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Case Laws
Showing 221 to 240 of 525 Records
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2002 (8) TMI 561
The appeal was against an order from the learned single judge dated January 9, 1995. The appellant, NTPC Ltd., was not held responsible for payment to PGCI. The appellant's plea to be deleted from the array of parties was declined. The appeal was dismissed.
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2002 (8) TMI 549
The applicants filed an application for condonation of delay of 146 days in filing an appeal before the Tribunal. The Commissioner's rejection of their request for further modification resulted in the delay. The Tribunal rejected the condonation application and dismissed the appeal as barred by time.
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2002 (8) TMI 548
Issues:
1. Recovery proceedings without order from Development Commissioner.
2. Scope of show cause notice vs. confirmed duty and penalty under different sections.
Analysis:
1. The appellants, a 100% export-oriented unit, imported goods duty-free but failed to meet export obligations. The Commissioner confirmed duty demand and imposed penalties without an order from the Development Commissioner. The Counsel argued that recovery proceedings were invalid without such an order, citing relevant circulars and legal precedents. The Tribunal agreed, stating that recovery can only proceed after the Development Commissioner's order, as per circular No. 29/95. Letters from the Assistant Development Commissioner did not suffice. The impugned order was set aside on this ground.
2. The Counsel also contended that the Commissioner exceeded the show cause notice's scope by confirming duty under a different section than proposed. The Commissioner imposed penalties under a section not mentioned in the notice, leading to an inconsistency. The Tribunal held that the Commissioner could not go beyond the notice's scope and should have corrected any errors before confirming duty and penalties. The impugned order was set aside on this basis as well.
In conclusion, the Tribunal set aside the Commissioner's order and remanded the matter for a fresh decision in line with the observations made. The appeal of the appellants was allowed by way of remand, emphasizing the necessity for compliance with procedural requirements and consistency between show cause notices and final orders.
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2002 (8) TMI 547
The Appellate Tribunal CEGAT, Chennai granted waiver of pre-deposit and remanded the case back to the original authority for re-consideration as the appellant's pleas were not addressed properly in the Order-in-Original. The appeal was allowed by remand.
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2002 (8) TMI 546
The Appellate Tribunal CEGAT, Mumbai ruled on a case involving M/s. Oil and Natural Gas Commission regarding a less charge demand of Rs. 4,17,950.75 for imported goods. The demand was confirmed against M/s. ONGC, and the appeal by their contractors was dismissed as not maintainable due to lack of locus standi.
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2002 (8) TMI 544
The Appellate Tribunal CEGAT, Mumbai ruled on a case involving waiver of duty on glass scrap from broken bottles during beverage manufacturing. The Tribunal found it difficult to accept the argument that the scrap was not liable to duty, stating that any emerging commodity in manufacturing is subject to duty. The applicant was directed to deposit the full duty amount within a month of the order. Compliance was required by 23-9-2002.
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2002 (8) TMI 543
Issues:
Appeal against disallowance of Modvat credit for capital goods received prior to declaration.
Analysis:
The appellant contested the disallowance of Modvat credit by the Commissioner (Appeals) for capital goods received before filing the declaration. The appellant argued that the goods were received during factory construction and registration application, with the declaration filed even before registration. Citing precedents like Seven Hills Papers and Superior Air Products cases, the appellant claimed entitlement to Modvat credit. Revenue contended that Rule 57T of Central Excise Rules mandates availing benefits only for goods received within 3 months prior to declaration. The Tribunal noted the appellant's factory under construction, registration application on 31-7-95, and declaration filing on 26-6-95. Referring to the Seven Hills Papers case, the Tribunal emphasized the importance of capital goods entering production for credit allowance, clarifying the ambiguity around declaration submission during factory establishment.
The Tribunal's decision in the Superior Air Products case highlighted counting the 3-month period from factory registration for Rule 57T compliance. Consistent with previous rulings in cases like Supreme Wood Products and Paharpur Plastics Ltd., the Tribunal reiterated the significance of capital goods entering production for Modvat credit eligibility. In this instance, the appellant filed the declaration before factory registration, aligning with Tribunal precedents. Considering the 6-month period from registration, the Tribunal overturned the disallowance, granting the appellant Modvat credit for the capital goods in question. Consequently, the impugned order was set aside, and the appeal was allowed.
