2000 (8) TMI 576 - AT - Central Excise

Summary

Issues:
1. Alleged duty evasion on glazed tiles and machinery manufacturing.
2. Duty calculation on advances from customers.
3. Pricing based on regions.
4. Pricing at factory gate vs. depot.
5. Exceeding limits specified in exemption notification.
6. Manufacturing machines for captive consumption.

Analysis:
1. The appellants faced allegations of duty evasion on glazed tiles and machinery manufacturing. The show cause notice claimed duty short levied on glazed tiles and machinery manufacturing. The Commissioner confirmed the demands and imposed a penalty of Rs. 5 lakhs, allowing redemption on payment of Rs. 1 lakh. The Tribunal held that broken glazed tiles were not excisable based on a previous judgment, thus rejecting the demand amounting to Rs. 6,02,099.58.

2. Duty calculation on advances from customers was challenged. The duty quantified at Rs. 7,44,452.23 based on notional interest added to the assessable value was disputed. The Tribunal ruled that such additions can only be made if a nexus between charging advances and price depression is established. As no such connection was proven, the demand for Rs. 7,44,452.23 was dismissed.

3. Pricing based on regions was another issue. The show cause notice alleged that separate prices for different regions were impermissible. Citing previous judgments, the Tribunal held that the highest price in any region must prevail for all clearances, leading to the success of the appeal to the extent of Rs. 14,429.

4. The discrepancy in pricing at the factory gate vs. depot was contested. The demand to calculate duty based on depot prices instead of factory gate prices was rejected by the Tribunal, citing the prevailing law before the re-definition of "place of removal" in 1996.

5. The allegation of exceeding limits specified in the exemption notification was also dismissed by the Tribunal when other demands were not upheld. The consequential confirmation of duty did not sustain.

6. Lastly, the manufacturing of machines for captive consumption was disputed. The Tribunal found the claim that the machinery was attached to the earth and not goods to be lacking merit. The duty amounting to Rs. 68,922.70 was upheld, while the appeal succeeded in all other aspects, leading to the remittance of the imposed penalty and setting aside of orders of confiscation.