D.N. Lal, Member (T)

1. Originally preferred as a revision application before the Central Government, on transfer to this Tribunal, the matter is being treated as an Appeal. The present. Appeal is directed against the Order No. 1563 dated 2-9-1977 passed by Appellate Collector of Central Excise, New Delhi.

2. Briefly stated, the facts of the case are that the appellants are a private limited company engaged in the manufacture, inter alia, or brake-linings and clutch facings, the two ancillaries falling under item 34A of the C.E.T. At the material time, the appellants were manufacturing some 1,000 to 1,500 different varieties of such products and as the specifications of the products were different to meet different requirements, the prices for the different varieties were also different. Accordingly, in terms of Rule 173-C of the Central Excise Rules, 1944, the appellants had filed before the proper officer regular price lists and RT-12s, which were approved and the appellants cleared the goods as per the declared prices. The goods involved in the present proceedings were manufactured by the appellants in their factory located at Ghaziabad but the sales were initiated from their sales office in Delhi. It is the case of the appellants that they were scrupulously and strictly declaring the invoice prices as per the approval accorded by the proper officer. Nevertheless, in some stray transactions the sale office found it necessary to make some marginal adjustments in the net price either on account of the prevailing market conditions or insistence by the particular buyer. However, where the net price was modified slightly upwards or downwards, in all such cases, so far as the duty of excise is concerned, that was credited and paid with reference to the approved price lists. The present proceedings arose out of issue of show cause notice No. 271 dated 6-3-1973 which was superseded by show cause notice No.287-88 dated 12-3-1973. This notice was superseded by show cause notice No.36-37 dated 28-3-1973 which in turn was superseded by the show cause notice dated 3-10-1973. On the same day, yet another show cause notice was issued in modification of notice issued earlier in the day. This notice dated 3-10-1973 alleges that the appellants had removed excisable goods in contravention of Rule 173-C of the Central Excise Rules, 1944 (hereinafter to be mentioned as the Rules) inasmuch as the trade discount which had been declared in their price list Nos. 1/77 to 58/77 and Nos. 1/72 to 74/72 for the wholesale buyers from April 1972 to January 1973, were not passed on uniformly to all wholesale buyers. It was further alleged that in this way the price-lists referred to above were not factually correct and did not contain correct and true information. The notice further alleged that the intention of the appellants was to evade duty to the tune of Rs. 3,16,099.08. This amount was computed on the basis that no discount was admissible on sales made by the appellants during the period in question. The appellants were further asked why a penalty should not be imposed on them under Rule 173-Q of the Rules and why duty amounting to Rs.3,16,099.08 should not be demanded from them under Rule 10 of the Central Excise Rules. The said show cause notice did not disclose the basis for the allegation that the discount declared by the appellants had not been passed on uniformly to all wholesale buyers. However, the Department had supplied to the appellants in July 1973, i.e. a few months prior to the issue of the notice, a chart marked Chart-A purporting to be a list of cases:

(i) wherein no discount had been allowed;

(ii) where the trade discount had been allowed at rates lower than 37% and

(iii) where discount had been allowed at a rate higher than 37%.

This chart listed particulars of invoices relating to each of the three categories mentioned above issued by the appellants for the period 22-4-72 to 27-7-72. It is pertinent to mention here that simultaneous