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2002 (8) TMI 542
Issues Involved:
1. Whether the activity of cutting jumbo reels into reams amounts to manufacture.
2. Whether the Department can demand differential duty on an activity not amounting to manufacture carried out by third-party converters outside the factory.
3. Whether the Department can invoke the larger period of limitation under Section 11A.
4. Whether duty can be demanded on activities carried out outside the jurisdiction of the Commissioner of Central Excise, Vishakapamam.
5. Whether Section 11D was violated under the facts and circumstances.
Issue-wise Detailed Analysis:
1. Manufacturing Activity:
The appellants argued that the conversion of paper reels into reams does not amount to manufacture. They cited several case laws, including CCE v. Popular Cotton Covering Works and CCE v. Bloom Products India Pvt. Ltd., which supported the view that such conversion does not constitute a manufacturing activity. The Tribunal agreed, stating, "No manufacturing activity exigible could be considered as to take place when jumbo rolls are slit."
2. Differential Duty on Non-Manufacturing Activity:
The appellants contended that duty should be paid on the goods in the form they leave the factory, and the cost of conversion outside the factory should not be included in the assessable value. They relied on case laws such as Century Pulp & Paper v. CCE, Meerut, which emphasized that the assessable value should be determined based on the goods as they are removed from the factory. The Tribunal found that the cost of slitting reel form into ream form cannot be added to the assessable value even if the depot premises are considered 'not outside' the factory.
3. Larger Period of Limitation:
The appellants argued that the larger period of limitation under Section 11A could not be invoked as the Department was aware of the slitting activity since 1991. They provided evidence of correspondence and permissions granted by the Department. The Tribunal noted that while the Department was aware of the slitting activity, there was a "conspicuous silence as regards the collection of amounts over and above the value at which duty was paid at the factory gate," which justified the invocation of the larger period in one notice.
4. Duty on Activities Outside Jurisdiction:
The appellants argued that duty cannot be demanded on activities carried out outside the jurisdiction of the Commissioner of Central Excise, Vishakapamam. The Tribunal found that the demand was not on activities but on the additional value realized, and therefore, this issue did not hold.
5. Violation of Section 11D:
The Tribunal did not find any specific arguments or evidence regarding the violation of Section 11D and left this issue open for de novo proceedings.
Conclusion:
The Tribunal concluded that the cost of slitting activity could not be added to the assessable value. They remanded the matter back for re-determining the values with specific instructions:
- For the period prior to the amendment, prices of similar goods sold to other buyers at the factory gate should be applied for reels removed for slitting at depots.
- For the period subsequent to the amendment, and when comparable prices are not available, valuation should be done by applying Rule 6b(ii) of the Valuation Rules.
The Tribunal left the question of limitation and the imposition of penalties open for both sides in the de novo proceedings. The appeals were disposed of in these terms for de novo adjudication.
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2002 (8) TMI 541
The Appellate Tribunal CEGAT, Mumbai ruled in favor of the appellant in a case involving duty on imported goods transferred to another party. The Commissioner's decision was overturned as it was found that the importer was not the appellant but International Dyestuff Industries. The Tribunal emphasized that duty should be paid by the actual importer, not the license holder. The appeal was allowed and the original order was set aside.
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2002 (8) TMI 539
The case involved the appellants importing hospital equipment duty-free under a notification. They were later issued a notice to pay duty, which they did not challenge. The appeal against the subsequent notice to pay duty was rejected as the original duty demand had become final. The appeal filed by the appellants was rejected by the Appellate Authority.
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2002 (8) TMI 536
The Appellate Tribunal CEGAT, Kolkata directed the appellant to deposit duty amount of Rs. 36,000 within six weeks. Despite a miscellaneous application for modification, the Tribunal dismissed it and granted one more month for compliance. Compliance to be reported on 24-9-2002.
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2002 (8) TMI 535
Issues: Denial of Modvat credit on Gas Pressure Spring and Loaded Source P.M.-147 by Deputy Commissioner; Rejection of appeal by Commissioner (Appeals); Eligibility of Modvat credit under Rule 57Q for the items in question.
