1996 (4) TMI 308 - AT - Central Excise

Summary

Issues: Duty demand based on clubbing clearances of two units and availing Notification No. 175/86 wrongly, penalty imposition.

Analysis:
1. The appellants contested a duty demand of Rs. 6,20,276 and a penalty of Rs. 50,000 based on clubbing clearances of two units and allegedly availing Notification No. 175/86 wrongly.

2. The appellants argued that the demand pertained to 1989-90 and 1990-91, with no intent to evade duty. They had units in Bangalore and Mandya manufacturing cement coated steel pipes for BWSSB, seeking exemption for pipes supplied to the Cauvery water supply scheme.

3. The appellants claimed they did not suppress facts as they were pursuing exemption discussions with authorities, not eligible for Notification No. 175/86 due to clearances from both units. Non-disclosure of Mandya operations was not suppression.

4. The DR contended that the appellants suppressed Mandya unit information while claiming Notification No. 175/86 benefits for the Bangalore unit.

5. The Tribunal reviewed both arguments and focused on whether the appellants suppressed facts to evade duty. The classification lists did not mention the Mandya unit, crucial for assessing eligibility for Notification No. 175/86 benefits.

6. The appellants' failure to disclose the Mandya unit during classification list approval indicated intent to evade duty. Meetings after the relevant period did not absolve them of non-disclosure during the claim period.

7. The Tribunal found the appellants intentionally withheld Mandya unit information to benefit from Notification No. 175/86, despite being liable for duty if clearances from both units were combined. The penalty was reduced to Rs. 25,000, upholding the duty payment but modifying the penalty amount.

8. The Tribunal dismissed the appeal, affirming duty payment but reducing the penalty to Rs. 25,000 based on the appellants' suppression of material facts to avail wrongful benefits under Notification No. 175/86.