1999 (9) TMI 370 - AT - Central Excise

Summary

Issues Involved:
1. Admission of Additional Documents
2. Classification and Exemption under SSI Notifications
3. Capacity of Production and Expert Opinion
4. Confessional Statements and Retractions
5. Alleged Excessive Quantity of Rubber Latex
6. Limitation and Suppression of Production
7. Penalties and Interest
8. Quantification of Demand and Classification of Goods

Summary:

1. Admission of Additional Documents:
The appellants sought permission to bring on record a copy of summons dated 31-1-1994 and a copy of the Panchnama dated 31-1-1994. The Tribunal allowed the Miscellaneous Applications, noting that these documents were drawn by the Department and were part of the investigations.

2. Classification and Exemption under SSI Notifications:
The appellants contended that their factory was an SSI Unit manufacturing latex foam sponge products, classifiable under different Chapter Headings of the Central Excise Tariff Act, 1985. They claimed exemption from duty under SSI Notification Nos. 175/86-C.E. and 1/93-C.E. due to their turnover being within permissible limits.

3. Capacity of Production and Expert Opinion:
The appellants argued that their unit did not have the capacity to produce the quantity of goods shown in File No. 2, supported by an expert opinion from a Chartered Engineer. The Tribunal found the expert opinion lacking value as the Chartered Engineer was not an expert in Rubber Technology.

4. Confessional Statements and Retractions:
The appellants' confessional statements were retracted, but the Tribunal noted that the case was built on the records in File No. 2, which were handwritten by the appellants' Director and Manager. The Tribunal held that the retractions were not material as the statements explained the figures and narrations in the documents.

5. Alleged Excessive Quantity of Rubber Latex:
The appellants admitted to selling extra quantities of latex to earn profit, which was against Rubber Board rules but not a violation of Central Excise Rules as they were exempt from maintaining raw material registers.

6. Limitation and Suppression of Production:
The appellants contended that the demand was barred by limitation and there was no suppression of production. The Tribunal held that the longer period was rightly invoked due to the appellants giving wrong declarations and suppressing production.

7. Penalties and Interest:
The appellants argued that the penalties imposed were harsh and unfair, and that Section 11AB of the Central Excise Act, 1944, enacted on 20-9-1996, did not apply to alleged irregularities from 1991-92 to December 1993. The Tribunal did not specifically address this issue in the summary.

8. Quantification of Demand and Classification of Goods:
The Tribunal found that the Commissioner did not properly classify the goods or determine the assessable value under Section 4 of the Central Excise Act, 1944. The case was remanded to the Commissioner to examine the appellants' contentions regarding the determination of assessable value, quantum of duty, and applicable rate of duty.

Conclusion:
The appeal was allowed by way of remand for re-examination of the quantification of duty and classification of goods.