2013 (7) TMI 603 - AT - Central Excise

Price inclusive of excise duty Held that - Facts of this case is more similar to the facts of the case of CCE Vs. Maruti Udyog Ltd. 2002 (2) TMI 101 - Supreme Court decided by Hon ble Apex Court - Impugned invoices should be treated as cum-duty price and taxable value arrived at accordingly. Quantum of Penalty under Section 11 AC of Central Excise Act, 1944 Held that - Relying upon the Apex court decision in the case of UOI Vs. Dharamendra Textile Processors 2008 (9) TMI 52 - SUPREME COURT that if there is finding that penalty under section 11AC is to be imposed in any case, then such penalty should be equal to the amount of duty evaded Therefore, Penalty imposed by the Commissioner (Appeal) under 11AC be increased to Rs. Rs.27,976/- 25% of penalty under section 11AC if paid within 30 days of receipt of the order Held that - Option to pay 25% of duty confirmed as penalty along with other dues within 30 days of the communication of the adjudication order for final closure of the matter was not brought to the notice of the respondent by adjudicating authority Therefore, the option to pay 25% within 30 days from the date of this order is given now.

Summary

Issues:
- Duty demand on manufacturing and clearance of computers
- Imposition of penalties under Central Excise Act, 1944
- Appeal filed by Revenue against Commissioner (Appeal) order
- Consideration of cum-duty price for assessable value
- Penalty under section 11AC of Central Excise Act

Duty Demand on Manufacturing and Clearance of Computers:
The case involved a respondent engaged in manufacturing and maintenance of computers. The Revenue found that the respondent had manufactured and cleared computers during a specific period when the exemption for small-scale units did not apply to computers. Consequently, a Show Cause Notice was issued proposing a duty demand of Rs. 43,902 along with interest and penalties. Upon adjudication, a demand for duty amounting to Rs. 43,902 was confirmed under section 11A of the Central Excise Act, 1944, along with interest and penalties.

Imposition of Penalties under Central Excise Act, 1944:
The respondent filed an appeal with the Commissioner (Appeal) challenging the duty demand and penalties imposed. The Commissioner (Appeal) made several findings, including the non-maintainability of a specific invoice and the treatment of invoice prices for other items as cum-duty prices. Ultimately, the Commissioner (Appeal) upheld a reduced duty demand of Rs. 27,976, along with reduced penalties under section 11AC and Rule 25 of the Central Excise (No.2) Rules, 2001.

Appeal Filed by Revenue Against Commissioner (Appeal) Order:
The Revenue filed an appeal against the Commissioner (Appeal) order, contesting the treatment of cum-duty prices for assessable value calculation and the quantum of penalties imposed. The Revenue argued that the duty demand should have been higher based on the Apex Court's decision in a specific case and that the penalty under section 11AC should be equal to the duty sought to be evaded, citing another court decision.

Consideration of Cum-Duty Price for Assessable Value:
The appellate tribunal analyzed the Revenue's arguments and compared the facts of the case to relevant court decisions. It determined that the facts aligned more closely with a particular case involving Maruti Udyog Ltd., rather than the case cited by the Revenue. Consequently, the tribunal upheld the Commissioner (Appeal)'s decision regarding the treatment of cum-duty prices for calculating the assessable value.

Penalty under Section 11AC of Central Excise Act:
Regarding the penalty under section 11AC, the tribunal referred to a decision by the Hon'ble Apex Court, establishing that the penalty should be equal to the amount of duty evaded. As a result, the tribunal increased the penalty imposed by the Commissioner (Appeal) under section 11AC to Rs. 27,976. The tribunal also highlighted that there was no appeal regarding the penalty imposed under Rule 25, and thus, that matter was not considered in the appeal.

Final Decision:
The appeal filed by the Revenue was partially allowed, increasing the penalty under section 11AC to Rs. 27,976. However, the tribunal noted that the respondent had not been informed by the adjudicating authority about the provision allowing the payment of 25% of the confirmed duty as penalty within 30 days for final closure of the matter. Therefore, the tribunal provided the respondent with an opportunity to pay the dues and penalty within 30 days to avoid the re-imposed penalty under section 11AC.

This comprehensive analysis of the legal judgment outlines the issues, the arguments presented, the tribunal's considerations, and the final decision rendered by the appellate tribunal in the case.