2007 (9) TMI 157 - AT - Central Excise

Appellant job worker declared the price on basis of price declared to him by the merchant / traders Bonafide belief that price was correct Such error cannot be alleged as suppression of facts No evidence produced by dept. to prove collusion of appellant with trader Extended time not invocable

Summary

Issues:
1. Confirmation of demand and imposition of penalties on the appellant company and its partner.
2. Reduction of penalties imposed on other assessees in the case.
3. Liability of job workers to pay duty on correct valuation of grey fabric declared by traders/merchants.
4. Invocation of extended period for confirmation of demand against job workers.
5. Collusion of job workers with traders/merchants for misdeclaration of price.
6. Reduction of penalties imposed on other noticees.

Analysis:

Issue 1:
The appeals were filed against the order confirming demand and imposing penalties on the appellant company and its partner. The Central Excise officers noticed discrepancies in the value of grey fabrics declared by the appellants compared to the value in the purchase bills of traders/merchants. The adjudicating authority upheld the demand and penalties under Section 11AC of the Central Excise Act, 1944.

Issue 2:
The appeals by the revenue sought to challenge the order that set aside penalties on the appellant company and its partner while reducing penalties on other assessees. All appeals arose from the same order-in-appeal and were disposed of together.

Issue 3:
The job workers, including the appellant company, were found liable to pay duty based on the correct valuation of grey fabric declared by traders/merchants. The Larger Bench decision in the case of Bhilwara Processors established that job workers cannot escape duty liability based on the traders' declarations.

Issue 4:
The appellants argued against the invocation of an extended period for confirming demand, citing previous judgments that restricted the use of extended periods for recovery of duty from job workers for wrong valuation declarations.

Issue 5:
The revenue alleged collusion between the appellants and traders/merchants for misdeclaration of prices. However, the tribunal found no evidence to support these claims and upheld the appellants' contention of acting in good faith based on the declarations provided by traders/merchants.

Issue 6:
Regarding the reduction of penalties imposed on other noticees, the tribunal upheld the decision of the Ld. Commissioner (Appeals) based on the lack of evidence presented by the revenue to support their claims of misdeclaration or collusion.

In conclusion, the tribunal allowed the appeals filed by the assessee, finding in favor of the appellant company and its partner, while dismissing the appeals filed by the revenue. The decision highlighted the importance of correct valuation declarations by job workers and the limitations on invoking extended periods for duty recovery without evidence of collusion or misdeclaration.