1986 (7) TMI 258 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 9A (i)(ii) and Rule 9A(5) regarding the determination of excise duty rates and valuation for goods cleared or removed from a factory or warehouse without payment of duty and compliance with excise formalities.

Detailed Analysis:

1. Facts of the Case: The appeal involved a dispute regarding the excise duty leviable on shoe-making machines manufactured by a company during 1975-78. The company had cleared some machines without paying excise duty and without following formalities, leading to a demand for duty and penalty by the authorities.

2. Interpretation of Rule 9A (i)(ii) vs. Rule 9A(5): The main contention was whether Rule 9A (i)(ii) or Rule 9A(5) applied for determining the duty rate. The appellant argued that the term "cleared" should be synonymous with "removed," and thus Rule 9A (i)(ii) should apply based on the date of actual removal. The respondent, however, contended that Rule 9A(5) was applicable, even before the 1981 amendment.

3. Precedents and Authorities: Various decisions and precedents were cited to support both parties' arguments. The appellant relied on cases where Rule 9A (i)(ii) was held applicable when the date of removal was known. Contrarily, the respondent cited cases where Rule 9A(5) was deemed relevant for instances of non-compliance leading to duty demand.

4. Tribunal Decisions: The Tribunal referred to previous judgments where the distinction between "cleared" and "removed" was discussed. It was noted that when actual removal dates were ascertainable, Rule 9A(1)(ii) should apply, as in the present case, rejecting the application of Rule 9A(5).

5. Penalty Imposition: The Tribunal upheld the penalty imposed due to the company's failure to pay duty initially, despite later rectifying the error. The Tribunal considered the company's stature and the reduced penalty amount by the Board, affirming the decision on penalty.

6. Final Decision: The Tribunal modified the Board's order, directing that duty be charged as per Rule 9A(1)(ii) and any excess duty paid should be refunded. The penalty amount was upheld, considering the company's compliance history and the reduced penalty by the Board.

In conclusion, the Tribunal clarified the application of Rule 9A (i)(ii) for determining excise duty rates based on the date of actual removal of goods, rejecting the application of Rule 9A(5) in cases where removal dates were known. The penalty imposition was upheld, and the appeal was disposed of accordingly.