2017 (4) TMI 739 - AT - Central Excise

Misdeclaration of value (MRP) - commodity thinner - benefit of N/N. 13/2002-CE (NT) dated 1.3.2002 - Held that - In spite of repeated query as to the basis of mentioning MRP for a product for which MRP was not to be mentioned in the packages, ld. Advocate was not able to show from the record any material based on which the MRP was declared to the Department. Therefore, the findings of the lower authorities holding that there was mis-declaration on the part of the appellant is acceptable - the appellant is not eligible for the benefit as claimed in terms of Section 4A of the CEA, 1944 - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against Order-in-Appeal No.45/2009 dated 27.2.2009 regarding duty exemption under Notification No.13/2002-CE (NT) for manufacturing PSTA, Thinner & Pent Acid. Dispute over the validity of exemption claimed, mis-declaration of facts, imposition of duty, interest, and penalties.

Analysis:
The appellant appealed against the Order-in-Appeal No.45/2009, contesting the denial of a 40% duty exemption claimed under Notification No.13/2002-CE (NT) for manufacturing PSTA, Thinner & Pent Acid from June 2002 to March 2007. The Department demanded duty payment of &8377; 9,88,225/- along with interest and penalties. The appellant argued that thinner fell under a notification issued under Section 4A, as they declared clearing thinner in 210 ltr. packings with a 40% discount. The appellant claimed the extended period of limitation could not be invoked and that the duty liability should be around &8377; 8,51,000. The Department contended that the declarations were factually incorrect and misleading, aiming to evade duty.

The Tribunal noted that the appellant cleared thinner in 210 ltrs. Drum, declaring certain MRP and claiming a 40% deduction under Notification No.13/2002-CE(NT). However, it was found during an audit that no MRP was declared on the packages, rendering the valuation under Section 4A inapplicable. The Department held the declarations as misstatements of facts, invoking an extended period of limitation and demanding duty of &8377; 9,88,225 along with interest and penalties. The Commissioner (Appeals) upheld the demand and penalties but allowed reworking of duty liability using the cum duty price.

The Tribunal, after considering arguments from both sides, found the appellant's declarations to be misleading and involving misstatements of facts. It was established that the appellant was not eligible for the claimed benefit under Section 4A. The Tribunal accepted that adopting the cum duty price should result in a lower duty demand. Referring to a Supreme Court judgment, the Tribunal held that the value of thinner should be treated as the cum duty price. Consequently, the appeal was dismissed, upholding the impugned order and the reasons provided therein.

In conclusion, the Tribunal dismissed the appellant's appeal, finding no grounds to grant further relief. The decision was based on the misdeclaration of facts by the appellant, rendering them ineligible for the claimed benefit under Section 4A. The Tribunal upheld the duty demand but acknowledged the partial relief granted by the Commissioner (Appeals) regarding the calculation of the differential duty.