2004 (5) TMI 435 - AT - Central Excise

Summary

Issues:
1. Undervaluation of C2O3 leading to duty demand.
2. Levy of penalty, interest, and duty under Central Excise Rules.
3. Show cause notices issued for denying duties.
4. Adjudication of the notices by the Commissioner.
5. Liability of duty on merits not pressed.
6. Penalty under Section 11AC and Rule 173Q.
7. Interest computation under Section 11AB.

Undervaluation of C2O3:
The duty demand was confirmed due to undervaluation of C2O3 by the assessee, as Ministry of Petroleum re-fixed prices, necessitating re-determination of assessable value. The appellant did not dispute selling products at Rs. 3,300/- P.M.T., but the delay in discharging duty at revised prices was attributed to late receipt of re-fixation decision. The appellant emphasized lack of mala fides or intention to evade duty, arguing against penalty under Section 11AC and interest under Section 11AB.

Levy of Penalty, Interest, and Duty:
The Department relied on the order-in-original to support penalty, interest, and duty imposition. The Commissioner upheld the demand of duty on certain notices, imposing penalties under various rules and Sections, including Section 11AC. However, the Commissioner refrained from ordering confiscation under Rule 173Q(2) but ordered interest payment.

Show Cause Notices and Adjudication:
Several show cause notices were issued for different periods, with varying amounts totaling significant sums. The Commissioner adjudicated the notices, confirming duty demands on some notices while dropping a substantial demand from one notice. Penalties were imposed under Section 11AC and Rule 173Q for non-compliance and failure to determine correct duty payable.

Liability of Duty and Penalty Imposition:
As the issue of duty liability was not contested, no specific findings were made regarding the duty payment. The Commissioner's decision on penalty under Section 11AC was challenged, arguing that there was no deliberate attempt to short pay duty, as the appellant paid duties based on prices fixed by the Ministry of Petroleum and made efforts to revise prices with the Ministry.

Interest Computation:
Regarding interest computation under Section 11AB, the liability to pay interest starts from the month following the duty payment due date, with no retrospective effect. The interest calculation should adhere to legal provisions.

Conclusion:
The appeal challenging penalties under Section 11AC and Rule 173Q was allowed, with the Tribunal setting aside the penalties. The judgment emphasized the lack of intentional evasion and the appellant's compliance with Ministry-fixed prices. Interest computation was to be done in accordance with Section 11AB provisions.