2016 (8) TMI 437 - AT - Central Excise

Imposition of penalty - Rule 173(Q) of the Central Excise Rules, 1944 - Held that - imposition of penalty on the assessee is not correct and is against the Final Order dated 20.7.2005 passed by this Tribunal. Therefore, the penalty of ₹ 1,00,000/- imposed under Rule 173(Q) deserves to be set aside. Reworking/re-quantification of duty - Period of limitation - re-examining the aspect pertaining to availment of Modvat credit - Held that - the Commissioner in the impugned order has held that Modvat credit of ₹ 1,96,083/- is admissible with which we agree. When there has been no suppression of facts on the part of the manufacturer the matter is remanded back to the Commissioner of Central Excise, Belgaum to decide the same within next four months after seeking a report on the subject matter from the Assistant Commissioner of Central excise in-charge of the assessee unit.

Summary

Issues:
Inclusion of pattern development charges in assessable value of castings, time-barred demands, penalty imposition, admissibility of Modvat credit.

Inclusion of Pattern Development Charges:
The case involved the inclusion of pattern development charges in the assessable value of castings manufactured by the appellant. The Commissioner of Central Excise issued a show-cause notice in 2000, which was adjudicated in 2002. The CESTAT, in 2005, set aside penalty and interest, remanding the case for reworking the duty. The Commissioner's 2007 order directed the appellant to amortize pattern charges and include them in casting value, based on an advance deposit. The Revenue appealed against this order.

Time-Barred Demands and Penalty Imposition:
The appellant argued that demands were time-barred as per CESTAT's 2005 direction. The Commissioner's 2007 order extended beyond the specified period, imposing a penalty against the Tribunal's direction, leading to a discrepancy. The Tribunal found the Commissioner's failure to rework the duty demand as directed, set aside the penalty imposed, and remanded the matter back to the Commissioner for re-quantification within four months.

Admissibility of Modvat Credit:
The Commissioner's order also addressed the admissibility of Modvat credit, which the Tribunal agreed with. The Tribunal remanded the matter back to the Commissioner to decide the reworking of duty within four months, seeking a report from the Assistant Commissioner and directing the appellant to submit necessary documents promptly.

Conclusion:
The Tribunal decided to remand both appeals to the Commissioner of Central Excise, Belgaum, for further consideration based on the directions provided. The penalty imposed was set aside, and the matter of reworking duty, without suppression of facts, was to be resolved within the specified timeframe. The admissibility of Modvat credit was affirmed, ensuring a comprehensive review of the issues involved in the case.