2003 (9) TMI 498 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalties imposed by the Commissioner of Central Excise.
2. Correct method of valuation of goods cleared between units.
3. Application of extended period of limitation.
4. Consideration of waiver of pre-deposit of penalties.

Analysis:

Issue 1: Duty demand and penalties imposed by the Commissioner of Central Excise
The Commissioner of Central Excise confirmed a duty demand of Rs. 1,05,37,293/- and imposed penalties on the manufacturer, General Manager, and Assistant Manager for alleged suppression of facts related to the inter-relationship between two units and incorrect price declaration for goods cleared between them. The duty demand was based on the determination of the value of goods cleared under Rule 8 and Rule 9 of the Central Excise Valuation Rules, 2000.

Issue 2: Correct method of valuation of goods cleared between units
The correct method of valuation of goods cleared between units was considered debatable. The Tribunal noted that the entire duty amount had been deposited through Modvat/Cenvat credit. Citing the decision in Jay Yushin Ltd. v. C.C.E., New Delhi, the Tribunal found that the allegation of suppression to evade duty did not hold as the demand was prima facie barred by limitation. The Tribunal waived the pre-deposit of penalties based on this finding.

Issue 3: Application of extended period of limitation
The extended period of limitation was applied against the assessees for the period in dispute from July 2000 to June 2001. The Tribunal, however, held that the demand was prima facie barred by limitation based on the decision in Jay Yushin Ltd. case, and therefore, waived the pre-deposit of penalties.

Issue 4: Consideration of waiver of pre-deposit of penalties
Considering the facts and legal precedents, the Tribunal waived the pre-deposit of penalties imposed on the manufacturer, General Manager, and Assistant Manager pending the appeals. The Tribunal found that the allegation of suppression for evading duty did not hold in this case, leading to the decision to stay the recovery of penalties.

This detailed analysis of the judgment highlights the key issues involved, the legal reasoning applied by the Tribunal, and the ultimate decision regarding the duty demand, penalties, valuation of goods, application of limitation period, and waiver of pre-deposit of penalties.