1994 (7) TMI 202 - AT - Central Excise

Summary

Issues:
1. Whether the appellant contravened the provisions of Rule 57F(1)(ii) of Central Excise Rules, 1944 by transferring Silicon Fluid without reversing Modvat credit?
2. Whether the demand of duty and penalty imposed by the Additional Collector is sustainable?
3. Whether the extended period of five years for raising the demand is applicable in this case?
4. Whether the lack of jurisdiction in issuing the show cause notice and adjudicating by the Additional Collector affects the validity of the order?
5. Whether the imposition of a personal penalty of Rs. 25,000 is justified?

Analysis:

1. The appellant imported Silicon Fluid and transferred a portion to another unit without reversing the Modvat credit, leading to a contravention of Rule 57F(1)(ii). The Additional Collector imposed a demand of Rs. 25,993 for this violation.

2. The Additional Collector's order was based on the appellant's deliberate removal of inputs without following procedures, leading to suppression of facts and evasion of duty. The demand of duty and penalty of Rs. 25,000 were upheld due to the violation of Rule 57-F(i)(ii) and the proviso to Section 11-A of the Central Excises & Salt Act, 1944.

3. The extended period of five years for raising the demand was deemed applicable as the appellant failed to inform the Central Excise Authorities about the transfer, constituting a clear case of misstatement and suppression of facts leading to duty evasion.

4. The appellant argued lack of jurisdiction as the show cause notice and adjudication were done by the Additional Collector instead of the Collector. The Tribunal held that the Additional Collector had the authority to issue the notice and adjudicate the case, dismissing the lack of jurisdiction claim.

5. The imposition of the personal penalty of Rs. 25,000 was deemed justified due to the deliberate attempt to evade duty and defiance of the law by the appellant. The Tribunal found the penalty reasonable considering the offense and the value of the goods involved.

In conclusion, the Tribunal upheld the impugned order, confirming the demand of duty and penalty, and rejected the appeal filed by the appellant.