P.K. Desai, Member (J)

1. This appeal is directed against the Order-in-Original No. 48/Demand/89 dated 12-7-1989 passed by the Additional Collector of Central Excise and Customs, Vadodara, raising the demand for Rs. 37,489.10 under the proviso to subsection (1) of Sec. 11A of the Central Excises and Salt Act, 1944 read with Rule 9(2) of the Central Excise Rules, 1944, alleging that the appellants have, during the period from 1-3-1985 to 16-3-1985, availed of the proforma credit of central excise duty on excisable goods under the permission granted to M/s. Polymer Corporation of Gujarat Ltd. under Rule 56A of the Central Excise Rules, which they were not entitled to.

2. Shri N.I. Mehta, the Ld. Advocate for the appellants, advanced the arguments on two counts, firstly, the demand raised is time barred and secondly the declaration made by M/s. Polymer Corporation of Gujarat Ltd. and permission granted thereunder to the said Corporation was, without any further declaration, available to them and that they were, even under the law, authorised to take the proforma credit. Shri Mehta submitted that initially the appellants namely the Gujarat State Fertilizers Co. Ltd. and M/s. Polymer Corporation of Gujarat Ltd. were distinct entities and that the said Gujarat Polymer had made a declaration for proforma credit under Rule 56A and were granted permission vide letter dated 1-1-1981 by the Assistant Collector of Central Excise, Division IV, Baroda, to avail of such credit. In the year 1984, the appellant company moved a Company Petition No. 287/84 and M/s. Polymer Corpn. of Gujarat Ltd. also moved a petition No. 238/84 before the High Court of Gujarat for amalgamation of the Polymer Corpn. with the appellant company and order permitting such amalgamation was passed by the Gujarat High Court on 16-1-1985 and that thereafter, they informed the Jurisdictional Supdt. of the Central Excise vide their letter dated 16-2-1985 about the order passed by the Gujarat High Court permitting amalgamation and praying for transfer of the licences which stood in the name of M/s. Polymer Corpn. of Gujarat Ltd., to the appellants' name. In response thereof some queries were raised which were replied by the appellants vide their letter dated 28-2-1985 and the department vide their letter dated 6-3-1985 transferred those licences in the name of the appellant company. The appellants thereafter wrote a letter to the Collector of Central Excise on 19-3-1985 requesting the Collector to grant permission to transfer the proforma credit under Rule 56A and Notification No. 201/79, lying in the balance in the account of M/s. Polymer Corpn. to the account of the appellant company, which was sanctioned by the Collector vide his letter dated 3-5-1985. Shri Mehta contended that all these letters as well as other correspondences produced on record indicated that the department was fully aware of the amalgamation and transfer of business with all the rights and liabilities of the Polymer Corpn. with the appellant company and as such there was no question of suppression. He admitted that the appellant company did not make a fresh declaration and obtained 3 fresh permission but that was under the assumption that as per the order of the Gujarat High Court, all the assets, rights and liabilities stood transferred by way of merger in the appellant company and hence there was no need to make any fresh declaration. In any case, according to him, the fact of merger, the fact of transfer of proforma credit under Rule 56A and all other relevant facts being known to the department since 1985, it was not open to the department to allege any suppression thereafter and that the same has not been rightly incorporated in the show cause notice dated 7-3-1989. In his submission, the proviso to sub-section (1) of Sec. 11A of the Act could be invoked only if there is a wilful suppression and when there is no suppression, the demand raised covering the period from 1-3-1985 to 16-3-1985 vide