2001 (7) TMI 762 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty demand under Notification No. 1/93 for copper alloy articles.
2. Applicability of limitation period for duty demand.
3. Imposition of personal penalty under Section 11AC.
4. Misstatement and suppression leading to evasion of duty.
5. Reduction of penalty amount.
6. Adjustment of deposited amount towards the duty demand.

Confirmation of Duty Demand under Notification No. 1/93:
The judgment confirms the demand of duty on copper alloy articles under Notification No. 1/93. The appellants did not dispute that the products were not specified under the notification. The Classification List filed by the appellants did not mention the notification, and they cleared goods at a concessional rate despite declaring a higher duty rate. The authorities rightly invoked the extended period of limitation due to misstatement and evasion of duty.

Applicability of Limitation Period:
The consultant for the appellants argued that the duty demand raised after a significant delay was barred by limitation. However, the judgment held that the appellants' conduct of declaring a higher duty rate while availing the concessional rate amounted to misstatement and suppression, justifying the invocation of the extended limitation period.

Imposition of Personal Penalty under Section 11AC:
The appellants contested the imposition of a personal penalty under Section 11AC, claiming it was not justified as the provision was not in force during the relevant period. The judgment agreed that Section 11AC did not apply retroactively but noted that the show cause notice also proposed a penalty under Rule 173Q. The penalty amount was reduced from Rs. 15,435.00 to Rs. 5,000.00 based on this consideration.

Misstatement and Suppression Leading to Evasion of Duty:
The Revenue argued that the appellants' actions amounted to misstatement and suppression with the intent to evade duty payment. The judgment concurred, highlighting the inconsistency between the declared duty rate in the Classification List and the actual concessional rate availed by the appellants, leading to a clear case of evasion.

Reduction of Penalty Amount:
The judgment reduced the penalty amount from Rs. 15,435.00 to Rs. 5,000.00 considering the absence of applicability of Section 11AC for the relevant period and the proposal of penalty under Rule 173Q in the show cause notice.

Adjustment of Deposited Amount Towards Duty Demand:
The appellants had already deposited Rs. 680.00 towards the differential duty amount. The judgment directed the Additional Commissioner to consider this deposit while quantifying the duty demand, ensuring proper adjustment of the deposited amount in the final calculation.