2000 (7) TMI 646 - AT - Central Excise

Summary

Issues:
1. Alleged evasion of Central Excise duty on Visible Card Recorder Cabinets (VCRCs) and Pass Book Cabinets (PBCs).
2. Change in mode of preparation of invoices to evade excise duty.
3. Adjudication order imposing duty and penalties on the parties.

Issue 1: Alleged Evasion of Central Excise Duty:
The case involved M/s. Methodex Systems Ltd. manufacturing VCRCs and PBCs. Central Excise officers found incomplete VCRCs in the duty paid godown, leading to a show cause notice alleging misdeclaration of products, evasion of duty amounting to Rs. 49,33,270.30, and improper invoicing practices. Another notice accused the company of changing invoice preparation to evade duty. The Commissioner passed an order imposing duty recovery and penalties on the company and its officials.

Issue 2: Change in Mode of Preparation of Invoices:
The second show cause notice accused M/s. Methodex Systems Ltd. of changing invoice preparation to show VCRCs and kraft pockets as separate items, attempting to evade excise duty. The notice alleged distortion of evidence and suppression of VCRCs' value, calling for duty recovery and penalties under Central Excise Rules.

Issue 3: Adjudication Order Imposing Duty and Penalties:
The Commissioner's order imposed duty recovery and penalties on the parties for alleged duty evasion. The appellants argued that kraft pockets were not integral to VCRCs, citing previous judgments. The Revenue contended that duty should be levied on the full intrinsic value of the products. However, the Tribunal found the Commissioner's order lacking in discussion and findings, remanding the matter for a fresh order within three months due to violations of natural justice principles.

In conclusion, the Tribunal set aside the Commissioner's non-speaking order and directed a fresh speaking order considering the show cause notices, facts, and submissions. The case highlighted issues of duty evasion, improper invoicing practices, and the importance of detailed adjudication orders adhering to natural justice principles.