2002 (10) TMI 672 - AT - Central Excise

Summary

Issues:
1. Demand of Central Excise duty on removed goods
2. Imposition of penalty under Section 11AC
3. Charging of interest under Section 11AB
4. Appropriation of deposited amount against demand/penalty
5. Confiscation of seized finished goods
6. Computation of assessable value
7. Reduction of penalty
8. Refund of excess security deposit

Analysis:

1. The show cause notice was issued to the appellant-company regarding the removal of goods without discharging duties. The Additional Commissioner confirmed the duty demand and imposed a penalty. The appeal challenged the computation of assessable value on the removed goods, questioning the method used by the Department.

2. The appellant argued that the Department failed to provide documentary evidence for the actual production and sale value of the goods. They contended that the assessable value should be determined using a specific formula from a Supreme Court case, which would reduce the duty amount significantly.

3. The invocation of penalty under Section 11AC was disputed by the appellant, claiming that it was not justified. They sought a reduction in the penalty amount based on various legal precedents.

4. The appellant also requested a refund of the excess security deposit, stating that the duty on the provisionally released seized goods had been overpaid. They argued that the duty liability was covered by the initial deposit and sought a reduction in penalty.

5. The Tribunal acknowledged the admission of clandestine removal by the appellant and the liability for confiscation of the seized goods. They agreed to calculate duty based on the cum-duty price of the removed goods, following a Supreme Court decision.

6. The penalty under Section 11AC was deemed excessive and was reduced to 25% of the duty amount, as per the MRF formula. The Tribunal confirmed that the penalty should not exceed the specified percentage of the duty.

7. The Tribunal upheld the confiscation of the seized goods and the security deposit, as there was evidence of clandestine removal. However, they clarified that no additional duty could be demanded on the provisionally released goods.

8. The judgment directed a redetermination of duty based on the MRF decision, with a corresponding reduction in the penalty amount. Any excess payment by the appellant was to be refunded. The appeal was disposed of accordingly.