2001 (2) TMI 731 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility of exemption under Notification 188/86-C.E.
2. Invocation of extended period of limitation u/s 11A(1) of the Central Excises and Salt Act, 1944.
3. Imposition of penalty u/r 173Q(1) of the Central Excise Rules, 1944.
4. Confiscation of goods and imposition of penalty on M/s. Madhu Tyre Service u/r 209A.

Summary of Judgment:

1. Eligibility of Exemption under Notification 188/86-C.E.:
The main issue was whether the appellant was entitled to exemption under Notification 188/86-C.E. for 79,800 inner tubes of rubber of specific sizes. The Collector found that the appellant did not make prominent and durable markings of the letters 'ADV' on the inner tubes, which was a requirement for the exemption. The evidence included seized inner tubes without 'ADV' markings and statements from employees confirming the absence of such markings. The Collector concluded that the appellant was not eligible for the exemption and had contravened the Central Excise Rules.

2. Invocation of Extended Period of Limitation u/s 11A(1):
The appellant argued that the demand for duty beyond six months was time-barred. However, the Collector found that the appellant had suppressed the fact of non-marking of 'ADV' letters on the inner tubes, which justified invoking the extended period of limitation u/s 11A(1). The Collector noted that the appellant was aware of the requirement for 'ADV' markings but failed to comply, thereby evading duty.

3. Imposition of Penalty u/r 173Q(1):
The Collector imposed a penalty of Rs. 10,000/- on the appellant u/r 173Q(1) for evading duty by not marking the inner tubes with 'ADV'. The Tribunal upheld this penalty, noting that the appellant's conduct was contumacious and warranted a heavy penalty. However, since the Revenue did not appeal for a higher penalty, the Tribunal confirmed the penalty imposed by the Collector.

4. Confiscation of Goods and Penalty on M/s. Madhu Tyre Service u/r 209A:
The Collector confiscated 72 inner tubes seized from M/s. Madhu Tyre Service but allowed them to be redeemed on payment of a fine of Rs. 1,000/-. The Collector found no evidence that M/s. Madhu Tyre Service was aware of the non-payment of duty and thus did not impose any penalty on them. The Tribunal upheld this decision, noting that the seized inner tubes were vital evidence of the appellant's non-compliance with the exemption notification.

Conclusion:
The Tribunal dismissed the appeal, upholding the Collector's order confirming the demand for duty, confiscation of goods, and imposition of penalty on the appellant. The Tribunal found no reason to interfere with the Collector's findings and conclusions.