Analysis:
1. The Deputy Commissioner of Central Excise denied the appellants Modvat credit on Gas Pressure Spring and Loaded Source P.M.-147, categorizing them as capital goods under Rule 57Q of Central Excise Rules, 1944. He argued that Flat Springs are parts of dies, making them ineligible for credit as per the specified Table. Additionally, he deemed the Loaded Source as an inorganic chemical, not qualifying as a spare, component, or accessory for Modvat credit under Rule 57Q.
2. The Commissioner (Appeals) upheld the original order, leading to the current appeal. The appellant argued that the Flat Spring, being part of the die used in the manufacturing process, should be eligible for Modvat credit under Rule 57Q. However, the judge found no merit in this argument, emphasizing that only parts, components, and spares of specific items listed in the Table are eligible for credit.
3. Regarding the Loaded Source, the appellant contended that it is an integral part of the Nucleometer used for measuring film thickness, falling under a different tariff heading than classified by the authorities. The judge highlighted the need to consider the nature and function of the Loaded Source in the manufacturing process to determine its eligibility for Modvat credit. Due to inadequate examination by lower authorities, the case was remanded for fresh consideration, while the appeal concerning the Flat Spring was rejected.
4. The Cross objections filed by the respondents were disposed of in similar terms, aligning with the decisions made in the main appeal. The judgment emphasized the importance of a thorough assessment of items' nature and function in the manufacturing process to determine their eligibility for Modvat credit under Rule 57Q.
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2002 (8) TMI 534
Issues Involved:
1. Removal of PVC pipes without proper accounting.
2. Removal of scrap for conversion without permission.
3. Correlation between raw materials and finished goods.
4. Inquiry regarding Modvat inputs removed to another company.
5. Invocation of the extended period of limitation.
6. Imposition of redemption fine and penalty.
Issue-wise Detailed Analysis:
1. Removal of PVC pipes without proper accounting:
The appellants admitted to removing PVC pipes to M/s Flexoflex (FPL) without payment of duty due to inadequate storage space. Both companies are separate legal entities, and no documentary evidence was provided to support the arrangement. The appellants failed to demonstrate that the removed goods were cleared on payment of duty. The lower authority correctly concluded that there was a contravention of Rule 9(1) and Rule 49 of the CE Rules, 1944, making the goods liable to duty.
2. Removal of scrap for conversion without permission:
The appellants admitted to removing scrap for conversion into pipes without obtaining the necessary permission under Rule 57F(3). The contravention of the Rules was evident, and the appellants did not provide acceptable evidence regarding the removal of converted goods on payment of duty. The Commissioner's finding in this regard was upheld.
3. Correlation between raw materials and finished goods:
The appellants claimed a raw material to finished goods ratio of 100:95. However, the records showed removal of raw material and finished goods, with discrepancies in stock accounting. The lower authority's conclusion that correlation between raw material and finished goods was not possible was upheld.
4. Inquiry regarding Modvat inputs removed to another company:
The appellants contended that Modvat inputs were removed on a loan basis and later returned. However, there was no evidence provided to support this claim. The burden of proof was on the appellants, which they failed to discharge. The adjudicating authority's conclusion was upheld.
5. Invocation of the extended period of limitation:
The evidence on record indicated the appellants' mala fide intention in removing goods to FPL without payment of duty. The invocation of the extended period of limitation was deemed correct.
6. Imposition of redemption fine and penalty:
The appellants were levied a redemption fine of Rs. 1,50,000/- on goods valued at Rs. 3,89,620/-, which was considered excessive and reduced to Rs. 75,000/-. The penalty of Rs. 20,00,000/- was also deemed harsh and excessive, and reduced to Rs. 5,00,000/-.
Conclusion:
Except for the modifications in redemption fine and penalty, the impugned order was upheld, and the appeal was dismissed.
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2002 (8) TMI 533
The Appellate Tribunal CEGAT, New Delhi heard a case regarding a dispute over invoices issued by M/s. Grasim Industries. The appellant requested the pre-deposit of duty and penalty to be waived, but the Tribunal directed them to deposit Rs. 80,000 towards duty by a specified date, with the balance amount waived and stayed during the appeal process. Compliance was to be reported on 18-9-2002.
