2015 (10) TMI 105 - AT - Central Excise

Variation in value of goods - goods which they had sold from the depot at a value higher than the value on which they have paid the duty - SSI Exemption - Invocation of extended period of limitation - Notification No. 9/99-CE dated 28.2.1999, 9/2000-CE dated 1.3.2000 and 9/2001-CE dated 1.3.2001 - Held that - Assessees contention that extended period cannot be invoked has merit as the appellant-assessee was submitting the returns. They were also submitting the price declaration at the relevant time. Further, every month they were computing the differential duty on the value of the goods which they had sold from the depot at a value higher than the value on which they have paid the duty. They were also informing the details to the range Superintendent every month. We also note that the appellant-assessee was not even claiming the refund of duty in cases where they had sold the goods at a lower price. Invoking the extended period or imposition of penalty under Section 11AC is not correct. However, we note that the learned counsel for the appellant-assessee has submitted that they are not disputing the duty determined by the Commissioner (Appeals) which they have already paid. - as per definition of place of removal under Section 4 of the Central Excise Act, it was factory gate in the facts of present case. - Decided in favour of assessee.

Summary

Issues:
1. Invocation of extended period of limitation for demanding differential duty.
2. Imposition of penalty under Section 11AC.
3. Determination of place of removal and duty calculation.

Analysis:

Issue 1: Invocation of extended period of limitation
The case involved the appellant-assessee availing SSI Exemption Notifications but selling goods from their depot at values different from factory gate prices. The dispute spanned from April 1999 to March 2003, with a show cause notice issued in 2004. The appellant-assessee regularly computed and paid the differential duty on goods sold at higher values, informing the department monthly. The Tribunal found merit in the appellant's contention that the extended period cannot be invoked due to timely submissions and cooperation with authorities. The Tribunal noted the appellant's compliance with price declarations and non-refund claims for goods sold at lower prices, leading to the dismissal of the extended period of limitation.

Issue 2: Imposition of penalty under Section 11AC
The appellant contested the penalty imposed under Section 11AC, arguing that they consistently calculated and paid the differential duty without objection from the department. The appellant's submission highlighted their proactive approach in informing the authorities monthly about duty differentials. The Tribunal agreed with the appellant, deeming the penalty imposition unjustified given the appellant's compliance and the department's awareness of the situation. Consequently, the Tribunal found the penalty under Section 11AC unsustainable and ruled in favor of the appellant.

Issue 3: Determination of place of removal and duty calculation
The Revenue raised concerns regarding the determination of the place of removal and subsequent duty calculation. The Commissioner (Appeals) had extended the benefit of cum-duty price to the appellant, reducing the differential duty amount significantly. The Tribunal observed that the definition of place of removal under the Central Excise Act indicated the factory gate in this case. Considering the facts presented and the appellant's compliance with duty payments, the Tribunal dismissed the Revenue's appeal and upheld the Commissioner (Appeals)'s decision to grant the benefit of cum-duty price to the appellant. The Tribunal allowed the appeal of the assessee based on the presented analysis and factual considerations.