1987 (3) TMI 124 - HC - Central Excise

Summary

Issues:
1. Whether the Customs Excise and Gold (Control) Tribunal was right in sustaining the penalty imposed on the petitioner.
2. Challenge to the Tribunal's order imposing excise duty and penalty.
3. Allegations of misstatement and suppression of facts by the petitioner.
4. Application of Section 11A of the Central Excises and Salt Act, 1944 to the case.
5. Imposition of redemption fine by the respondent.

Detailed Analysis:
1. The writ petition filed by M/s. Hind Cement Products Limited challenges the Customs Excise and Gold (Control) Tribunal's decision to uphold a penalty of Rs. 65,817.63 imposed on the petitioner. The petitioner is engaged in manufacturing asbestos cement pipes, and the company owns the petitioner unit, which manufactures P.C.C. poles. The dispute arose when the department claimed that the aggregate value of goods manufactured by both entities exceeded the exemption limit of Rs. 20 lakhs, leading to the imposition of excise duty and penalty.

2. The petitioner argued that it had complied with exemption notifications and had not willfully misstated any facts. The Tribunal upheld the penalty based on the belief that the petitioner had evaded duty by not disclosing true facts. However, the petitioner contended that it had followed all necessary procedures and that the department was aware of the ownership structure and the goods being manufactured. The Tribunal's conclusion of misstatement and suppression of facts was deemed incorrect by the petitioner.

3. The legal argument centered around the application of Section 11A of the Central Excises and Salt Act, 1944, which allows for the extension of the limitation period for demanding duty and penalty in cases of fraud or willful misstatement. The petitioner maintained that no misstatement or suppression of facts occurred, and therefore, the penalty imposed beyond the standard six-month period was unwarranted.

4. The judgment ultimately partly allowed the petition, upholding the excise duty imposed but quashing the penalty of equal amount. The court agreed with the petitioner's stance that no penalty was exigible beyond the standard six-month period under Section 11A. The issue of the redemption fine imposed by the respondent was not considered by the Tribunal, leaving room for further legal action by the petitioner.

5. In conclusion, the court's decision was based on the lack of evidence supporting the allegations of misstatement and suppression of facts by the petitioner, leading to the quashing of the penalty imposed beyond the statutory limitation period. The judgment highlighted the importance of factual accuracy and compliance with exemption notifications in excise duty matters.