2001 (8) TMI 154 - AT - Central Excise

Summary

Issues:
1. Allegation of wilful suppression of facts leading to duty evasion under Section 11A(1) of the Central Excises Act.
2. Interpretation of the compensation amount paid by TVS to the assessee and its relation to assessable value or price of goods manufactured.

Analysis:

Issue 1:
The Revenue appealed against the Order-in-Original dropping demands raised in a show cause notice regarding wilful suppression of facts and duty evasion. The allegation was that the assessee had suppressed receipt of extra money consideration of Rs. 29.20 lacs, leading to duty evasion under Central Excise Rules. The assessee produced a MOU with TVS, stating the compensation was for loss due to TVS setting up their own unit, not related to goods invoiced, and paid in lump sum. The Tribunal cited precedents, highlighting that compensation for non-performance is not price for goods, and the payment by TVS to the assessee was compensation for loss, not additional consideration on goods supplied. As no material information was suppressed, the proviso to Section 11A(1) was not applicable.

Issue 2:
The Revenue contended that the amounts paid were for tooling charges, related to manufacturing items as alleged in the show cause notice. However, upon review of the records, the Tribunal found that the Commissioner correctly determined the payment as compensation unrelated to assessable value or price of goods. Citing judgments, including Indian Oxygen Ltd. v. Commissioner of Central Excise, the Tribunal upheld the Commissioner's decision, emphasizing the lack of evidence presented by the Revenue to challenge the findings. The Tribunal concluded that the appeal lacked merit and upheld the Commissioner's decision, rejecting the Revenue's appeal.

In conclusion, the Tribunal upheld the Commissioner's decision, ruling in favor of the assessee based on the interpretation of the compensation amount paid by TVS and the lack of evidence supporting the Revenue's allegations of duty evasion through wilful suppression of facts.