2002 (2) TMI 234 - AT - Central Excise

Summary

Issues:
- Duty demand confirmation
- Penalty imposition under Section 11AC and Rule 173Q
- Allegation of suppression of facts
- Invocation of larger period for duty recovery

Duty Demand Confirmation:
The appeal was filed against the Commissioner (Appeals) order confirming a duty demand of Rs. 2,78,768/- along with penalties under Section 11AC and Rule 173Q. The case involved manufacturers of industrial boilers and other products who were alleged to have not included the cost of materials supplied free of cost by their customers. The department also noted excess transportation charges realized by the appellants. The show cause notice was issued for these demands, which the appellants resisted, arguing that the demand was time-barred and that they had not suppressed any facts. They contended that all relevant details were disclosed to the department through invoices and other documents, showing no intention to suppress facts. The Commissioner (Appeals) upheld the duty demand by invoking a larger period and imposing penalties based on alleged suppression of facts.

Penalty Imposition under Section 11AC and Rule 173Q:
The appellants, in their grounds of appeal, reiterated that they had provided all necessary details to the Range Superintendent, including copies of purchase orders containing information about free supplies. They argued that since the Revenue had all the relevant facts, a show cause notice should have been issued within the normal time limit. They maintained that they had deposited the necessary amount in the Personal Ledger Account (PLA) based on their estimation worksheets and statements. They sought to set aside the order on the grounds that there was no suppression of facts to evade duty, as all essential information was disclosed through invoices and other submissions.

Allegation of Suppression of Facts:
The key contention revolved around the allegation of suppression of facts by the appellants. While the Commissioner (Appeals) found that the invoices contained all necessary details and that the appellants had provided additional documents upon request, the Superintendent's letter remained unanswered, leading to the conclusion of suppression of facts. However, the Tribunal noted that the facts in question were already known to the department based on the documents supplied by the appellants in 1996. The Tribunal emphasized that the subsequent investigation did not uncover any new information but relied on existing records. It was established that there was no intention to withhold information to evade duty, as the details were disclosed in invoices and other submissions. Therefore, the plea that the demands were time-barred due to suppression of facts was accepted, leading to the setting aside of the impugned order and allowing the appeal.

Invocation of Larger Period for Duty Recovery:
The Tribunal's decision to set aside the duty demand confirmation and penalties was primarily based on the finding that there was no suppression of facts warranting the invocation of a larger period for duty recovery. The Tribunal highlighted that the department had access to all relevant information since 1996, and the subsequent investigation did not reveal any new details that were intentionally withheld. As a result, the appeal was allowed, emphasizing that the demands were indeed time-barred, and there was no basis for invoking a larger period for duty recovery.