1989 (8) TMI 219 - AT - Central Excise

Summary

Issues:
- Misdeclaration of percentage of Rice Bran Oil content in soap
- Central Excise duty evasion
- Duty rebate adjustment
- Imposition of penalty

Misdeclaration of percentage of Rice Bran Oil content in soap:
The appellant, a manufacturer of excisable goods including soap, availed a concessional rate of duty for soap made with indigenous Rice Bran Oil. A show cause notice alleged misdeclaration of Rice Bran Oil content, leading to Central Excise duty evasion. The appellant argued that due to the manufacturing process, variations occurred in the percentage of oil used, resulting in excess payments at times. The Jurisdictional Assistant Collector confirmed the demand and imposed a penalty under Rule 173 Q of the C.E. Rules, 1944.

Central Excise duty evasion:
The appellant's appeal to the Collector (Appeals) C.E., Calcutta, led to a remand for fresh examination of the duty rebate adjustment claim. On remand, the Additional Collector of Central Excise, Calcutta-1, rejected the appellant's request for adjusting the allegedly unavailed rebate amount. The Additional Collector imposed a penalty of Rs. 1000 and maintained that the claim for unavailed rebate should have been filed under Section 11B of the Central Excises & Salt Act, 1944. This decision prompted the present appeal.

Duty rebate adjustment:
The appellant contended that duty payments were based on individual charges, leading to possible overpayments or underpayments due to variations in oil content. The appellant argued for a set-off of excess payments against any underpayment. Reference was made to Rule 173-(1) Sub-rule (2) regarding the adjustment of duties paid. The appellant emphasized that the duty adjustment claim was not time-barred as assessments were provisional and pending finalization based on ongoing disputes.

Imposition of penalty:
The appellant challenged the legality of the penalty imposed by the Additional Collector, arguing that the matter was remanded solely for examining the adjustment claim. As the impugned order was set aside, the penalty order was also nullified. Consequently, the penalty issue did not require further discussion.

In conclusion, the appeal was allowed, setting aside the impugned order and granting relief to the appellant. The department was directed to assess any excess payments made by the appellant and adjust them against any underpayment of duty during the relevant period. The penalty order was also revoked as a result of setting aside the impugned decision.