1997 (7) TMI 352 - AT - Central Excise

Summary

Issues:
1. Confirmation of central excise duty demand and penalty imposition.
2. Nature of raw materials used in manufacturing electrical stamping and lamination.
3. Validity of the statement made by the General Manager.
4. Time-barred invocation for demand of central excise duty.

Analysis:
1. The appeal was filed against the Order-in-Original confirming central excise duty demand and imposing a penalty under the Central Excise Rules. The Collector confirmed the demand of central excise duty and imposed a personal penalty on the appellant. The demand was made under Rule 57-I of the Central Excise Rules read with Section 11A of the Central Excises and Salt Act, 1944. A penalty was also imposed under Rule 173Q of the Central Excise Rules, 1944.

2. The appellants were engaged in manufacturing electrical stamping and lamination, availing the facility of deemed credit on HR sheet/CR sheet. The officers found that the appellants were actually using electrical silicon and steel sheets/strips in manufacturing, not covered under the deemed credit order. The General Manager made a detailed statement confirming the use of these materials, including the purchase from Steel Authority of India Ltd. and traders. The appellants argued that they used non-silicon sheets for manufacturing, providing documentary evidence to support their claim.

3. The appellants contested the validity of the General Manager's statement, claiming it was not corroborated by independent evidence. They argued that the purchased goods were hot rolled/cold rolled sheets, not electrical silicon sheets as stated. The General Manager's statement was crucial in the case, and the appellants attempted to discredit it by providing contrary evidence. However, the tribunal found no reason to doubt the veracity of the statement, emphasizing that the General Manager never retracted it.

4. The issue of time-bar arose concerning the demand for central excise duty. The appellants contended that the demand was time-barred as the full facts were within the knowledge of the department, and the extended period of five years should not apply. However, the tribunal held that the extended period was rightly invoked since the appellants did not disclose their use of steel sheets and strips, which were not covered under the deemed credit order. Consequently, the tribunal dismissed the appeal, upholding the demand and penalty imposed.

This detailed analysis of the judgment highlights the key issues addressed by the tribunal, including the nature of raw materials used, the validity of statements, and the invocation of the extended period for demand of central excise duty.