1997 (5) TMI 231 - AT - Central Excise

Summary

Issues:
Challenge to order-in-original dated 12-9-1988 passed by Additional Collector of Central Excise, Calcutta-I. Applicability of Notification No. 120/75 to goods transferred to depots and sold from there. Determination of assessable value for goods sold at depots. Allegation of deliberate suppression of facts to evade duty. Bar of limitation for issuing show cause notice. Justification of penalty imposition.

Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi challenged the order-in-original dated 12-9-1988 passed by the Additional Collector of Central Excise, Calcutta-I. The appellant, engaged in the manufacture of soldering and flux materials, availed the benefit of Notification No. 120/75 for exemption on duty for goods cleared from the factory. There was a dispute regarding the applicability of this exemption to goods transferred to depots and sold from there. The Additional Collector relied on Trade Notice No. 154, dated 7-12-1983, to conclude that the notification was not applicable to depot sales. The Tribunal proceeded on the basis that the notification did not apply to goods transferred to depots.

Regarding the determination of assessable value for goods sold at depots, the Tribunal held that the Additional Collector's method of considering prices charged at depots and deducting certain charges was correct. The appellant's argument to value depot sales based on factory gate prices was rejected since the exemption under Notification No. 120/75 did not extend to depot sales. Therefore, the differential duty determined in the order was deemed justified by the Tribunal.

The appellant contested the allegation of deliberate suppression of facts to evade duty and argued that the show cause notice was issued beyond the limitation period. The Tribunal noted that the Department had alerted the appellant about the inapplicability of the notification to depot sales in December 1983. Despite requests for information, the appellant failed to provide complete details promptly. The Tribunal found that the appellant was guilty of suppression of material facts with the intent to evade duty, justifying the imposition of penalty.

Regarding the bar of limitation for issuing the show cause notice, the Tribunal considered the appellant's failure to provide necessary information promptly. The Tribunal held that the notice issued on 31-12-1986 for duty liability in 1984, based on information furnished on 6-1-1986, was not unreasonable considering the verification process. Therefore, the contention that the notice was barred by time was rejected.

Given the appellant's conduct and the findings on suppression of facts, the Tribunal upheld the imposition and quantification of the penalty. Consequently, the appeal was dismissed by the Tribunal.