2004 (3) TMI 630 - AT - Central Excise

Summary

Issues:
1. Demand confirmation under Section 11A of the Act invoking the extended period, penalty imposition, and interest demand.
2. Dispute regarding differential price realization on the sale of S.S. patta/pattis or S.S. flats.

Analysis:
1. The appellants were served with a demand of Rs. 90,47,172/- confirmed under Section 11A of the Act, with penalty and interest imposed by the Commissioner. The issue revolved around the duty demand, penalty, and interest imposed on the appellants, which was challenged in the appeal before the Appellate Tribunal CESTAT, New Delhi.

2. The appellants manufactured stainless steel flats (SS flats) and cleared them to various customers and consignment agents. An additional consideration was realized by the appellants from one consignment agent over and above the declared price, leading to the demand confirmation. The appellants contended that the additional consideration was for stainless steel patta/pattis and not the flats. The main issue was to determine whether the excess price realization pertained to the sale of S.S. patta/pattis or S.S. flats.

3. The Tribunal analyzed the evidence presented by the appellants, including bills and cash memos, which indicated that the consignment agent had sold patta/pattis to customers and remitted the proceeds to the appellants after deducting various charges. It was observed that the excess price realization did not relate to the sale of SS flats but to the sale of S.S. patta/pattis. The Tribunal concluded that the demand and penalty were not justified as the excess payment was for patta/pattis, not SS flats. The appeal was allowed, and the Commissioner's order was set aside.

4. The Tribunal noted that the appellants had consistently maintained that the excess payment received was for the sale of patta/pattis and not SS flats. The evidence provided, including invoices and account details, supported the appellants' claim. It was established that there was no excess payment received for the sale of SS flats through the consignment agent. Therefore, the grounds for duty demand and penalty imposition were deemed invalid, leading to the allowance of the appeal and the setting aside of the Commissioner's order.