2002 (1) TMI 1035 - AT - Central Excise

Summary

Issues:
Central excise duty liability on the appellants for machinery supplied; Imposition of penalty under Section 11AC; Calculation of interest under Section 11AB; Inclusion of bought out items in assessable value; Relevance of duty rate at the time of clearance; Applicability of extended period of limitation under Section 11A; Consideration of evidence like gate passes and invoices; Applicability of penalty under Section 11AC; Examination of documents for remand.

Central Excise Duty Liability:
The case involved the appellants' liability for central excise duty on machinery supplied, with the ld. Consultant arguing that duty is levied on manufactured goods as they leave the factory. The appellants contended that duty had already been paid on goods cleared from the factory, and no further duty was payable. The ld. Consultant highlighted that duty should be levied only on goods manufactured and cleared, emphasizing the distinction between goods assembled at the site and marketable excisable goods.

Imposition of Penalty and Interest:
The ld. Consultant argued against the imposition of penalty under Section 11AC, citing the absence of intention to evade duty payment and the belief that no duty was payable. Additionally, the calculation of interest under Section 11AB was challenged, emphasizing the rate of duty applicable at the time of clearance and the limitation period for enforcement.

Inclusion of Bought Out Items:
A key contention was the inclusion of bought out items in the assessable value, with the ld. Consultant asserting that such items sent directly to the site should not be considered for computing the assessable value. The argument focused on the emergence of marketable excisable goods after assembly at the site.

Relevance of Duty Rate and Limitation:
The ld. Consultant stressed that the duty rate at the time of clearance, not at the time of the show cause notice, should apply. Moreover, the demand was challenged on the grounds of limitation, with assertions that the extended period of limitation under Section 11A was inapplicable due to a bona fide belief that no duty was payable.

Consideration of Evidence and Remand:
Evidence such as excise gate passes, invoices, and challans showing payment of duty on inputs and transport of goods were presented. The need for a thorough examination of these documents was emphasized for a clear understanding of the case. The decision to remand the case for further examination of crucial documents and consideration of relevant judgments was made in light of the Apex Court's decisions.

Conclusion:
The Appellate Tribunal allowed the miscellaneous application, setting aside the impugned order and remanding the appeal for further examination. The directive to the Commissioner to review important documents and consider relevant judgments indicated a need for a comprehensive reevaluation of the case. The decision underscored the significance of thorough assessment and adherence to legal principles in determining central excise duty liability, penalty imposition, interest calculation, and the inclusion of bought out items in the assessable value.