1994 (12) TMI 196 - AT - Central Excise

Summary

Issues Involved:
1. Whether the clearances made by M/s. Auto Industries at premises No. 29 and 29A should be clubbed.
2. Determination of the cost of packing in respect of goods being partly captively consumed and whether the sale price should be treated as the cum-duty price.
3. Limitation period for the demand.

Judgment Summary:

Issue 1: Clubbing of Clearances
The Tribunal examined whether the clearances made by M/s. Auto Industries at premises No. 29 and 29A, run by three partners from 1-4-1983 to 31-12-1983, should be clubbed with clearances effected by M/s. Auto Industries with two partners at premises No. 29 from 1-1-1984 to 31-3-1984. The Tribunal upheld the Collector's finding that the clearances should be clubbed, as the manufacturing of tread rubber continued in the same factory premises at door No. 29A throughout the period. The Tribunal noted that the premises at door No. 29A were used by M/s. Auto Industries even after the dissolution of the partnership and the creation of M/s. Auto Rubber Industries, which did not start manufacturing until April 1984.

Issue 2: Cost of Packing and Cum-Duty Price
The Tribunal addressed whether the sale price should be treated as the cum-duty price and whether the cost of packing should be included in the assessable value. It was held that the sale price could not be treated as the cum-duty price because the goods were cleared as exempted goods, and no duty was collected. The Tribunal found no infirmity in the Collector's order to include the cost of ordinary non-returnable packing in the assessable value, as the price to independent wholesale buyers was available.

Issue 3: Limitation Period
The Tribunal examined whether the extended period u/s 11A of the Central Excises and Salt Act, 1944, was rightly invoked. It was held that the dissolution of the partnership and the surrender of the licence were done with the intention to evade payment of duty. The Tribunal agreed with the Collector that the contravention of rules was deliberate, and thus, the extended period was applicable. The Tribunal rejected the appellant's argument of bona fide belief that the goods were exempted, citing that the entire operation was manipulated to evade duty.

Conclusion:
The Tribunal upheld the impugned order, confirming the demand for duty and penalty, and rejected the appeal.