2001 (10) TMI 937 - AT - Central Excise

Summary

Issues Involved:

1. Differential duty short paid on CRSS cleared on stock transfer basis.
2. Duty not paid on blades not accounted for in statutory records.
3. Duty not paid on blades used for testing purposes.
4. Duty on quantities reported stolen.
5. Irregular credit availed on fake invoices.
6. Penalty equivalent to duty demanded.
7. Penalty for irregular credit availed.
8. Interest on demanded amounts.
9. Penalty for contravention of Central Excise Rules.

Detailed Analysis:

1. Differential Duty Short Paid on CRSS Cleared on Stock Transfer Basis:
The appellants challenged the demand of Rs. 97,25,682/- for differential duty on CRSS strips cleared on a stock transfer basis. They argued that the valuation should be based on the selling price of Vidyut Metallics Ltd. as per Notification No. 27/92 and the Apex Court's ruling in Ujagar Prints v. U.O.I. The Tribunal noted that the Commissioner did not consider the second Cost Accountant's report and misapplied the valuation rules. The matter was remanded for reconsideration.

2. Duty Not Paid on Blades Not Accounted for in Statutory Records:
The appellants contested the demand of Rs. 50,32,212/- for duty on blades allegedly removed without payment of duty. They argued that the valuation should be based on the manufacturer's selling price, not the job worker's. The Tribunal found that the Commissioner did not wait for the second Cost Accountant's report and remanded the matter for re-evaluation.

3. Duty Not Paid on Blades Used for Testing Purposes:
The appellants disputed the demand of Rs. 3,72,209/- for duty on blades used for testing. They argued that the valuation should consider the manufacturer's selling price. The Tribunal remanded the matter for reconsideration, emphasizing the need to follow the correct valuation principles.

4. Duty on Quantities Reported Stolen:
The appellants challenged the demand of Rs. 3,141/- for duty on stolen quantities. The Tribunal noted that the Commissioner did not properly consider the appellants' arguments and remanded the matter for re-evaluation.

5. Irregular Credit Availed on Fake Invoices:
The appellants contested the demand of Rs. 1,71,083/- for irregular credit availed on fake invoices. They argued that the Commissioner did not consider the second Cost Accountant's report. The Tribunal remanded the matter for reconsideration, emphasizing the need to follow the correct valuation principles.

6. Penalty Equivalent to Duty Demanded:
The appellants challenged the penalties imposed under Sec. 11A of the CEA, 1944. They argued that the penalties were not justified as the valuation was incorrect. The Tribunal remanded the matter for reconsideration, emphasizing the need to follow the correct valuation principles.

7. Penalty for Irregular Credit Availed:
The appellants contested the penalties imposed under Rule 57-I(4) of the CE Rules, 1944. They argued that the penalties were not justified as the valuation was incorrect. The Tribunal remanded the matter for reconsideration, emphasizing the need to follow the correct valuation principles.

8. Interest on Demanded Amounts:
The appellants challenged the interest on the demanded amounts under Sec. 11AB of the CEA, 1944. They argued that the interest was not justified as the valuation was incorrect. The Tribunal remanded the matter for reconsideration, emphasizing the need to follow the correct valuation principles.

9. Penalty for Contravention of Central Excise Rules:
The appellants contested the penalties imposed under Rules 9(2), 52A(8), and 173Q of the CE Rules, 1944. They argued that the penalties were not justified as the valuation was incorrect. The Tribunal remanded the matter for reconsideration, emphasizing the need to follow the correct valuation principles.

Conclusion:
The Tribunal granted a waiver of pre-deposit and stayed the recovery, remanding the matter to the Commissioner of Central Excise, Hyderabad, for de novo consideration. The Commissioner was directed to re-evaluate the case in light of the second Cost Accountant's report and relevant judgments, ensuring a proper application of valuation principles and providing full opportunity for the appellants to present their case.