1981 (7) TMI 237 - Commissioner - Central Excise

Summary

Issues:
1. Contravention of Central Excise Rules regarding unaccounted Ghee Settling Tanks.
2. Non-payment of Central Excise duty on erection charges billed to customers.
3. Show cause notice for penalty imposition and confiscation of seized goods.
4. Legal arguments regarding the manufacturing status of the seized tanks.
5. Challenge against the demand of duty on erection charges.
6. Time-barred demand and submission of monthly returns.
7. Request for a personal hearing and legal arguments presented.
8. Judgment on the issues raised by the party regarding the seized goods and duty on erection charges.

Analysis:

1. The Central Excise Preventive Officers found unaccounted Ghee Settling Tanks during a surprise visit, leading to a contravention of various Central Excise Rules. The party failed to maintain records and enter fully manufactured goods in the required registers, resulting in the seizure of the tanks under the Customs Act.

2. Investigations revealed non-payment of Central Excise duty on erection charges billed to customers. A show cause notice was issued for penalty imposition and demand of duty involved. The party defended by stating their activities as consultancy, trading, and erection work, arguing against the duty levy on these transactions.

3. The show cause notice demanded a penalty, confiscation of seized goods, and Central Excise duty payment. The party responded with legal arguments challenging the basis of the demand and the legality of the charges imposed.

4. Legal arguments were presented regarding the manufacturing status of the seized tanks. The party contended that the tanks were not fully manufactured as per buyer requirements, and hence, not liable for duty until completion. The judgment analyzed the facts and ruled on the manufacturing status of the goods.

5. The party disputed the demand of duty on erection charges, claiming that no removal of goods occurred under Central Excise Rules. They argued that duty should be charged at the time of goods' removal, not during job work activities.

6. The party raised issues of time-barred demand and regular submission of returns, asserting compliance with reporting requirements. They questioned the basis of duty imposition on certain activities and transactions, citing statutory provisions and past practices.

7. A personal hearing was requested, and legal arguments were reiterated, emphasizing the non-leviability of duty on certain job work activities. The party relied on legal precedents and interpretations to support their contentions.

8. The judgment analyzed the submissions, records, and legal provisions to decide on the issues raised. It upheld the seizure of goods but dropped charges related to duty on installation and assembly work. Penalties, redemption fines, and duty amounts were imposed based on the findings and legal interpretations presented during the proceedings.