1999 (10) TMI 171 - AT - Central Excise

Summary

Issues:
1. Duty payment on "Cylinder Block Piston Assembly" by the assessee.
2. Allegations of duty evasion and penalties imposed.
3. Claim of the assessee regarding the nature of assembly and duty applicability.
4. Consideration of limitation on duty payment and show cause notice issuance.
5. Assessment of the prima facie case made by the assessee.

Analysis:
The case involved the assessee, a manufacturer of motor vehicles and parts, who assembled "Cylinder Block Piston Assembly" and had a history of paying duty on it voluntarily until a certain date. Subsequently, they stopped paying duty without informing the authorities, leading to a show cause notice for duty evasion and penalties. The assessee argued that the assembly was not a new product and fell under the same category as the cylinder block, hence not attracting duty. They also claimed a lower duty amount than confirmed by the Commissioner, citing Modvat and deductions.

The Tribunal noted that the assessee unilaterally ceasing duty payment without proper communication resulted in underpayment. The Tribunal highlighted that the duty was paid previously following due declarations, questioning the sudden cessation without intimation. The issue of limitation on duty payment and show cause notice issuance was discussed, with reference to a pending judgment. The Tribunal emphasized that the assessee failed to establish a strong prima facie case in their favor, considering the nature of the assembly and the duty payment history.

The Tribunal also considered the statement of a Deputy G.M. indicating that the assembled product was recognized differently as a cylinder block. Ultimately, the Tribunal directed the assessee to deposit a specific amount towards the confirmed duty, with the waiver of the remaining duty and penalties upon compliance. The assessee was granted a deadline for the deposit, with a subsequent reporting requirement.

In conclusion, the Tribunal addressed the duty payment history, the nature of the assembly, the unilateral cessation of duty payment, the limitation on duty payment, and the prima facie case presented by the assessee, ultimately issuing a directive for the deposit and stay of recovery based on the findings.