2009 (5) TMI 711 - AT - Central Excise

Summary

Issues involved: Appeal against demand, penalty, and interest u/s Valuation Rules and Central Excise Act.

Summary:

Issue 1: Demand, Penalty, and Interest under Valuation Rules
The Revenue appealed against the order setting aside the demand, penalty, and interest. The contention was that the respondents were not paying duty as per Rule 8 of the Central Excise Valuation Rules for goods cleared to their other factory for captive consumption. The respondents argued that duty had been paid as per Rule 8 @ 115% of the cost of production, albeit late. They accepted liability for interest u/s 11AB for late payment but contended that penalty u/s 11AC was not applicable due to no suppression of facts and issuance of the show-cause notice within the limitation period.

Issue 2: Liability to Pay Duty and Interest
The Tribunal found the respondents liable to pay duty as per Rule 8 of the Valuation Rules and interest u/s 11AB for late payment, which was admitted by the respondents. However, since there was no suppression of facts and the demand was within the limitation period, the penalty u/s 11AC was set aside. The impugned order was modified accordingly, and the appeal was partly allowed.

Conclusion:
The Tribunal upheld the duty payment as per Valuation Rules and the liability for interest on late payment, while setting aside the penalty due to the absence of suppression of facts and the demand being within the limitation period.