2000 (10) TMI 599 - AT - Central Excise

Summary

Issues:
1. Computation of duty liability, interest, and penalty for the period prior to 28-9-96.
2. Correct width and value of fabrics for duty calculation.
3. Levying interest and imposing penalties for the period before statutory provisions were introduced.

Analysis:

Issue 1 - Computation of duty liability, interest, and penalty for the period prior to 28-9-96:
The case involved a demand of Rs. 69,73,207/- against the appellant due to allegedly clearing processed fabrics chargeable to duty at different rates under the guise of processed hosiery exempt from duty. Penalties were imposed under various sections of the Central Excise Act. The appellants did not dispute the findings but challenged the computation of duty liability, interest, and penalties for the period before 28-9-96 when relevant statutory provisions were introduced. The Tribunal upheld that no interest or penalty could be levied for the period before the introduction of these provisions, directing the Commissioner to recalculate the quantum of interest and penalty under the Act.

Issue 2 - Correct width and value of fabrics for duty calculation:
The appellants challenged the computation of duty liability based on the width and value of the fabrics used in processing. They argued that the width of the fabric and the value of grey fabrics adopted in the show cause notice were incorrect. The appellants provided additional evidence, including letters from customers and invoices, to support their claim that the width and value of the fabrics were different from what was assumed. The Tribunal noted that the adjudicating authority did not consider these submissions and remanded the case to the Commissioner for a fresh decision on the correct width and value of the fabrics, allowing the additional evidence to be considered.

Issue 3 - Levying interest and imposing penalties for the period before statutory provisions were introduced:
The Tribunal ruled that no interest could be levied and no penalty imposed for the period prior to 28-9-96 when the relevant statutory provisions came into effect. Therefore, the Commissioner was directed to recalculate the interest and penalty amounts under the Central Excise Act, providing the appellants with a reasonable opportunity to present their case before fresh orders were passed.

In conclusion, the Tribunal set aside the impugned order and allowed the appeals by remanding the case for a fresh decision on the correct width and value of the fabrics for duty calculation, as well as for the recalculation of interest and penalties in accordance with the statutory provisions.