2005 (3) TMI 231 - AT - Central Excise

Summary

Issues:
- Duty demand confirmation against the appellants for suppressing manufacture and sale of tin containers to evade duty payment and avail exemptions.
- Year-wise analysis of duty demand for the periods 1998-1999, 1999-2000, and 2000-2001.
- Correct calculation of duty liability, application of cum-duty price, and re-quantification of duty.
- Contestation of duty liability for the period 1-7-2000 to 31-3-2001.
- Demand confirmation against appellants on inputs removed during 1-8-2000 to 31-3-2001 and the reversal of Modvat credit availed on short found inputs.

Analysis:

The appellate tribunal addressed the issue of duty demand confirmation against the appellants for allegedly suppressing the manufacture and sale of tin containers to evade duty payment and benefit from exemptions. The duty demand for the years 1998-1999, 1999-2000, and 2000-2001 was analyzed year-wise. For 1998-1999, the tribunal found no tangible evidence to substantiate the differential duty claim, as the appellants had paid duty on goods manufactured with power and without any challenge from the department. Thus, the demand for this year was deemed unsustainable.

Moving to 1999-2000, the tribunal noted that the appellants had paid duty on goods manufactured with power and ceased such production, surrendering their registration. As there was no evidence of breaching the SSI exemption, the duty demand for this year was also considered unsustainable. Similarly, for 2000-2001, the tribunal found that duty was not paid on goods manufactured without power until the registration was reinstated, and the duty liability was correctly calculated by applying the cum-duty price. The duty for this period was directed to be re-quantified accordingly.

Regarding the period 1-7-2000 to 31-3-2001, duty liability was not contested by the appellants, but the duty amount calculation was found incorrect due to the absence of the cum-duty price consideration. Hence, duty liability required re-quantification for this period. Additionally, the demand for the period 1-8-2000 to 31-3-2001, based on inputs removed by the appellants, was modified. The appellants were directed to reverse the Modvat credit availed on the short found inputs during this period.

Conclusively, the impugned order was modified concerning duty, and the matter was remanded to the adjudicating authority for re-quantification. The penalty imposed was reduced, and the appeals of the appellants were disposed of accordingly.