2004 (8) TMI 205 - AT - Central Excise

Summary

Issues: Validity of the impugned order-in-appeal setting aside duty demand and penalty as time-barred.

Analysis:
1. The appellants were engaged in manufacturing Pulsator and received the item "Bush" from a supplier under Rule 57F(4) challans, which they inserted into their product without including its value in the assessable value of Pulsator.
2. The duty demand and penalty were confirmed against the appellants by the adjudicating authority for not including the value of the bush in the assessable value of Pulsator.
3. The Commissioner (Appeals) affirmed the findings of the adjudicating authority, stating that the value of the bush, being an integral part of the product Pulsator, needed to be included in the assessable value as per the law.
4. The Commissioner (Appeals) set aside the duty demand only on the ground of limitation, invoking the principle of Revenue neutrality due to Modvat credit availability to the assessee.
5. The Tribunal disagreed with the Commissioner (Appeals) and held that the extended period could be invoked as there was no intention to evade duty, and the appellants had suppressed material facts regarding the inclusion of the bush value in the assessable value.
6. The Tribunal confirmed the duty demand against the appellants but reduced the penalty, emphasizing that the extended period for raising the duty demand was rightly invoked due to deliberate suppression of material facts by the appellants.

In conclusion, the Tribunal allowed the appeal of the Revenue, confirming the duty demand against the appellants and reducing the penalty. The decision was based on the failure of the appellants to include the value of the bush in the assessable value of their product, leading to the invocation of the extended period for raising the duty demand.