1998 (12) TMI 258 - AT - Central Excise

Summary

Issues:
1. Valuation of Spent Nickel Catalyst in the value of Nickel Sulphate/Nickel Carbonate.
2. Limitation period for demand of duty.
3. Imposition of penalty on M/s. V.K. Oils (P) Limited and M/s. Hindustan Lever Limited.

Valuation of Spent Nickel Catalyst:
The Collector confirmed a duty demand against M/s. V.K. Oils (P) Limited for not including the value of Spent Nickel Catalyst in the calculation of Nickel Sulphate/Nickel Carbonate supplied to M/s. Hindustan Lever Limited. The Spent Nickel Catalyst, a by-product, was not returned as required by Rule 57F(2). M/s. V.K. Oils (P) Limited argued no undervaluation occurred, but it was established that the value of Spent Nickel Catalyst was crucial for determining the value of the final products. The Tribunal agreed there was undervaluation, upholding the duty demand of Rs. 6,20,931.00.

Limitation Period for Demand:
The Tribunal noted that the Spent Nickel Catalyst had a market value and was essential for manufacturing Nickel carbonate/sulphate. The failure to declare its value, coupled with not returning it as per rules, indicated suppression and misstatement. The proviso to Section 11A was rightly invoked, extending the demand period beyond 6 months due to the non-disclosure of crucial information.

Imposition of Penalty:
Penalties were imposed on M/s. V.K. Oils (P) Limited and M/s. Hindustan Lever Limited due to substantial undervaluation and failure to return the Spent Nickel Catalyst. The Tribunal upheld the penalties, considering the significant value of the goods involved and the intentional non-disclosure of material facts. The quantum of penalty was deemed reasonable, and the appeals against the penalties were rejected, affirming the imposition of penalties on both parties.

In conclusion, the Tribunal upheld the duty demand against M/s. V.K. Oils (P) Limited, extended the demand period due to suppression of material facts, and upheld the penalties imposed on both M/s. V.K. Oils (P) Limited and M/s. Hindustan Lever Limited for undervaluation and non-compliance with rules regarding Spent Nickel Catalyst.