2007 (4) TMI 491 - AT - Central Excise

Summary

Issues:
1. Misdescription of goods leading to duty evasion.
2. Time-barred demand and invocation of extended period.
3. Imposition of penalty on the partner.
4. Confiscation of assets under Rule 173Q.

Analysis:
1. The case involved the appellants misdescribing certain articles as "M.S. Plates (Rectangular)" to avoid sales tax, leading to duty evasion. The department demanded duty for the years 1996-97 to 1997-98, amounting to Rs. 90,416, based on an estimated 35% of total sales being related to these misdescribed items. The Commissioner confirmed the duty, imposed penalties, and allowed for the redemption of assets under Rule 173Q(2).

2. The appellants argued that the demand was time-barred as they had disclosed the manufacture and clearance of profiles in their declarations. They disputed the quantum of duty, stating that the department failed to prove their clearances exceeded the exemption limit. The tribunal found that the extended period was rightly invoked due to the non-disclosure of the misdescribed items, upholding the duty demand with interest.

3. Regarding the penalty imposed on the partner, it was contended that he was not directly involved in the business activities. However, since he admitted to the clandestine clearance of profiles, the tribunal reduced the penalty on the appellants and the partner from Rs. 25,000 to Rs. 10,000 each. The confiscation of assets was set aside as the duty amount was less than Rs. 1 lakh and there was no evidence of repeated offenses.

4. In conclusion, the tribunal allowed the appeals, reducing the penalties and setting aside the confiscation of assets. The misdescription of goods for duty evasion purposes was established, leading to the upheld duty demand. The time-barred argument was dismissed, and penalties were reduced based on involvement in the clandestine activities.