2006 (9) TMI 541 - AT - Central Excise

Summary

Issues: Appeal against demand of duty, penalties, and interest for stock transfer of lubricating oil in bulk to depots and subsequent sale in smaller quantities.

Analysis:
1. Demand of Duty and Imposition of Penalties:
- The appellant, a Public Sector Undertaking, appealed against an order confirming a duty demand, penalties, and interest related to the stock transfer of lubricating oil in bulk to depots at Malda and Allahabad. The issue revolved around whether the duty should be paid based on the price at which the repacked oil was sold from the depots or the price at which the bulk oils were sold at the factory. The Circular No. 251/85-96.CX was referred to for the procedure of duty payment.

2. Legal Precedents and Interpretation:
- The issue was settled by CEGAT in previous cases such as Savita Chemicals Ltd. v CCE, Castrol India Ltd. v CCE, and IBP Co. Ltd. v CCE, Kolkata. The CESTAT rejected the duty on higher prices for repacked oils sold from depots, following the decisions of the Apex Court in similar cases. The Tribunal applied the ratio laid down in the previous decisions, affirmed by the Apex Court, to determine the correct assessable value of goods cleared in bulk from the factory.

3. Time-Barred Demand and Modvat Credit:
- The Tribunal upheld the plea of the demand being time-barred for a major portion of the case. Additionally, the Modvat credit of the duty already paid was accepted. However, the revaluation of goods as suggested by the Commissioner was not considered, thus eliminating the question of the eligibility of Modvat credit.

4. Penalty and Interest:
- In the absence of any reasons to impose penalty or interest, the Tribunal found the orders related to duty demand, penalty, and interest unsustainable. Consequently, the plea to impose penalty or interest was not upheld based on the facts presented in the case.

5. Final Decision:
- Considering the findings and analysis, the Tribunal allowed the appeal and set aside the impugned order dated 23-1-2002. The judgment was dictated and pronounced in court on 8-9-2006, concluding the legal proceedings in favor of the appellant.