2001 (3) TMI 189 - AT - Central Excise

Summary

Issues:
1. Allegation of clandestine manufacturing and clearance of PET bottles without duty payment.
2. Duty demand on imported machinery for EOU.
3. Valuation method adopted for duty calculation.
4. Confiscation of machinery and imposition of penalties.
5. Adjudication process and remand for fresh decision.
6. Deposit made by the appellant.

Analysis:

Issue 1: The case involved allegations of clandestine manufacturing and clearance of PET bottles without duty payment. The appellant, an EOU, was accused of producing over 13 lakhs PET bottles clandestinely in the EOU and clearing them without duty payment to the DTA. The impugned order confirmed these allegations and imposed penalties, including confiscation of machinery.

Issue 2: The appellant contended that the duty demand on imported machinery for EOU was beyond the Commissioner's authority. They argued that duty should only be demanded upon closure of the EOU and de-bonding of machinery. The appellant highlighted that the EOU scheme aims to promote export production and that the actions taken were contrary to established legal positions and circulars.

Issue 3: The appellants challenged the valuation method adopted for duty calculation, arguing that the Commissioner treated the entire price of the bottles as assessable value, contrary to established legal principles. They emphasized that gross realization on the sale of goods should be treated as cum-duty value, with deductions for duty to arrive at the assessable value.

Issue 4: The appellants also raised concerns about the confiscation of machinery and imposition of penalties without considering the evidence placed on record by them. They argued that the Commissioner's decision was based on incorrect valuation and that the entire order should be set aside for a reevaluation of the evidence and relevant laws.

Issue 5: The Tribunal found glaring illegalities in the order and remanded the case for a fresh adjudication to the jurisdictional Commissioner. The Tribunal set aside the confiscation of capital goods and quashed the duty demand on those goods, emphasizing that the appellants should be given an opportunity to present their case fully.

Issue 6: The appellant had made a deposit of Rs. 1.5 lakhs, which was to remain with the Revenue during the adjudication proceedings. The deposit could be adjusted towards the duty payable by the appellant at the time of final adjudication, ensuring compliance with financial obligations during the legal process.