2001 (8) TMI 436 - AT - Central Excise

Summary

Issues involved:
- Waiver of deposit of duty and penalty for Reliance Industries Ltd.
- Waiver of deposit of penalties for employees H.R. Shah and M.B. Patel.
- Limitation on demand of duty and penalty.
- Submission of cost audit report and its relevance.
- Departmental responsibility in verifying submitted figures.

Analysis:

1. Waiver of Deposit of Duty and Penalty:
The case involved applications for the waiver of deposit of duty by Reliance Industries Ltd. amounting to approximately Rs 8.08 crores and a penalty under Rule 173Q of Rs. 8.00 crores. Additionally, there were requests for the waiver of deposit of penalties under Rule 209A of Rs. 40.00 lakhs on H.R. Shah and Rs. 20.00 lakhs on M.B. Patel, employees. The Tribunal heard arguments from both sides extensively regarding these waivers.

2. Limitation on Demand of Duty and Penalty:
The primary contention raised was regarding the limitation on the demand for duty and penalty. The Commissioner had found that the applicant under-declared the value for a specific period. The Tribunal analyzed the arguments related to limitation, especially for the year 1994-95. While the applicant argued on the inclusion of actual profit, the Tribunal observed that the demand for the remaining years was based on discrepancies highlighted in the cost audit reports.

3. Submission of Cost Audit Report and Its Relevance:
The submission of a certificate by a Chartered Accountant certifying the correctness of the cost of manufacture under Valuation Rules was a crucial point of contention. The department initiated investigations following the receipt of a circular from the Board, questioning the elements involved in determining the cost of manufacture and profit. The Tribunal considered the finalization of cost audit reports and the availability of accurate figures for assessment purposes.

4. Departmental Responsibility in Verifying Submitted Figures:
The Departmental Representative emphasized the manufacturer's responsibility to ensure the accuracy of submitted figures. The contention was made that the cost audit report, as per Rule 173G, should have been furnished to the department. The Tribunal deliberated on the department's conduct in not questioning the values claimed earlier and the significance of the Chartered Accountant's certificate. Ultimately, a decision was made to accept a partial deposit and waive the balance of duty and penalty based on the circumstances presented.

In conclusion, the Tribunal's judgment addressed the issues of waiver of duty and penalties, the limitation on demand, the submission of cost audit reports, and the department's responsibility in verifying submitted figures, providing a detailed analysis and decision on each aspect of the case.