2001 (6) TMI 590 - AT - Central Excise

Summary

Issues:
1. Dispute over the computation of assessable value under Valuation Rule 6(b)(i) or 6(b)(ii).
2. Time-barred demand for duty and penalty.
3. Financial hardship of the appellant.

Analysis:
1. The appellant, engaged in the manufacture of Ethyl Alcohol-Denatured, had a dispute with the Department regarding the computation of assessable value under Valuation Rule 6(b)(i) or 6(b)(ii). The Department contended that when the value of comparable goods was available, Rule 6(b)(i) should apply. However, the appellant argued that the price considered by the Department was not of comparable goods and thus, the assessable value should be determined under Rule 6(b)(ii). The Tribunal found the issue debatable as the Department had not considered the average price of comparable goods, leading to a lack of clarity in the valuation process.

2. Regarding the time-barred demand for duty and penalty, the appellant claimed that the demand for a significant amount was for a period beyond six months from the issuance of the Show Cause Notice (SCN). The appellant argued that the demand for approximately four years was time-barred as per the relevant provisions. However, the Department justified the extension of the demand period based on the availability of a higher price for comparable goods. The Tribunal noted that a major part of the demand fell beyond the six-month limit, raising questions about the validity of the demand.

3. Addressing the financial hardship faced by the appellant, it was highlighted that the company had incurred losses and was experiencing financial difficulties. The appellant's counsel emphasized the inability to deposit any amount of duty and penalty due to the financial crisis. On the other hand, the Department contended that the appellant had substantial cash reserves and could make the required payments. Considering the financial condition of the company, the Tribunal directed the appellant to deposit a specific sum towards duty within a specified timeframe. Upon compliance with this directive, the balance amount of duty and total penalty would be waived, and recovery stayed during the appeal process.

In conclusion, the judgment addressed the contentious issues of valuation methodology, the time limitation for demands, and the financial constraints faced by the appellant. The Tribunal's decision aimed to balance the interests of both parties by providing a specific directive for the deposit of duty while considering the appellant's financial challenges.