1995 (3) TMI 201 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods under Rule 173Q of Central Excise Rules, 1944
2. Duty confirmation under Rule 9(2) of the Central Excise Rules, 1944
3. Imposition of penalty under Rule 173Q of Central Excise Rules, 1944
4. Alleged contravention of various rules under Central Excise Rules, 1944
5. Seizure of goods manufactured without obtaining Central Excise L-4 Licence
6. Defence rejection by the ld. Collector
7. Appeal against duty confirmation and penalty imposition
8. Assessment of assessable value for duty calculation
9. Eligibility of exemption under Notification No. 175/86, dated 1-3-1986

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi arose from an order-in-original concerning the confiscation of goods under Rule 173Q of Central Excise Rules, 1944, duty confirmation under Rule 9(2), and imposition of penalty under the same rule. The appellant was alleged to have contravened various rules by manufacturing and clearing excisable goods without the necessary licenses and documents. The goods were seized by the Central Excise Preventive Staff, leading to the appeal against the ld. Collector's decision. The appellant's defence was based on the understanding that the goods were not dutiable and had been exempted under a specific notification. The ld. Collector rejected this defence, leading to the appeal.

During the hearing, arguments were presented regarding the classification of the goods and the understanding of the department regarding their dutiability. The appellant claimed to have filed a correct Classification List, which was approved by the department. The appellant argued that since they held licenses for other items and the department was aware of the manufacturing process, the demand for a larger period based on suppression should not apply. The appellant also mentioned that the goods were removed under gate passes for railway supplies.

The Tribunal examined the submissions and found that the appellant had disclosed the goods correctly in the classification lists, leading to the conclusion that there was no suppression or clandestine clearance. As a result, the invocation of a larger period and penalty imposition were set aside. However, the duty confirmation on the goods and the assessment of the assessable value required further consideration.

The Tribunal remanded the case for fresh consideration to re-calculate the assessable value under the relevant provisions of the Central Excises & Salt Act, 1944. Additionally, the eligibility of exemption under Notification No. 175/86, dated 1-3-1986, was to be re-examined. The appeal was thus partially allowed, and the matter was sent back for a detailed reassessment based on the Tribunal's findings.