1985 (3) TMI 172 - AT - Central Excise

Summary

Issues:
The issues involved in the judgment are imposition of personal penalty under Rule 173Q, calculation of duty on clearances of mopeds with additional fittings, contravention of various Central Excise Rules, and the time bar for recovery of differential duty.

Imposition of Personal Penalty under Rule 173Q:
The Collector of Central Excise imposed a personal penalty of Rs. 5 lakhs on the appellants under Rule 173Q for not declaring additional charges for rear shock absorbers, labour charges for modifications, painting, packing, and forwarding charges. The appellants argued that the prices had been approved by the department and that the duty was paid on the mopeds. However, the Collector passed the orders imposing the penalty.

Calculation of Duty on Clearances of Mopeds with Additional Fittings:
The appellants were found to be charging extra amounts for rear shock absorbers, labour charges for painting, and packing charges, which were not declared in the price list. The department issued a show cause notice for contravention of various Central Excise Rules. The appellants argued that the shock absorbers were not essential parts but accessories, citing relevant legal precedents. However, the department contended that the demand was not time-barred and that the goods should be valued based on how they were presented at the time of clearance from the factory.

Contravention of Central Excise Rules and Time Bar for Recovery of Differential Duty:
The appellants were found to have not disclosed material particulars in the price lists, leading to a demand for differential duty. The issue of time bar for recovery of duty was raised, with the appellants arguing that the show cause notice was issued beyond the prescribed period. The Tribunal held that the demand for recovery of differential duty was time-barred but imposed a reduced penalty of Rs. 4,00,000 under Rule 173Q for the infringement.

This judgment by the Appellate Tribunal CEGAT, New Delhi addressed issues related to the imposition of personal penalty under Rule 173Q, calculation of duty on clearances of mopeds with additional fittings, contravention of Central Excise Rules, and the time bar for recovery of differential duty. The appellants were penalized for not declaring additional charges for rear shock absorbers, labour charges, painting, and packing charges. The Tribunal considered legal precedents regarding the classification of shock absorbers as essential parts or accessories. It was determined that the demand for recovery of differential duty was time-barred, but a reduced penalty of Rs. 4,00,000 was imposed under Rule 173Q for the infringement.