2002 (1) TMI 836 - AT - Central Excise

Summary

Issues:
1. Shortage of Tape Deck Mechanism (TDM) used in manufacturing final products without payment of duty.
2. Demand of duty exceeding exemption limit and imposition of personal penalty.
3. Contention regarding TDM sent for sub-assembly and return for final product manufacturing.
4. Allegations of surreptitious activities and unrecorded finished goods.
5. Recalculation of duty demand based on Notification No. 1/93.

Analysis:
1. The judgment addresses the initial issue of a shortage of TDM, the principal raw material, used in manufacturing final products without duty payment. The Managing Director admitted to the error and agreed to pay the due duty, leading to the demand of duty exceeding the exemption limit and a personal penalty.

2. The second issue involves the demand of duty surpassing the exemption limit and the imposition of a personal penalty. The appeal against the order confirming the duty demand and penalty was unsuccessful before the appellate authority, prompting the present appeal before the tribunal.

3. The contention regarding the TDM sent for sub-assembly and returned for final product manufacturing was raised by the appellants. However, the tribunal rejected this plea as the shortage was admitted during the officers' visit, and the Managing Director's statement confirmed the utilization of TDM in the final product.

4. The judgment addresses allegations of surreptitious activities and unrecorded finished goods found in the factory, indicating potential irregularities. The tribunal found no justification to set aside the findings of the authorities based on these observations.

5. Finally, the recalibration of the duty demand based on Notification No. 1/93 was discussed. The duty demand was required to be re-calculated as clearances exceeding the exemption limit attract a concessional rate of duty of 5%, contrary to the initially calculated rate. The tribunal directed the original adjudicating authority to re-quantify the demand and adjust the penalty accordingly.

In conclusion, the tribunal upheld the duty demand and penalty while directing the re-calculation of the duty amount in accordance with the concessional rate specified in Notification No. 1/93.