2005 (3) TMI 570 - AT - Central Excise

Summary

Issues:
1. Challenge against confirmation of demand and Central Excise duty with penalty.
2. Valuation of goods based on costing data vs. sale price.
3. Time limit for demanding Central Excise duty.
4. Adjustment of duty paid in excess against duty paid in short.
5. Refund of excess duty paid.
6. Imposition of penalty.

Analysis:

1. The appeal was filed against the confirmation of demand and Central Excise duty with a penalty. The Appellants, who manufacture pig iron on their account and on a conversion basis, argued that the valuation of goods should be based on costing data as per a specific Supreme Court case, not on the sale price to independent buyers. They challenged the quantum of duty demanded and contended that the demand of duty was beyond the time limit specified in Section 11A(1) of the Central Excise Act.

2. The Appellants, as conversion job workers for two principal manufacturers, had informed the department about their role and pricing details through various letters and declarations. They argued that the extended period of limitation for demanding duty cannot be invoked as they had disclosed relevant information to the revenue authorities. The Tribunal agreed that the Appellants had not suppressed any facts to evade duty payment and held that the extended period of limitation was not applicable.

3. Regarding the adjustment of duty paid in excess against duty paid in short, the Appellants claimed they were eligible for a refund of over Rs. 60 lakhs. However, the Tribunal upheld that the adjustment of excess duty amounts to a refund, which can only be granted if the claimant proves that the excess duty incidence was not passed on to others. As a result, the duty within the normal period of limitation was upheld, while the demand beyond the normal period was set aside.

4. The Tribunal directed the Commissioner to reconsider the imposition of any penalty on the Appellants during the recomputation of the demand, providing them with a fair opportunity for a hearing. The judgment concluded by disposing of the appeal in the mentioned terms, addressing the issues raised comprehensively and in accordance with the Central Excise Act and relevant legal principles.