1998 (12) TMI 199 - AT - Central Excise

Summary

Issues: Appeals challenging orders-in-original regarding excise duty calculation, time bar, and penalty imposition.

Excise Duty Calculation:
The appellants, a regular excise licensee, had filed a classification list and availed small scale exemption along with Modvat credit. However, they only paid excise duty on job charges without considering the value of raw materials. The Tribunal found this approach incorrect as duty should be calculated on the value of excisable goods cleared from the factory, not just job charges. The lower authorities' view on this matter was upheld.

Time Bar:
The appellants claimed that the demand was time-barred as all relevant facts had been disclosed to the Revenue. However, the adjudicating authority noted that the cost of raw materials was not included in the invoices, constituting a suppression of facts. Consequently, the extended period of limitation was deemed applicable to the Department. The Tribunal agreed with this assessment.

Testing Charges:
The contract specified that goods were required to be tested as per Indian Standard Specification, with testing charges to be borne by the appellants. Additional testing charges and destruction testing charges were mentioned separately. The Tribunal clarified that additional testing charges incurred after goods clearance and destruction testing charges for product longevity testing should not be considered while determining the assessable value, subject to verification.

Penalty Imposition:
In one appeal, a duty liability of Rs. 77,404.63 and a penalty of Rs. 7,000 were imposed. In the other appeal, a duty liability of Rs. 2,15,394 and a penalty of Rs. 20,000 were imposed. The Tribunal found no grounds to interfere with the penalties imposed in both cases, considering the facts and circumstances. Subject to the observations on testing charges, the appeals were rejected, and the penalties were upheld.

This judgment addressed the correct calculation of excise duty, the application of the time bar, the treatment of testing charges, and the imposition of penalties in excise duty cases, providing detailed reasoning and analysis for each issue raised in the appeals.