2005 (3) TMI 642 - AT - Central Excise

Summary

Issues:
Clearance of castings and cast articles of iron without payment of duty. Allegation of manufacturing and clearing machined castings of iron. Claim of exemption under Notifications. Time-bar defense. Penalty under Rule 9(2) and Rule 173Q.

Analysis:

Clearance without Payment of Duty:
The appellants were engaged in manufacturing castings and cast articles of iron for various machinery parts without paying duty from 1-3-1988 to 3-11-1988. The department issued a show cause notice demanding duty and imposing a penalty under Rule 173Q due to non-compliance with central excise formalities.

Claim of Exemption and Machined Castings:
The appellants claimed exemption under Notifications for unmachined castings of machinery parts. However, the adjudicating authority found that the appellants were clearing machined castings of iron without paying duty. The appellants failed to provide evidence that their products were unmachined castings, leading to the rejection of their claim.

Time-Bar Defense:
The appellants contended that there was no suppression of facts and raised a time-bar defense. However, the tribunal rejected this defense, citing the appellants' failure to prove that they were manufacturing only unmachined castings and their inability to produce a classification list for the disputed period.

Penalty Imposition:
Due to the clearance of dutiable goods without payment of duty, a penalty under Rule 9(2) and Rule 173Q was upheld. The tribunal considered the imposed penalty of Rs. 3,000/- as reasonable based on the findings of the lower authority.

Conclusion:
The tribunal rejected the appeal, confirming the demand for duty on the clearance of iron castings and upholding the penalty. The findings emphasized the appellants' failure to prove their claim of manufacturing only unmachined castings, leading to the dismissal of their exemption plea and time-bar defense. The penalty was deemed justified for the clearance of dutiable goods without payment of duty.