2000 (11) TMI 416 - AT - Central Excise

Summary

Issues:
1. Valuation of goods cleared to own units and independent buyers.
2. Allegations of clandestine removal of goods.
3. Limitation period for the demand raised.
4. Offer to deposit a specific amount towards confirmed duty.

Valuation of Goods Cleared:
The appellant firm sought dispensation of the pre-condition to deposit duty demand and penalty amounts totaling Rs. 83,39,880. The dispute arose from the valuation of goods cleared to their own units and independent buyers. The Revenue contended that goods sold to independent buyers at a higher price should be the assessable value for clearances to their own unit under Rule 6(b)(i) of the Central Excise (Valuation) Rules. The appellant argued that sales to specific entities were for spares, not final products, and should not be compared directly. They also highlighted lower quantities supplied to other manufacturers, making direct comparison inappropriate.

Allegations of Clandestine Removal:
Regarding allegations of clandestine removal, the appellant explained their import and use of materials, including copper for manufacturing various components. They clarified the disposal of waste and scrap, emphasizing that the Revenue lacked corroborative evidence to support claims of duty evasion. The appellant asserted that they had consistently informed the Revenue about waste and scrap generation, with decreasing percentages over the years, indicating transparency and compliance. The burden of proving clandestine activities rested with the Revenue, requiring evidence beyond doubt, which was not provided.

Limitation Period and Offer to Deposit:
The demand covered the period from April 1994 to March 1995 for valuation and clandestine removal, with a show cause notice issued in July 1995. The appellant argued that a significant portion of the demand fell outside the normal limitation period. While acknowledging the contentious nature of the issues, the appellant offered to deposit Rs. 10.00 lakhs towards the confirmed duty as a gesture of cooperation and financial stability. The Tribunal considered the arguments from both sides, deeming the offer reasonable, and directed the appellant to deposit the specified amount within six weeks. Pending compliance, recovery of the remaining duty and penalty was stayed, with the appeal scheduled for further proceedings to ensure adherence to the order.

This judgment from the Appellate Tribunal CEGAT, CALCUTTA addressed multiple issues related to the valuation of goods, allegations of clandestine removal, limitation periods for demands, and an offer to deposit a specific amount towards confirmed duty. The decision balanced the arguments presented by the appellant and the Revenue, emphasizing the need for evidence to substantiate claims of duty evasion and the importance of compliance with valuation rules. The Tribunal found the appellant's offer to deposit a specified amount reasonable, providing a pathway for resolution while ensuring ongoing compliance monitoring and further proceedings.