1994 (10) TMI 140 - AT - Central Excise

Summary

Issues:
1. Allegations of mis-declaration of quality and value of goods by the appellants.
2. Allegations of related party transactions between two firms owned by the same family.
3. Discrepancies in the categorization and pricing of the goods sold.
4. Imposition of duty and penalty by the Collector of Central Excise, Patna.
5. Appeal against the order-in-original dated 31-5-1985.

Analysis:
1. The appellants were accused of mis-declaring the quality and value of goods manufactured by them, leading to evasion of duty. The Assistant Collector alleged contravention of various provisions of the Central Excise Rules, 1944. The charge included related party transactions between two firms owned by the same family, supported by evidence of shared office space and discrepancies in pricing and duty payments.

2. The Collector held that the assessable value of goods should be based on the prices charged by one of the firms to independent buyers. The appellants were directed to pay the differential duty and imposed a penalty for deliberate misstatement and concealment of facts. The appellants contested the order, citing lack of time to respond to new charges introduced in a corrigendum and requested a remand for further consideration.

3. The Revenue argued that the appellants diverted sales through a related firm to evade duty, citing discrepancies in pricing and excess payments made by the related firm. The Department justified invoking a larger period for assessment and penalty due to the alleged misstatements and related party transactions.

4. The Tribunal found merit in the appellants' request for a remand, noting the issuance of a corrigendum after the hearing was completed. The matter was remanded to the Collector for re-adjudication, allowing the appellants to present evidence supporting their contentions regarding pricing and transactions with independent buyers. The Collector was instructed to expedite the re-adjudication process.

5. Ultimately, the appeal was allowed by way of remand, providing the appellants with an opportunity to present additional evidence and arguments before the Collector for a fresh decision in accordance with the law.