2008 (10) TMI 529 - AT - Central Excise

Demand - Limitation - Extended period - Suppression - Held that - such adoption of lower value was not with intention to evade payment of duty, especially when such duty is available as credit to their own unit - When the goods were being cleared to their sister unit, who were availing credit of duty paid at the same time, it is difficult to hold that there was any intention on the part of the assessee to pay less duty, specifically when there is no other evidence on record to reflect upon such intention - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Assessable value for stock transfer lower than sales to independent buyers.
2. Initiation of proceedings against the appellant.
3. Confirmation of demand and imposition of penalty.
4. Appeal to Tribunal by both assessee and Revenue.
5. Tribunal's remand to lower authority for fresh decision.
6. Confirmation of demand in remand proceedings.
7. Appeal to Commissioner (Appeals) and setting aside of impugned order.
8. Observations on revenue neutrality and intention to evade payment of duty.
9. Reduction of penalty and rejection of Revenue's appeal.

Analysis:

1. The case involved a situation where the appellant was manufacturing Carbon Dioxide gas and clearing it to independent customers and their own unit on a stock transfer basis. The assessable value adopted for stock transfer was lower than the value for sales to independent buyers, leading to initiation of proceedings against the appellant.

2. The original adjudicating authority confirmed a demand of duty and imposed penalties under relevant sections. On appeal, the Commissioner (Appeals) upheld the demand but reduced the penalties. Both the assessee and Revenue then filed appeals before the Tribunal.

3. The assessee argued that the duty paid was available as credit to their sister unit, resulting in a revenue-neutral situation, and contested the justification for the duty confirmation. The Tribunal remanded the matter to the lower authority for a fresh decision in light of a previous decision.

4. In the subsequent remand proceedings, the demand was again confirmed by the original adjudicating authority. However, on appeal, the Commissioner (Appeals) set aside the impugned order and allowed the appeal, leading to the present appeal by the Revenue.

5. The appellate authority noted that while there was an admission of paying lesser duty for clearances to the sister unit, the situation was considered revenue neutral as the duty paid was available as credit to the appellant's own unit. The Commissioner (Appeals) found no evidence of intention to evade duty and set aside the penalty imposed.

6. The Revenue's appeal contended that the matter was remanded to consider revenue neutrality, but the Commissioner (Appeals) based the decision on limitation grounds. The Tribunal rejected the technical objection and emphasized the revenue-neutral situation due to the duty credit available to the appellant's unit.

7. The Tribunal concluded that the confirmation of demand against the respondent was not justified, considering the circumstances and lack of evidence indicating an intention to evade duty. The Revenue's appeal was rejected, affirming the decision of the Commissioner (Appeals).

This detailed analysis of the judgment highlights the issues, proceedings, and decisions made at various stages of the case, emphasizing the considerations of assessable value, revenue neutrality, intention to evade duty, and penalty imposition.