2002 (8) TMI 382 - AT - Central Excise

Summary

Issues Involved:
1. Classification of goods.
2. Valuation of goods.
3. Limitation period for demand of duty.
4. Quantification of demand.
5. Revenue neutrality.
6. Applicability of Rule 57S(8) to (10).
7. Imposition of penalties.

Summary:

1. Classification of Goods:
The classification dispute regarding Dies, Plungers, and Rings manufactured by M/s. Autolite and removed from their factory without payment of duty was not pressed by the appellants. The Tribunal upheld the Commissioner's decision classifying these goods as parts of moulds under CSH 8480.90.

2. Valuation of Goods:
The Commissioner adopted the value declared by M/s. Autolite on their invoices at the time of removal of the goods from the factory. The Tribunal found the declared prices to be correct and reliable, rejecting the appellants' arguments against the valuation. The Commissioner's valuation under Rule 6(b)(i) of the valuation Rules was upheld.

3. Limitation Period for Demand of Duty:
The Tribunal upheld the Commissioner's decision to invoke the extended period of limitation u/s 11A(1) of the Central Excise Act, 1944, due to M/s. Autolite's wilful misstatement and suppression of facts. The demand of duty was not considered time-barred.

4. Quantification of Demand:
The Tribunal observed discrepancies in the quantification of duty and noted that the Commissioner did not adequately address the appellants' contentions regarding the actual quantity of goods manufactured and cleared. The matter was remanded to the Commissioner for re-quantification of the demand.

5. Revenue Neutrality:
The Tribunal rejected the appellants' plea of revenue neutrality, noting that the situation depended on the lens-manufacturers at Firozabad taking Modvat credit, which did not align with the Tribunal's Larger Bench decision in Jay Yuhshin Ltd. v. CCE, New Delhi. The plea was not sufficient to disprove the intent to evade duty.

6. Applicability of Rule 57S(8) to (10):
The Tribunal found that M/s. Autolite did not fulfill the conditions of Rule 57S(8) to (10), such as obtaining the Commissioner's permission for removing moulds and dies without payment of duty. The existence of an alternative scheme did not constitute a valid defense against the department's allegations.

7. Imposition of Penalties:
The Tribunal set aside the penalties imposed under Section 11AC and directed the Commissioner to re-determine the quantum of penalty based on the re-quantified duty. The cumulative penalty of Rs. 75 lakhs imposed under various rules was also set aside for reconsideration. The penalty of Rs. 20 lakhs on Sh. M.P. Gupta, Director of M/s. Autolite, was set aside due to insufficient findings against him.

Majority Order:
The Tribunal upheld the Commissioner's decisions on classification, valuation, and limitation issues. The demand of duty was set aside for re-quantification, and the penalties were remanded for re-determination. Appeal No. E/2175/2000-B was rejected on classification, valuation, and limitation issues but allowed by remand for re-quantification and re-determination of penalties. Appeal No. E/2176/2000-B was allowed.