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2002 (8) TMI 532
Issues:
1. Disallowance of Modvat credit taken on the basis of original copies of invoices without prior permission.
2. Imposition of personal penalty on the assessee.
3. Appeal against the decision of the Asstt. Commissioner and Commissioner (Appeals).
Issue 1: Disallowance of Modvat Credit:
The appellants had taken Modvat credit of Rs. 90,662/- on inputs based on original copies of invoices, as the duplicate copies were lost in transit. Despite repeated representations and reminders to the jurisdictional Asstt. Commissioner seeking permission, no response was received. The Asstt. Commissioner disallowed the credit under Rule 57-I and imposed a personal penalty on the assessee. The Commissioner (Appeals) upheld this decision. However, the Asstt. Commissioner failed to address the crucial question of whether permission to take Modvat credit on the basis of original copies was justified. The Tribunal found that the Asstt. Commissioner misinterpreted the law, as the appellants had a right to satisfy the Asstt. Commissioner regarding the lost duplicate copies. The Tribunal set aside the previous orders, directing a reevaluation after determining if the duplicate copies were lost in transit and if Modvat credit could be granted based on the original copies.
Issue 2: Imposition of Personal Penalty:
The Asstt. Commissioner imposed a personal penalty on the assessee in addition to disallowing the Modvat credit. The Tribunal did not specifically address the penalty issue in the judgment, focusing primarily on the disallowance of credit based on procedural grounds. Therefore, the imposition of the personal penalty was not a central point of contention in the appeal.
Issue 3: Appeal Against Previous Decisions:
The appeal was filed against the decisions of both the Asstt. Commissioner and the Commissioner (Appeals) regarding the disallowance of Modvat credit taken on the basis of original invoices. The Tribunal found faults in the reasoning of both authorities, emphasizing the failure to properly consider the rights of the assessee in satisfying the Asstt. Commissioner about the lost duplicate copies. The Tribunal set aside the previous decisions and remanded the matter for a fresh adjudication, ensuring the assessee's right to be heard and a proper determination of the admissibility of the Modvat credit.
In conclusion, the judgment by the Appellate Tribunal CEGAT, New Delhi addressed the disallowance of Modvat credit taken without prior permission, highlighting the procedural lapses in the decision-making process by the lower authorities. The Tribunal emphasized the importance of the assessee's right to satisfy the Asstt. Commissioner regarding the lost duplicate copies of invoices before disallowing the credit. The judgment set aside the previous orders and directed a reevaluation of the matter, ensuring a fair opportunity for the assessee to present their case.
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2002 (8) TMI 530
Issues Involved:
1. Admissibility of the settlement application.
2. Allegations of under-valuation and mis-declaration of import values.
3. DRI's investigation and issuance of Show Cause Notices (SCNs).
4. Determination of the correct duty liability.
5. Immunity from prosecution, penalty, and interest.
Issue-wise Detailed Analysis:
1. Admissibility of the Settlement Application:
The applicant, M/s. Chawla Enterprises Limited, filed an application before the Customs and Central Excise Settlement Commission for settlement of their case regarding imports made during 1-1-1997 to 31-8-1999. The application was filed under Section 127B of the Customs Act, 1962, after the lapse of 180 days from the date of search and seizure by the Directorate of Revenue Intelligence (DRI). The applicant admitted an additional duty liability of Rs. 48,52,382.01 and requested for halting the DRI investigation, waiving the issue of SCN, and immunity from prosecution, penalty, and interest.
2. Allegations of Under-Valuation and Mis-Declaration of Import Values:
The DRI reported under-valuation of imports to the extent of Rs. 275 lakhs in 36 consignments. They indicated that the value declared to Hongkong Customs at the time of export was higher than the value declared in the import invoices to Indian Customs, suggesting mis-declaration. The applicant contended that any discrepancy might have arisen due to the supplier's declaration for their own purposes and agreed to pay the differential duty.
3. DRI's Investigation and Issuance of SCNs:
The DRI continued their investigation and issued three SCNs demanding a total duty of Rs. 3.92 crores for 107 consignments based on evidence from Hongkong Customs. The applicant objected to the continuation of the investigation but was directed to submit a tabular statement of discrepancies and comments on the sealed cover contents.
4. Determination of the Correct Duty Liability:
The Commission found that the applicant had not made a full and true disclosure of their duty liability. The applicant admitted liability for only 28 consignments despite evidence for 36 consignments. The Commission upheld the DRI's claim of Rs. 1,20,53,871/- for 36 consignments and rejected the applicant's disclosed amount of Rs. 48,52,382.01. For the remaining 71 consignments, the Commission found the DRI's approach of derived values reasonable, resulting in a total duty liability of Rs. 3,91,60,885/-.
