2003 (9) TMI 782 - AT - Central Excise

Summary

Issues:
- Penalty imposed under Section 11AC of the Act based on difference in insurance charges collected and spent forming part of assessable value of goods.

Analysis:
1. Penalty Imposed under Section 11AC:
The judgment deals with an appeal against a penalty imposed under Section 11AC of the Act by the Commissioner. The appellant, although absent and unrepresented, requested the disposal of the appeal on the basis of written submissions. The notice issued demanded duty payment due to the difference between insurance charges collected and actually spent, proposing a penalty as well. The Commissioner confirmed the proposal in the notice, leading to the appeal before the Tribunal.

2. Assessable Value of Goods:
The appellant argued that the amount collected as insurance charges but not utilized should not form part of the assessable value of the goods. Citing the judgment of the Supreme Court in Baroda Electric Meter Co. vs. CCE, the appellant contended that as per the said judgment, such unutilized amounts cannot be included in the value of goods for taxation purposes. The appellant specifically focused the appeal on the penalty aspect, not disputing the duty demand itself.

3. Application of Supreme Court Judgment:
The Tribunal, per the judgment, applied the ratio of the Supreme Court's decision and concluded that the insurance charges collected but not utilized cannot be considered in the value of the goods. Therefore, the penalty imposed under Section 11AC was deemed not applicable in this case. Consequently, the appeal was allowed, and the impugned order imposing the penalty was set aside.

In summary, the Tribunal allowed the appeal, setting aside the penalty imposed under Section 11AC based on the difference between insurance charges collected and spent forming part of the assessable value of goods. The decision was primarily guided by the interpretation of the Supreme Court judgment, emphasizing that unutilized amounts should not be included in the value of goods for taxation purposes, thereby leading to the reversal of the penalty imposition.