1998 (1) TMI 217 - AT - Central Excise

Issues:
1. Appeal against confirmation of central excise duty demand, Automobile Cess Rule demand, and penalty imposition.
2. Dispute regarding scooters cleared to depots and stockyards and sold from there.
3. Contention on approved factory gate price governing goods cleared to depots.
4. Interpretation of M.R.F. Ltd. decision and classification of buyers.
5. Bar on show cause notice by limitation.
6. Allegation of suppression with intent to evade duty.
7. Previous Tribunal decisions and knowledge attribution to the Department.
8. Mention of depot operation charges in Invoices.
9. Merits consideration and limitation bar.
10. Direction for deposit and waiver of pre-deposit requirement.
11. Compliance reporting date set for 12-5-1998.

Analysis:
1. The appellant filed an appeal against the confirmation of central excise duty demand amounting to Rs. 2,62,11,268/- for scooters cleared to depots and stockyards and sold from there during a specific period. Additionally, a demand of Rs. 1,29,441/- under the Automobile Cess Rule, 1984, and a penalty of Rs. 1 Crore were imposed for contravention of the Central Excise Act and Rules.

2. The dispute centered around scooters cleared to depots and stockyards and sold to wholesale dealers, with a show cause notice alleging duty evasion due to selling goods at prices higher than the factory gate price. The larger period of limitation under Section 11A(1) was invoked for alleged suppression of facts to evade duty.

3. The appellant argued, based on precedents, that the approved factory gate price should govern goods cleared to depots, irrespective of the price charged at the depots. The Commissioner, however, overruled this contention.

4. The tribunal observed that the approved factory gate price should generally govern clearance to depots, differing from the Commissioner's interpretation. The classification of buyers and the applicability of different prices based on the buyer class were discussed, requiring detailed consideration during the appeal hearing.

5. The appellant claimed that the show cause notice was time-barred, citing historical sales patterns to different regions as a basis for limitation defense.

6. Allegations of suppression with intent to evade duty were raised due to undisclosed sales at depots at prices exceeding the factory gate price. The Department contended that the necessary declaration to disclose such information was not filed, justifying the allegation of suppression.

7. Previous tribunal decisions and a letter from the Audit Department were discussed regarding the Department's knowledge of depot operations, with the tribunal finding no conclusive evidence attributing knowledge to the Department.

8. The mention of depot operation charges in Invoices from a specific date was highlighted as potential evidence that the Department was aware of stock transfers and extra charges at depots, affecting the limitation period.

9. The tribunal indicated that the merits of the case needed thorough consideration during the appeal hearing, with a limitation bar applicable for a specific period.

10. In light of the circumstances, the tribunal directed the appellant to deposit a specified amount within three months, with the waiver of the pre-deposit requirement and penalty amount upon compliance.

11. A compliance reporting date was set for 12-5-1998 to monitor adherence to the tribunal's directives.

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