2003 (3) TMI 237 - AT - Central Excise

Summary

Issues involved: Duty liability on account of under-valuation, applicability of Apex Court judgment, introduction of Assistant Director's report, invoking proviso to Section 11A.

Summary:

1. The appellants, a manufacturer of aluminium products, faced duty demands due to alleged under-valuation of goods, based on outstanding advances in their balance sheet. The impugned order raised a duty liability of over Rs. 2.0 crores and imposed an equal amount as penalty, citing notional interest on advances as per the Apex Court's judgment in Metal Box India Ltd. case.

2. The appellants argued that treating credit balance as advances was incorrect, as it did not confer financial benefit, and the Commissioner's decision was illegal. They highlighted the presence of larger debit balances and disputed the relevance of the Metal Box judgment to their case, citing the VST Industries Ltd. case as more applicable.

3. The appellants objected to the introduction of the Assistant Director's report in the adjudication, alleging a violation of natural justice principles. They contended that price differences were due to variations in the goods sold, not advances.

4. The appellants further objected to the invocation of the proviso to Section 11A, arguing that the data from their annual Balance Sheets was publicly available, and there was no intent to suppress facts to evade duty payment.

5. The Tribunal found the impugned order untenable, noting flaws in the findings and procedural errors. It highlighted the failure to consider relevant factors, misapplication of the Metal Box judgment, impermissible introduction of the Assistant Director's report, and unfair allegations of suppression of facts. The appeal was allowed, setting aside the impugned order, and the Revenue's cross-objection was disposed of.