G.P. Agarwal, Member (J)

1. This appeal is directed against the Order-in-Original No. 9/1-D/82, dated 28-5-1982 passed by Shri G. Sarangi, Additional Collector of Customs and Central Excise, Indore.

2. The facts leading to this appeal lie in a narrow compass. The appellant firm, M/s. Indore Bottling Company, manufactures aerated waters falling under Item I-D of the Central Excise Tariff. By virtue of Notification No. 80/80, dated 19-6-1980, as amended from time to time, the appellant firm was availing the exemption from Central Excise duty on first clearance of the specified goods upto an aggregate value of Rs. 7.5 lakhs in a financial year and in excess thereof was liable to duty. During the checking of accounts of production and clearance, it was observed by the Central Excise officers that the appellant firm had cleared aerated waters valued at Rs. 7,47,773.16 under Gate Pass No. 220 dated 1-4-1981 to Gate Pass No. 472 dated 19-5-1981. On 19-5-1981, the appellant firm cleared the goods valued at Rs. 5,038.16 and continued to clear the goods valued Rs. 32,951.64 under Gate Pass No. 474 dated 19-5-1981 to Gate Pass No. 483 dated 20-5-1981, thereby clearing the goods valued Rs. 35,959.80 in excess of the exemption limit without payment of Central Excise duty. Consequently, a show-cause notice dated 7-1-1982 was issued 1o the appellant firm asking them to show cause why a personal penalty should not be imposed on them under Rule 173Q of the Central Excise Rules, 1944, and also why the duty of Rs. 11,106.54 should not be recovered under Rule 9(2) of the Central Excise Rules, 1944, from them, alleging contravention of Rules 9(1), 173F and 173G of the Central Excise Rules, 1944, inasmuch as the appellant firm cleared the goods in excess of the exemption limit without payment of duty on 19th May, 1981 and 20th May, 1981.

3. It is significant that before the issuance of the said show-cause notice, the appellant firm vide their letter dated 3-6-1981 addressed to the Superintendent, Central Excise MOR-IV, Indore, admitted the removal of goods without payment of duty on 19-5-1981 and 20-5-1981, but further added that the said removal of goods without payment of duty was effected for the following reasons :

(i) The concerned person looking after the Central Excise work was sick from 11-5-1981 to 22-5-1981;

(ii) This mistake, that is to say, removal of goods without payment of duty was effected due to totalling mistake of clearance value of the goods after 1-5-1981; and

(iii) Being the peak season of their product, the other persons were also busy in other factory work.

4. On receipt of the show-cause notice, the appellant firm instead of filing a detailed reply to the said show-cause notice, addressed a letter dated 13-1-1982 to the Assistant Collector reiterating the stand which was already taken by them in their aforesaid letter dated 3-6-1981. The appellant firm was again asked to file a reply to the show-cause notice making it clear that if no reply is received within the given time, their letter dated 13-1-1982 addressed to the Assistant Collector would be deemed to be the reply to the show-cause notice. The appellant firm was further reminded on 5-3-1982, but no reply was received from them. Hence, the learned Additional Collector decided the case on the basis of evidence available on records and found that the appellant firm removed the goods in excess of the limit without payment of duty on 19-5-1981 and 20-5-1981. He further found that the stand taken by the appellant firm in their said letter dated 3-6-1981 addressed to the Superintendent, Central Excise, Indore, which was treated as the reply to the show-cause notice, was not tenable in view of the facts and circumstances of the case.

5. From the records, it is clear that the excisable goods in excess of the exemption limit were removed on 19-5-1981 and 20-5-1981 without payment of duty. During the course of arguments, Shri V. Sridharan, CA, also admitted, and rightly so, that t