1995 (8) TMI 180 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for duty-free clearances and concessional rate of duty.
2. Inclusion of trade discount, secondary packing, advertisement expenses, and value of aluminium utensils in the total value of clearances.
3. Double counting of the value of electric motors.
4. Justification of seizure and confiscation of goods.
5. Imposition of penalty.

Issue-wise Detailed Analysis:

1. Eligibility for Duty-Free Clearances and Concessional Rate of Duty:
The appellants were alleged to have exceeded the Rs. 20 lakhs limit in 1979-80, thereby disqualifying them from duty-free clearances for 1980-81. The Collector ordered the payment of Central Excise duty for goods removed during 1980-81 and imposed a penalty. The Tribunal examined whether the value of clearances exceeded the threshold, considering deductions for discounts, secondary packing, advertisement expenses, and the value of aluminium utensils.

2. Inclusion of Trade Discount, Secondary Packing, Advertisement Expenses, and Value of Aluminium Utensils:
- Trade Discount: The appellants claimed deductions for trade discounts, but the Collector found no such discounts declared in the price list as required under Rule 173C of the Central Excise Rules, 1944. The Tribunal upheld this finding, citing a lack of evidence that the discounts were known in advance and disclosed in the price list.
- Secondary Packing: The appellants argued for deductions for secondary packing costs. However, the Collector and the Tribunal found no evidence to substantiate that secondary packing was used for upcountry deliveries. Therefore, the claim for deduction was denied.
- Advertisement Expenses: The appellants sought to deduct advertisement expenses from the total value of clearances. The Tribunal did not find sufficient grounds to allow this deduction and upheld the lower authority's decision.
- Value of Aluminium Utensils: The appellants contended that aluminium utensils, manufactured by job workers, should not be included in their total value of clearances. The Tribunal agreed, noting that the supplier of raw materials is not considered the manufacturer unless the manufacturer is a dummy unit of the supplier. Thus, the value of aluminium utensils was excluded from the total value.

3. Double Counting of the Value of Electric Motors:
The appellants argued that the value of electric motors used in electric mixers was counted twice. However, this point was not pressed further by the appellants during the hearing, and the Tribunal upheld the lower authority's decision without further disagreement.

4. Justification of Seizure and Confiscation of Goods:
The Tribunal found that the goods were removed without payment of duty, justifying their seizure and confiscation under Rule 173Q of the Central Excise Rules, 1944. The seizure and confiscation were deemed sustainable in law.

5. Imposition of Penalty:
The Collector imposed a penalty of Rs. 15,000 on the appellants under Rule 173Q read with Rule 9(2) and Rule 52A of the Central Excise Rules, 1944. The Tribunal found the penalty commensurate with the offense and upheld it.

Conclusion:
The Tribunal modified the impugned order to the extent stated above, particularly excluding the value of aluminium utensils from the total value of clearances, and upheld the seizure, confiscation, and penalty imposed by the Collector. The appeal was disposed of accordingly.