2000 (9) TMI 98 - AT - Central Excise

Summary

Issues Involved:
1. Valuation of excisable goods.
2. Invocation of Section 14A of the Central Excise Act.
3. Invocation of Rule 7 of the Central Excise Valuation Rules.
4. Overlapping show cause notices by different authorities.
5. Applicability of Sections 11AB and 11AC of the Central Excise Act.
6. Imposition of penalties under Rule 209A of the Central Excise Rules.

Detailed Analysis:

1. Valuation of Excisable Goods:
The appellants manufactured unprinted soft drink bottles at their Pimpri unit and transferred them to another unit for printing. They filed price lists for these bottles, which were provisionally approved. The Assistant Commissioner later confirmed these prices, stating that the goods produced at different units were not comparable. No appeal was filed against this order. The Tribunal noted that the valuation of goods was known to the department when the price lists were filed, and the prices were deliberated upon before provisional approval. The Tribunal found that the prices of comparable goods were available and should be used for valuation, citing the case of CCE v. Mohan Crystal Glass Works.

2. Invocation of Section 14A of the Central Excise Act:
The appellants argued that the proceedings under Section 14A were unwarranted as the price lists were provisionally approved and later confirmed by the Assistant Commissioner. The Tribunal agreed, noting that no appeal was filed against the Assistant Commissioner's order dropping the revision of the price lists. Therefore, the initiation of proceedings under Section 14A was not justified.

3. Invocation of Rule 7 of the Central Excise Valuation Rules:
The Commissioner invoked Rule 7 of the Valuation Rules after dropping proceedings under Section 14A. The Tribunal found this invocation unwarranted, as the price lists for similar goods sold in the wholesale market were available. The Tribunal emphasized that Rule 4 should be applied, which mandates using the value of goods sold at the nearest time to the removal of goods under assessment. The Tribunal concluded that Rule 7 could not be invoked when the prices of comparable goods were available.

4. Overlapping Show Cause Notices by Different Authorities:
The Commissioner issued a show cause notice overlapping with one issued by the Assistant Commissioner. The Commissioner stated that only the senior authority's notice should survive. The Tribunal disagreed, stating that the proper jurisdiction and authority must be respected, and an inferior authority cannot be divested of its jurisdiction unless the law explicitly states so. The Tribunal found the Commissioner's action incorrect in law.

5. Applicability of Sections 11AB and 11AC of the Central Excise Act:
The Tribunal held that Sections 11AB and 11AC, which pertain to interest and penalties, could not be applied retrospectively to periods before their enactment. This is consistent with the settled law that penal provisions cannot be applied retroactively.

6. Imposition of Penalties under Rule 209A of the Central Excise Rules:
The Tribunal found no grounds for penalties under Rule 209A, as there were no goods liable for confiscation. Consequently, the penalties imposed on the employees were set aside.

Conclusion:
The appeals were allowed, and the impugned order was set aside. The Tribunal found that the valuation should be based on available price lists of comparable goods, the invocation of Section 14A and Rule 7 was unwarranted, overlapping show cause notices were improperly handled, and penalties under Sections 11AB, 11AC, and Rule 209A were not applicable.