2017 (3) TMI 1743 - AT - Central Excise

Imposition of penalty - evasion of duty by manipulating assessable value - Held that - Appreciating that the respondent was in practice of paying duty on higher value and evading when there was no investigation and undervalued the goods, is liable to penalty. Accordingly it is not entitled to concession in penalty - Order of the Ld. Commissioner (Appeals) granting concession in penalty is set aside and penalty levied in adjudication is upheld - decided in favor of Revenue.

Summary

Issues:
- Appeal against order of the Commissioner (Appeals) regarding determination of assessable value and penalty imposition.

Analysis:
1. The Revenue filed an appeal against the order of the Commissioner (Appeals) due to the respondent adopting a lower assessable value for goods clearance from the factory to the consignment depot, but realizing a higher price at the depot. The Revenue argued that the assessable value should have been determined based on the price prevailing at the consignment depot, as per the codified law. It was alleged that the respondent suppressed the assessable value to evade duty payment.

2. Referring to a similar case before the Hon'ble High Court of Madras, it was noted that penalty is leviable on the duty element when there is an apparent intention of evasion and duty is intentionally withheld on the differential value. The court emphasized that penalty under Section 11AC of the Central Excise Act is a punishment for deliberate deception by the assessee to evade duty. The court highlighted the importance of the assessee's conduct and modus operandi in determining the penalty.

3. The Tribunal found the present case to be similar to the case before the Hon'ble High Court of Madras, where the respondent was paying duty on a higher value but evading duty when undervaluing goods. Consequently, the Tribunal held that the respondent was liable for a penalty and was not entitled to any concession in penalty. The Tribunal allowed the Revenue's appeal, setting aside the order of the Commissioner (Appeals) granting concession in penalty and upholding the penalty imposed in the adjudication.

4. In conclusion, the Tribunal allowed the Revenue's appeal, emphasizing the importance of determining the correct assessable value of goods and penalizing deliberate attempts to evade duty. The Tribunal's decision was based on the principles established in previous legal judgments and the provisions of the Central Excise Act.