5. Immunity from Prosecution, Penalty, and Interest:
The Commission concluded that the applicant did not disclose their full and true duty liability and thus was not entitled to full immunity under Section 127H of the Act. However, considering the applicant's cooperation, partial waiver of penalty and interest was granted. The applicant was granted immunity from prosecution but was required to pay the balance duty of Rs. 2,91,60,885/-, interest at 10% per annum for 36 consignments, and a penalty of Rs. 40 lakhs within 30 days.
Final Order:
The case was settled with the following terms:
1. Payment of the balance duty of Rs. 2,91,60,885/- within 30 days.
2. Immunity from prosecution under the Customs Act, 1962.
3. Payment of simple interest at 10% per annum for 36 consignments.
4. Payment of a penalty of Rs. 40 lakhs within 30 days.
The settlement would be void if obtained by fraud or misrepresentation, and the applicant was reminded of the provisions under Section 127H regarding immunities.
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2002 (8) TMI 529
The Commissioner of Central Excise, Lucknow filed appeals against an order regarding the classification of remnants from tin plates/sheets as waste and scrap. The tribunal upheld that the remnants are waste arising in the manufacturing process and can be cleared on payment of duty. The duty rates for tin plates/sheets and waste and scrap are the same, so no extra duty is applicable. The appeals filed by the Revenue were dismissed.
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2002 (8) TMI 528
Issues:
1. Seizure of ready-made garments of foreign origin at domestic air-cargo complex.
2. Allegations of smuggling against the appellant.
3. Confiscation and redemption of the seized garments.
4. Burden of proof in cases of seized goods.
5. Appellant's claim based on baggage receipts.
6. Legal principles regarding burden of proof in smuggling cases.
Analysis:
1. The judgment revolves around the seizure of ready-made garments of foreign origin at the domestic air-cargo complex of Indian Airlines. The consignment, including garments belonging to the appellant, was found with a fake address in Bombay, leading to its seizure by customs officers.
2. Allegations of smuggling were raised against the appellant based on the investigation. Statements from individuals like Shri Madhusudan Poddar and Shri Sanjay Gupta implicated the appellant in the illegal import of garments. The Commissioner released a major portion of the garments but confiscated a portion valued at Rs. 15,000, offering the appellant an option to redeem them on payment of a fine and duty.
3. The issue of confiscation and redemption of the seized garments was central to the case. The Commissioner's decision to confiscate a portion of the garments owned by the appellant was based on the evidence and statements provided during the investigation.
4. The judgment delves into the burden of proof in cases involving seized goods. It discusses how the burden shifts to the appellant if the Revenue presents evidence contradicting the appellant's claims. Legal precedents, such as the case of M/s. Kanungo & Co. v. CC, were cited to support the shift in burden of proof.
5. The appellant's defense relied on baggage receipts produced to support the licit import of the garments. However, the statements of individuals like Shri Poddar and Shri Gupta undermined the appellant's claims, leading to the rejection of the appeal.
6. Legal principles regarding the burden of proof in smuggling cases were extensively discussed. The judgment emphasized that when false evidence is presented, the burden of proof shifts to the appellant to prove otherwise. In this case, the appellant failed to refute the evidence presented by the Revenue, leading to the dismissal of the appeal.
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2002 (8) TMI 526
Issues:
Confiscation of 'Urad Dal' and 'Matar Green' for illegal export to Nepal, redemption fines imposed, personal penalties on individuals, discrepancies in statements, justification for confiscation of goods and truck, evidence for illegal export, imposition of penalties.
Confiscation of Goods and Truck:
The case involved the confiscation of 'Urad Dal' and 'Matar Green' valued at Rs. 5,00,000 due to suspicion of illegal export to Nepal. The Commissioner of Customs, Patna imposed redemption fines and personal penalties on individuals. The truck carrying the goods was intercepted at a petrol pump in Raxaul. The driver revealed that the goods were sent from Delhi to Raxaul and intended for export to Nepal. However, the owner claimed the goods were for local sale. The Tribunal found discrepancies in statements but lacked concrete evidence supporting illegal export. Consequently, the confiscation of goods and the truck was set aside.
