1. The facts of this case are briefly as follows. The appellants switched over to the simplified procedure under Chapter VII-B of the Central Excise Rules, 1944 with effect from 1-3-76 for paying Central excise duty on the goods manufactured by them. One of the conditions of this simplified procedure was that they should have to pay the duty on their closing stocks as on 29-2-76 within 14 days from 1-3-76 and at the rate in force on 29-2-76. Thus, the last date available to the appellants for clearing their pre-simplified procedure stocks was 14-3-76. However, they did not comply with this condition and instead addressed a letter to the Superintendent of Central Excise in the following terms :- "We are unable to remove and pay duty of the goods lying with us as on 29th Feb. '76. There is no buyer in the market.
"Hence it is requested that the goods will be removed and duty paid as and when there will be buyer in the market." In accordance with their above request, they went on clearing the pre-simplified procedure stocks piece-meal. Even after two years, they still had some stock left uncleared on 31-3-1978. With effect from 1-4-78, the exemption scheme for small-scale industry under notification No. 71/78-CE came into force which permitted an eligible manufacturer to clear goods worth rupees five lakhs free of excise duty. The dispute in the present appeal relates to the point whether the appellants were entitled to remove their uncleared stock as on 31-3-78 (out of the pre-simplified procedure stock) free of duty under notification No. 71/78-CE.2. During the hearing before us today, the appellants stated that the Appellate Collector had not granted them a personal hearing before deciding their appeal and thus there was violation of the principles of natural justice. On a query from the Bench, however, they admitted that they had not asked for a personal hearing before the Appellate Collector. They also stated that the Appellate Collector had not considered their plea of time bar under Rule 10 and hence his order was a non-speaking order. When asked by the Bench to state whether they wanted a remand of their case on this ground, they stated that they did not want to press for these points and that they desired this Tribunal to decide their case on merits. Coming to the merits of their case, the appellants stated that in terms of the condition of the simplified procedure, the duty on closing stocks as on 29-2-76 became payable by them on 15-3-76, that the show cause notice or demand ought to have been issued on that day or within one year thereafter which was the time limit allowed under Rule 10 and that the demand issued on 23-8-78 (received by them on 15-9-78) was time barred. They added that notification No. 71/78-CE had been issued for the benefit of the small-scale industry, that this notification did not discriminate between closing stocks and new stocks and that the benefit of this notification could not, therefore, be denied to them. Finally, they stated that the demand confirmed against them for Rs. 2031.66 was excessive as according to their calculation, the amount came to Rs. 1941.86, i.e., there was a difference of Rs. 89.80 because for error of calculation.
3. The Department's representative stated that the appellants had not raised the plea of limitation before the Asstt. Collector, that they were bound by the condition of Rule 173-RG as regards the payment of duty on the pre-simplified procedure stocks, that Rule 10 was not attracted in the facts of this case, that the applicability of Rule 9-A had been specifically excluded by Rule 173-RG, that the second Proviso to Notification No. 14/76-CE laid down that a manufacturer working under the simplified procedure would not be entitled to any other exemption granted under Rule 8 and that the alleged calculation mistake was neither pointed out to the Asstt. Collector nor in specific terms to the Appellate Collector.
4. We have carefully considered the matter. Rule 173-RG (which was a part of the simplified procedure) required that the duty due on the excisable goods in stock at the factory of the assessee on the last day of the month preceding the month from which he began discharging his duty liability in the manner provided for in Rule 173-RD (i.e. the simplified procedure) shall, notwithstanding anything contained in Rule 9-A, be paid at the rate in force on that day within 14 days of the commencement of the month from which the assesses; began discharging duty liability under Rule 173-RD. Any assessee opting for the simplified procedure was bound to observe the condition of Rule 173-RG.The appellants opted for the simplified procedure with full knowledge of this, condition. The duty liability on the pre-simplified procedure stock arose expressly in terms of the provisions of Rule 173-RG and not in terms of Rules 9, 9-A, 10 or 10-A. In view of this express provision of Rule 173-RG, it was unnecessary to raise any formal demand or issue a formal show cause notice for enforcing this liability. When the appellants addressed their letter dated 15-3-76,, they acknowledged their liability but only requested for the Department's indulgence for being allowed to discharge their liability in piece-meal. If the; Department acquiesced into their request, it does not mean that the appellants' liability under Rule 173-RG was erased. It could only mean that the Department agreed to the amount being paid in convenient instalments. This was only an administrative arrangement.
That the Department's indulgence towards the appellants went rather too-far, does not absolve the appellants from having to discharge their liability under Rule 173-RG. The belated demand made by the Department was, in the scheme of the simplified procedure, nothing more than a reminder to the appellants to pay the outstanding dues. Rule 173-RG was a self-contained rule so. far as duty liability on the pre-simplified procedure stocks was concerned and Rule 10 did not apply. There was, therefore, no question of any time limit for issue of show cause notice for enforcing that liability. Exemption notification No. 71/78-CE issued under Rule 8 also could not erase the specific liability in respect of pre-simplified procedure stocks expressly created by Rule 173-RG. As regards the small difference in duty amount of less than Rs. 90/- the Department is correct in saying that the appellants did not point out any calculation error to the Asstt. Collector nor in specific terms to the Appellate Collector. Considering the nature of this virtually fresh argument which would take us to the valuation of the stocks, altogether a new point of dispute, we are unable to go into it at this stage. We thus find no force in any of the arguments put forth by the appellants and accordingly reject their appeal.