1998 (7) TMI 603 - AT - Central Excise

Issues:
1. Appeal against Order-in-Original confirming demand and penalty for non-payment of duty on talcum powder.
2. Dispute regarding the value of clearances exceeding the prescribed limit.
3. Confiscation of goods and imposition of penalty by the Collector.
4. Argument on assessable value inclusive of goods manufactured by another entity.
5. Examination of purchase bills and production register to determine the origin of goods.
6. Consideration of oral instructions for printing on tins and credibility of production register.
7. Declaration by another entity regarding manufactured goods.
8. Omission in declaration and information provided by a witness.
9. Refusal to allow deduction for sales tax.
10. Rejection of claim for deduction of discount.
11. Contention on free tins provided and adjustment in assessable value.
12. Setting aside the impugned order and remanding the case for a fresh decision.

Analysis:
1. The appeal challenged the Order-in-Original confirming a demand of Rs. 3,24,678.36 and a penalty of Rs. 1,00,000 on the appellant for non-payment of duty on talcum powder cleared during 1986-87, exceeding the prescribed limit of Rs. 5,00,000 as per Notification 140/83. The notice proposed to impose duty on the excess value of clearances and penalty, without invoking the larger period of limitation under Section 11A(1) of the Central Excise Act, 1944.

2. The dispute primarily revolved around the value of clearances, with the appellant arguing that a portion of the goods included in the total value of Rs. 11.18 lakhs was manufactured by another entity, Saloni Cosmetics. The appellant presented various documents, including purchase bills, an agreement, and a production register, to support this claim.

3. The Collector, however, overruled the appellant's contentions, confiscating goods and imposing a penalty. The main contention was that the assessable value included goods manufactured by Saloni Cosmetics, but the Collector did not specifically address the agreement and production register in the impugned order.

4. The Tribunal examined the purchase bills obtained by Saloni Cosmetics, noting the absence of specific details related to the printing on tins. The explanation that oral instructions were given for printing was deemed insufficient, as printed matter would typically require written instructions. The production register maintained by Saloni Cosmetics also lacked specific details, raising doubts about its authenticity.

5. The Tribunal further analyzed a declaration submitted by Saloni Cosmetics, which did not mention the manufacture of talcum powder, undermining the appellant's claim that a portion of the goods was sourced from Saloni Cosmetics. The omission in the declaration and the testimony of a witness, G.M. Kadapure, played a crucial role in the decision.

6. The Collector's refusal to allow deduction for sales tax paid by the appellant was upheld, as the appellant was enjoying an exemption from sales tax at the relevant time. Similarly, claims for deductions related to discounts were rejected due to lack of substantiating evidence.

7. The appellant's argument regarding the supply of free tins and adjustment in assessable value was considered, with the Tribunal directing a reevaluation based on documentary evidence, particularly invoices that referenced the supply of extra tins free of charge.

8. Ultimately, the Tribunal set aside the impugned order and remanded the case to the Adjudicating Authority for a fresh decision in accordance with the law and the findings outlined in the order, providing the appellant with an opportunity for a personal hearing.

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