1998 (1) TMI 283 - AT - Central Excise

Summary

Issues:
1. Waiver of deposit of duty for two companies.
2. Demand of duty based on alleged undervaluation of goods.
3. Demand of duty for tools and fixtures.
4. Demand of duty based on unavailability of Notification 1/93.
5. Financial hardship claim by the company.

Analysis:

Issue 1: Waiver of deposit of duty
Three applications for waiver of deposit of duty were filed by two companies. The duty amounts were approximately Rs. 64.62 lakhs and 7.47 lakhs for the companies. The Commissioner also ordered reversal of Modvat credit and imposed penalties on each of them. The duty was demanded on various grounds, including alleged undervaluation of goods and manufacturing discrepancies between the companies.

Issue 2: Demand of duty based on alleged undervaluation of goods
A significant amount was demanded due to alleged undervaluation of goods manufactured by one of the companies. The advocate argued that the value of the goods depended on metal content and application, citing evidence that was disregarded by the Commissioner. The departmental representative pointed out discrepancies in pricing and sales practices, emphasizing contradictory statements made by company employees.

Issue 3: Demand of duty for tools and fixtures
Another demand of approximately Rs. 1.9 lakhs was made for tools and fixtures, with a contention that they were actually manufactured by one of the companies and not by a separate entity as claimed. The Commissioner's finding regarding the applicability of a specific notification was highlighted, raising questions about the exemption claimed by the company.

Issue 4: Demand of duty based on unavailability of Notification 1/93
A demand of Rs. 6.25 lakhs was made based on the unavailability of a specific notification for a particular year. This demand was linked to the increased value of goods and clearance made by another company, leading to arguable issues regarding duty liability.

Issue 5: Financial hardship claim
The company pleaded financial hardship, citing the seizure of its books of accounts by the department. The advocate argued that the inability to prepare a balance sheet hindered substantiating the claim. The Tribunal expressed skepticism about the lack of a rough balance sheet or financial assessment despite the seizure, ultimately directing one of the companies to deposit a specified amount within a timeframe.

In conclusion, the judgment addressed multiple issues related to duty demands, manufacturing discrepancies, exemption claims, and financial hardship assertions by the companies. The Tribunal considered evidence, arguments, and Commissioner's findings to determine the duty liabilities and waiver of deposit, highlighting the need for clarity, substantiation of claims, and compliance with legal provisions in such matters.