1997 (10) TMI 225 - AT - Central Excise

Summary

Issues:
- Duty demand on PVC coating of G.I. wires under Heading 85.44 of the Central Excise Tariff Act, 1985
- Imposition of penalty on the appellants

Analysis:
The appeal in question pertains to a duty demand of Rs. 11,09,293.87 on PVC coating of G.I. wires and the imposition of a penalty of Rs. 1 lakh by the Collector of Central Excise, Raipur. The appellants argued that they had received G.I. wires and cables from the Telecom Department, declaring only job charges for the wires and cables cleared to the Telecom Department. They contended that the value of raw materials supplied by the Telecom Department was not included in the assessable value of the goods as required under Section 4 of the Central Excises and Salt Act, 1944. The appellants requested details regarding the basis for the cost of raw materials but were not provided with this information, despite repeated requests. The appellants argued that even if the raw material cost is to be added to the assessable value, it should not be the amount confirmed by the adjudicating authority. They requested a remand for determining the exact duty amount after receiving details on the basis of the raw material cost.

The Departmental Representative highlighted that the appellants did not respond to the show cause notice or avail themselves of a personal hearing. It was mentioned that the appellants themselves admitted to an amount of Rs. 9 lakhs payable, of which Rs. 3 lakhs had already been paid as directed by the order for pre-deposit. The Departmental Representative suggested that the remaining balance of Rs. 6 lakhs, which is the admitted duty, should be paid by the appellants. It was proposed that the matter be remanded for reconsideration regarding the remaining part.

Upon careful consideration of the submissions, the Tribunal observed that the appellants had requested information regarding the basis of the cost of raw materials and gate passes, but while gate passes were provided, the cost of raw material was not furnished to them. The show cause notice indicated the cost of raw material for the relevant years but did not explain how this cost was calculated. The Tribunal held that the appellants were entitled to know the details of how the cost of raw material was determined by the Department. Therefore, it was decided that the matter should be remanded to the adjudicating authority for providing the appellants with the basis of the raw material cost. The adjudicating authority was directed to give the appellants a reasonable opportunity to be heard in person and then pass fresh orders in accordance with the law.