2018 (1) TMI 251 - AT - Central Excise

Valuation - electric poles - price variation clause - value of clearances exceeding ₹ 30 lakhs - Held that - It is seen that the electric poles found in the factory of the appellants were found to be tallying with the internal records. In these circumstances, seizure and confiscation of the same cannot be justified especially because appellants had applied for registration prior to the said date - confiscation and redemption fine set aside. Penalty u/r 173Q - Held that - penalty under Rule 173Q for the period upto 28.09.1996 is set aside - penalty equivalent to the amount evaded from 28.09.1996 onwards is upheld under Section 11AC - the option to pay 25% duty is hereby extended to the appellants, subject to the conditions of the section. Appeal allowed in part.

Summary

Issues:
Confirmation of demand of interest, imposition of penalty, and confiscation of goods.

Analysis:

1. Confirmation of Demand of Interest:
The appellant, engaged in manufacturing and supplying electric poles, availed SSI exemption but exceeded the clearance value limit triggering a demand for registration. The revenue confirmed demands of duty for the period in question. The Commissioner (Appeals) modified the original order, setting aside interest under Section 11AB for the period up to a certain date. The Tribunal reviewed the arguments and upheld the modification, setting aside interest for the specified period.

2. Imposition of Penalty:
The appellant contested the imposition of penalties under Rule 173Q and Section 11AC, citing lack of specificity in the show-cause notice and the applicability of penalties pre and post the enforcement of Section 11AC. The Tribunal referred to relevant case law and found in favor of the appellant, setting aside the penalty under Rule 173Q but upholding the penalty under Section 11AC from a certain date. The Tribunal also extended the option to pay a reduced penalty based on a High Court decision.

3. Confiscation of Goods:
The appellant's electric poles, though matching official records, were seized during a revenue visit. The Tribunal noted that the appellant had applied for registration before the visit, leading to the conclusion that the confiscation and redemption fine were unjustified. As a result, the confiscation and fine were set aside, allowing the appellant's appeal in part.

In conclusion, the Tribunal partially allowed the appeal, setting aside interest for a specific period, modifying penalties, extending a reduced penalty option, and overturning the confiscation of goods based on the circumstances surrounding the case.