2005 (2) TMI 820 - AT - Central Excise

Summary

Issues:
Allegation of incorrect valuation of goods leading to short payment of duty; Non-adoption of Rule 8 of Central Excise Valuation Rules, 2000; Imposition of penalty for intent to evade duty; Appeal against confirmation of duty, interest, and penalties.

Analysis:
The case involved M/s. Jaisingh Wires P. Ltd., a manufacturer of various electrical products, accused of supplying goods to related units without adopting Rule 8 of the Central Excise Valuation Rules, resulting in a differential duty payment of Rs. 2,01,74,987. A Show Cause Notice was issued, alleging intent to evade duty and withholding duty payment for over a year and a half while operating under the self-removal procedure. The Commissioner confirmed the duty demand, interest under Section 11AB of the Central Excise Act, and imposed penalties under Section 11AC of the Act, along with a separate penalty on the Director of the Company under Rule 209A of the Central Excise Rules, 1944.

The Appellants contended that they voluntarily paid the differential duty, informed the authorities promptly, and issued supplementary invoices, claiming it was an oversight without intent to evade duty. Upon hearing both sides, the Tribunal noted that the appellants rectified the payment error independently before the department's intervention, as evidenced by the delayed Show Cause Notice issued ten months post the duty payment. Consequently, while confirming the duty and interest demands, the Tribunal set aside the imposed penalties, ruling in favor of the appellants and disposing of the appeal accordingly.

The judgment, pronounced on 21.2.2005 by the Tribunal, emphasized the significance of rectifying errors promptly, acknowledged the appellants' proactive approach in correcting the duty payment mistake, and highlighted the absence of malicious intent, leading to the decision to waive the penalties despite confirming the duty and interest obligations.