to evade duty. Originally, the Assistant Collector confirmed the demand. His order was set aside by the Collector (Appeals) on the ground that the facts on record were not taken into consideration. After remand, the Additional Collector took up the matter for adjudication and confirmed the demand, overruling the contentions of the appellant. This order is now challenged.
3. We have been taken through the show cause notice, the annexures thereto and a chart presented by the appellant along with the reply to the show cause notice. The demand relates to woollen fabrics of various qualities. The facts disclosed are as follows :-
______________________________________________________________________ Quality No. Total quantity in metre Quantity in metres sold at sold at approved price higher price _______________________________________________________________________ 1106 2163.80 63.60 1108 494.55 15.50 1140 1900.20 84.80 1205 258.40 20.10 1211 729.60 21.70 1214 785.70 12.20 1219 712.40 29.80 1233 2038.65 185.30 1245 1013.20 10.60 1230 2796.60 16.00 1120 1325.70 35.70 1258 772.15 31.70 1206 2434.25 35.60 1078 575.20 50.50 1102 2668.70 218.20 1177 626.10 163.80 1200 47.40 47.40 1242 713.10 53.60 24.90 68.10 _______________________________________________________________________
In regard to quality Nos. 1140,1211,1258,1206,1078 and 1102, a small quantity had been sold at prices less than the approved price.
4. The above chart will show that the contention of the learned Counsel for the appellant that the sale outlet at the godown attends to sales in wholesale as well as in retail is correct. It is seen that bulk of the sales are of large quantities in wholesale at the approved price and a small quantity is sold in retail at prices higher than the approved price. A small quantity is also sold at prices less than the approved price. This will show that higher rates were collected only in respect of retail sales. It cannot, therefore, be held that there were sales in wholesale at rates higher than the approved rates. In this view, we find it unnecessary to consider the question of limitation.
5. For the reasons indicated above, we set aside the impugned order and allow the appeal.