2004 (6) TMI 439 - AT - Central Excise

Dutiability - Aluminium circles - Captive consumption - Demand - Limitation - Suppression of facts

Summary

Issues:
1. Classification of Aluminium Circles as excisable goods.
2. Liability for payment of Central Excise duty.
3. Imposition of penalty and interest.

Classification of Aluminium Circles as excisable goods:
The appeal was filed against the Order-in-Appeal that classified Aluminium Circles as excisable goods not covered for exemption under Notification No. 67/95. The Commissioner (Appeals) upheld the demand of duty and imposed a penalty for suppressing the fact of manufacturing Aluminium Circles. The appellant argued that due to a misconception about tariff clarification, they did not pay duty on the circles. The Tribunal referred to a previous judgment where it was held that Aluminium Circles used in manufacturing utensils are excisable goods. Consequently, the duty amount was confirmed.

Liability for payment of Central Excise duty:
The appellant company had not paid Central Excise duty on Aluminium Circles since 1996, and the Revenue issued a demand-cum-show cause notice for the same. The company did not maintain separate records for the circles and had not informed the department about their production. The partners admitted to not paying duty, not maintaining records, and not filing necessary declarations. The adjudicating authority confirmed the duty demand, imposed a penalty, and required payment of interest under Section 11AB of the Central Excise Act. The appellant paid the duty in instalments but did not pay the penalty amount.

Imposition of penalty and interest:
The Tribunal found that the appellants had not obtained a Central Excise License for manufacturing Aluminium Circles and had suppressed material facts by not maintaining statutory records. Consequently, demands of duty within the extended period were deemed valid. The appellants were held liable to pay interest under Section 11AB. The penalty amount was reduced to Rs. 50,000 from the original sum, considering the circumstances. The Order-in-Appeal was modified to reflect the reduced penalty amount, acknowledging the failure to comply with statutory obligations but mitigating the penalty imposed.