Discrepancies and Lack of Evidence:
The Revenue's case relied on the driver's statement alleging pressure from the traders to go to Nepal. However, there was no independent corroboration of this claim. Statements from the traders and the owner contradicted the driver's account, asserting they were not exporters. Minor discrepancies in statements did not establish illegal export. The Tribunal concluded that the evidence presented was insufficient to support the confiscation of goods and the truck.
Imposition of Penalties:
The Tribunal found no justification for imposing personal penalties on the appellants based on the discussions and lack of substantial evidence supporting the allegations of illegal export. Therefore, the penalties imposed on the individuals were set aside along with the confiscation of goods and the truck. All three appeals were allowed, providing consequential relief to the appellants, and the stay petitions were disposed of accordingly.
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2002 (8) TMI 502
Issues Involved:
1. Whether the appellant collected duty twice by including it in the price and showing it separately on invoices.
2. Whether the appellant was entitled to deduct excise duty as abatement.
3. Whether the larger period of limitation under Section 11D of the Central Excise Act, 1944, could be invoked.
4. Whether the penalty under Rule 173Q of the Central Excise Rules, 1944, was justified.
5. Whether the demand was barred by limitation.
6. Whether Section 11D of the Central Excise Act, 1944, was enforceable.
Issue-Wise Detailed Analysis:
1. Collection of Duty Twice:
The appellant was accused of collecting duty twice: once by including it in the price and again by showing the excise duty amount separately on invoices. The show cause notices alleged that the value adopted for duty purposes was the price quoted in the tender/purchase order, which was inclusive of Central Excise duty. The department claimed that the appellant had collected Central Excise duty on the cum-duty price mentioned in the tender/purchase order price. The Commissioner confirmed that the appellant collected duty twice and did not pay the excess amount to the Central Government, thus violating Section 11D of the Central Excise Act, 1944.
2. Deduction of Excise Duty as Abatement:
The appellant contended that the abatement towards excise duty was wrongly described as a discount and that they were entitled to deduct excise duty payable under Section 4(4)(d)(I) of the Central Excise Act, 1944. The Commissioner rejected this argument, stating that neither discount nor abatement of Central Excise duty is allowed under the law. The Tribunal found that the appellant had used a formula to work out the assessable value and thereafter the duty, which did not have the approval of law laid down by the Supreme Court.
3. Larger Period of Limitation:
The appellant argued that Section 11D is subject to Section 11A and that the entire demand was barred by limitation. The Commissioner, however, held that the appellant was fully aware that the value given in the tender/purchase order was inclusive of Central Excise duty and did not inform the department, thus suppressing facts and evading duty. Therefore, the larger period of limitation was justified.
4. Penalty under Rule 173Q:
The Commissioner imposed a penalty of Rs. 20 lakhs under Rule 173Q(1) of the Central Excise Rules, 1944, for contravening Rule 173C(3A). The Tribunal found no evidence of collection of any amount in excess of the excise duty on the invoice and stated that there was no case for making a demand under Section 11D. Consequently, the Tribunal found no reason to uphold the penalty under Rule 173Q, as it was not applicable for contraventions of Section 11D.
5. Demand Barred by Limitation:
The appellant contended that the demand was barred by limitation. The Commissioner rejected this, stating that the appellant suppressed facts with the intention of evading duty. The Tribunal found that there was a short-payment of Rs. 767.23 over five years due to the use of an incorrect formula, but no demand was made under Section 11A. Therefore, while acknowledging the short-payment, the Tribunal could not direct its payment.
6. Enforceability of Section 11D:
The appellant argued that Section 11D had been held unenforceable by the Hon'ble Madras High Court. The Commissioner did not address this argument in detail. The Tribunal did not find any amount collected that required deposit under Section 11D and thus found no reason to uphold the penalty under Rule 173Q.
Conclusion:
The Tribunal found no evidence of duty collection in excess of the invoiced amount and no basis for the demand under Section 11D. The penalty under Rule 173Q was also found to be unjustified. The Tribunal remanded the matter to the Commissioner to re-determine the duty payable using the formula laid down by the Supreme Court in the MRF case and to consider the calculations provided by the appellant. The appeal was disposed of accordingly.
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