2003 (1) TMI 736 - AT - Central Excise

Summary

Issues:
1. Inclusion of the value of Plastic Caps in the assessable value of Tubes.
2. Applicability of the extended period for raising duty demand.
3. Imposition of penalty and interest under Central Excise Rules.

Analysis:

1. Inclusion of Plastic Caps in Assessable Value:
The main issue in this case was whether the value of Plastic Caps should be included in the assessable value of Tubes manufactured and cleared by the appellants. The Adjudicating Commissioner held that the value of caps is includible, citing suppression of facts with intent to evade duty. The appellants argued that they also sell tubes without caps, and in cases where caps were fitted by M/s. Colgate, the caps were supplied by them. The Tribunal referred to various case laws and concluded that if plastic caps are fitted to the tubes before removal from the factory, duty is payable on the total value of the tubes inclusive of the value of caps.

2. Applicability of Extended Period:
Regarding the question of limitation, it was found that the appellants did not disclose to the proper officer that the value of caps was not included in the assessable value of tubes. Consequently, the Tribunal upheld the Adjudicating Commissioner's decision to apply the extended time limit for demanding duty.

3. Penalty and Interest Imposition:
The Tribunal acknowledged that there was no mala fide intention on the part of the appellants and that the duty paid was taken as modvat credit by the buyers. Consequently, the penalty imposed by the Adjudicating Commissioner was reduced from &8377; 41 Lakhs to &8377; 5 Lakhs. Additionally, the Tribunal clarified that interest under Section 11AB could only be invoked for clearances after 28.9.1996, and since the clearances in this case occurred between March 1990 and September 1994, no interest could be charged under Section 11AB.

In conclusion, the Tribunal dismissed the appeals except for the modification in penalty and interest amounts, as indicated in the judgment.