1997 (10) TMI 122 - AT - Central Excise

Summary

Issues:
- Allegation of wilful mis-declaration and incorrect price declaration
- Invocation of extended period for duty recovery
- Imposition of penalty by the Collector
- Interpretation of questionnaire response regarding shareholding

Analysis:
The appellants, marketing products through M/s. Blue Star (P) Ltd., filed a price list in 1990 duly approved later that year. Allegations arose in 1992 that the appellants made wilful mis-declaration and declared incorrect wholesale prices, resulting in a demand for differential duty and a penalty of Rs. 25,000 imposed by the Collector. The main issue was the invocation of the extended period for duty recovery and penalty imposition based on alleged misrepresentation. The appellants argued that they had no shareholding in the buyer's company, Blue Star (P) Ltd., contrary to the buyer's 40% share in the appellants' company. The questionnaire response in negative regarding shareholding was deemed correct as it did not cover the scenario of buyers having shareholding in the manufacturing unit. The Tribunal found no misrepresentation or suppression in the appellants' response, leading to the demand for the extended period being set aside along with the penalty. The Tribunal emphasized that the decision was based on the question of limitation, avoiding a detailed examination of the case's merits. Ultimately, the appeal was allowed, the Collector's orders were overturned, and appropriate relief was granted.

This judgment primarily addressed the issue of alleged misdeclaration and incorrect price declaration leading to duty recovery and penalty imposition. The Tribunal focused on the interpretation of the questionnaire response regarding shareholding, determining that the appellants' response was accurate and did not warrant the invocation of the extended period for duty recovery or penalty imposition. The Tribunal's decision hinged on the absence of misrepresentation or suppression in the appellants' response, ultimately leading to the reversal of the Collector's orders and the grant of relief to the appellants. The judgment underscored the importance of accurate responses to official inquiries and the consequences of misinterpretation in such contexts.