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1995 (10) TMI 116 - AT - Central Excise

Issues Involved:
1. Misdeclaration and suppression of facts.
2. Determination of assessable value for polyester films.
3. Invocation of the extended period of limitation.
4. Imposition of penalty.

Issue-wise Detailed Analysis:

1. Misdeclaration and Suppression of Facts:
The Collector found that the appellants made misdeclarations in Part-I price lists by stating that sales were made at the factory gate when, in reality, they were not. The appellants argued that the Department was aware of their sales system and that nothing was concealed. However, it was determined that the appellants failed to clearly indicate that goods were consigned to their depot at Noida, which would have revealed the misdeclaration. The charges of suppression of facts and misdeclaration were thus proven, and the demand was not considered time-barred.

2. Determination of Assessable Value for Polyester Films:
The Department argued that the assessable value should be based on the wholesale ex-depot price minus deductions for freight and insurance, as the appellants were transferring stock to their Noida depot and selling it at higher prices. The appellants contended that the prices were approved by the Department and that there was no need to reassess the value. However, the Tribunal found that for certain varieties of films, there was no wholesale market at the factory gate, necessitating the determination of assessable value based on depot prices after allowing deductions. The Tribunal agreed with the Collector's method of using the transport cost of a similarly located firm due to the lack of specific evidence from the appellants.

3. Invocation of the Extended Period of Limitation:
The appellants argued against the invocation of the extended period of limitation, claiming no misstatement or suppression. The Tribunal, however, found that the appellants did not disclose that certain varieties of films had no market at the factory gate and were sold only from depots. This non-disclosure amounted to suppression of facts. The Tribunal concluded that the appellants' actions were intended to evade duty, justifying the invocation of the extended period under the proviso to Section 11A.

4. Imposition of Penalty:
The appellants argued that the penalty was unjustified as the price lists were approved, and duty was paid accordingly. The Department countered that the appellants knowingly declared prices as if there was a market at the factory gate to pay less duty. The Tribunal agreed with the Department, finding that the appellants' actions demonstrated an intention to evade duty. However, the Tribunal reduced the penalty from Rs. 1.50 lakhs to Rs. 75,000, considering the circumstances.

Conclusion:
The Tribunal upheld the demand for differential duty on polyester films not sold at the factory gate, confirmed the invocation of the extended period of limitation due to suppression of facts, and justified the imposition of a penalty, albeit reducing its quantum. The appeal was disposed of accordingly.

 

 

 

 

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