2002 (3) TMI 146 - AT - Central Excise

Structures - Buildings - Demand - Limitation - Adjudication - Natural Justice - Cross-examination - Penalty

Summary

Issues:
1. Classification of goods supplied to defence authorities as pre-fabricated buildings or steel structures.
2. Time-barred demand for duty payment.
3. Violation of rules of natural justice regarding cross-examination of defense authority officers.
4. Imposition of penalty by the Collector.

Classification of Goods:
The appellants argued that they supplied steel structures, not pre-fabricated buildings, to defense authorities. However, the Tribunal rejected this claim, stating that supply orders clearly specified pre-fabricated buildings. The appellants mis-described goods to avoid duty payment, supported by documentary evidence and a partner's statement. The Tribunal referenced a similar case where a comparable plea was dismissed, confirming that the goods supplied were indeed pre-fabricated buildings under the relevant tariff.

Time-Barred Demand:
The appellants contended that the demand was time-barred due to prior approval of classification lists. However, the Tribunal found evidence of deliberate mis-description of goods by the appellants, justifying the extended limitation period. Citing precedent, the Tribunal upheld the invocation of the extended period, emphasizing the appellants' suppression of material facts.

Violation of Natural Justice:
The appellants claimed a violation of natural justice as they were not allowed to cross-examine defense authority officers. The Tribunal disagreed, noting previous attempts to facilitate cross-examination. The case relied heavily on documentary evidence, with no uncross-examined witness statements used against the appellants. The Tribunal found no breach of natural justice, considering the circumstances and evidence presented.

Imposition of Penalty:
The Tribunal upheld the duty confirmation but modified the penalty. Initially, the penalty on the appellant company was Rs. 2,00,000, increased to Rs. 10,00,000 post-remand, which the Tribunal deemed impermissible. The penalty on the appellant company was reduced to Rs. 2,00,000, while penalties on other appellants remained unchanged. The appeals were dismissed, except for the penalty modification.