2000 (8) TMI 205 - AT - Central Excise

Summary

Issues:
1. Allegation of evasion of Central Excise duty by manufacturing machinery at site.
2. Jurisdiction of Commissioner of Central Excise, Indore.
3. Inclusion of value of bought-out item in assessable value for duty calculation.
4. Applicability of extended period for demand of duty.
5. Modvat credit eligibility.
6. Concessional duty rate eligibility under Notification No. 175/86.

Issue 1: Allegation of Evasion of Central Excise Duty:
The appellants were accused of assembling machinery at the site, resulting in the emergence of a new excisable commodity. The Central Excise authorities alleged that duty evasion of Rs. 69,300 occurred. The Commissioner confirmed duty of Rs. 63,900 on the appellants and imposed a penalty of Rs. 6,000. The appellants contended that the machinery was assembled, disassembled, and cleared in parts from their factory to the buyer's premises for installation. The Tribunal found that the bought-out item, a weigh bridge, was an integral part of the machinery, necessitating duty payment on the full intrinsic value, including the weigh bridge. The appellants were found to have violated duty payment provisions, leading to the invocation of the extended period for duty demand and imposition of a penalty.

Issue 2: Jurisdiction of Commissioner of Central Excise, Indore:
The appellants challenged the jurisdiction of the Commissioner of Central Excise, Indore, arguing that their factory was in Ghaziabad. However, since the machinery was finally assembled at the buyer's premises within the jurisdiction of the Commissioner, the Tribunal found no jurisdictional issue. The Tribunal clarified that if duty had been discharged on the dismantled machinery cleared from the factory, no additional duty was payable on the assembled machinery at the site.

Issue 3: Inclusion of Value of Bought-Out Item in Assessable Value:
The Tribunal determined that the bought-out weigh bridge was an integral part of the machinery, necessitating duty payment on the full intrinsic value. Failure to include the value of the bought-out item for duty payment was deemed a violation of duty payment provisions, leading to the invocation of the extended period for duty demand and imposition of a penalty.

Issue 4: Applicability of Extended Period for Demand of Duty:
The Tribunal invoked the extended period for duty demand due to the appellants' failure to pay duty on the full intrinsic value of the machinery, including the bought-out item. This failure was considered a deliberate attempt to evade duty payment, justifying the imposition of the extended period and a penalty.

Issue 5: Modvat Credit Eligibility:
The Tribunal did not entertain the appellants' plea regarding Modvat credit as it was not included in the written appeal memorandum. However, the Tribunal allowed abatement of duty already paid on the machinery.

Issue 6: Concessional Duty Rate Eligibility under Notification No. 175/86:
The appellants claimed eligibility for concessional duty rates under Notification No. 175/86 but failed to provide evidence that they had not exceeded the prescribed ceiling limit. The Commissioner's finding that the appellants did not establish eligibility for concessional rates was upheld, rejecting the appellants' contention in this regard.

In conclusion, the appeal partially succeeded, reducing the duty amount and penalty while upholding the remaining duty amount and penalty.