2007 (1) TMI 348 - AT - Central Excise

Summary

Issues Involved: Challenge to order confirming excise duty demand, penalty, and interest imposition based on alleged suppression of facts and confusion regarding valuation under Section 4A.

Excise Duty Demand and Penalty:
The appellant, engaged in manufacturing telephone instruments, faced allegations of wilfully suppressing facts by clearing instruments to DOT/MTNL on MRP basis to evade duty payment. The Revenue claimed duty amounting to Rs. 1,18,39,818/- u/s Notification No. 9/2000-CX. The appellant contended transparency by informing the department about doubts on Section 4A application. The Commissioner invoked the extended period, holding the appellant tried to evade duty, despite clarity in Section 4A. The appellant maintained they paid duty based on Section 4A for contract orders but were demanded duty under Section 4 for bulk sales, leading to sustained demand u/s Section 4.

Valuation and Suppression Allegations:
The appellant's communication clarified sales to DOT/MTNL were not retail, hence no MRP was involved. They followed valuation under Section 4, not Section 4A, for these transactions. The Commissioner inferred suppression from the non-mention of this communication in the reply to the show cause notice, alleging the appellant created confusion to evade duty. However, the Tribunal found no suppression of material facts, as the appellant had sought confirmation from the department on the correct valuation method. The confusion allegation was deemed vague, especially considering the Law Ministry's opinion acceptance by the Ministry of Finance. Consequently, the extended period of limitation was held invalid, and the order confirming duty demand, penalty, and interest was set aside, allowing the appeal.

*(Dictated and pronounced in the open Court on 24-1-2007)*