1997 (2) TMI 332 - AT - Central Excise

Summary

Issues:
1. Declaration under Notification No. 111/78 for exemption from duty on goods under Tariff Item 68.
2. Time limitation for demanding duty.
3. Suppression of facts regarding manufacture of A.C.S.R. cables.
4. Correctness of declaration and imposition of penalty.

Issue 1: Declaration under Notification No. 111/78 for exemption from duty on goods under Tariff Item 68

The appellants, manufacturers of A.C.S.R. and other goods under Tariff Item 68, submitted a declaration under Notification No. 111/78 to avail exemption from duty on goods under Tariff Item 68. However, they failed to include the manufacture and clearances of A.C.S.R. cables in their declaration. The Department later alleged that the appellants exceeded the exempted limit, leading to a demand for duty.

Issue 2: Time limitation for demanding duty

The appellant argued that the demand for duty was time-barred as the Department was aware of the manufacture of A.C.S.R. cables, which was the main line of manufacture for the appellants. The Department contended that the appellants failed to make a proper declaration, leading to charges of suppression. The Tribunal held that the demand for duty was not time-barred, except for a specific period within the six-month limit.

Issue 3: Suppression of facts regarding manufacture of A.C.S.R. cables

The Department argued that the appellants suppressed facts regarding the manufacture of A.C.S.R. cables by not including them in the declaration under Notification No. 111/78. The appellants claimed the Department was aware of their main manufacturing line. The Tribunal found the appellants' declaration defective and sustained the charge of wilful misstatement, confirming the duty demand.

Issue 4: Correctness of declaration and imposition of penalty

The Tribunal confirmed that the appellants' declaration was incorrect and upheld the duty demand. However, considering the circumstances, the penalty imposed was reduced from Rs. 20,000 to Rs. 5,000. The Tribunal concluded that the appellants failed to make a proper declaration as required under the notification, leading to the sustained duty demand and reduced penalty.

This judgment highlights the importance of accurate declarations for availing duty exemptions and the consequences of suppression of material facts in such declarations. The Tribunal emphasized the need for compliance with notification requirements and upheld the duty demand due to the appellants' failure to make a correct declaration.