2000 (11) TMI 904 - AT - Central Excise

Summary

Issues:
Central Excise duty demand confirmation, imposition of penalty, confiscation of Plant and Machinery, alleged clandestine removal of goods, assessable value determination, plea for deduction of certain items from total duty liability, plea for remand for fresh adjudication, proportionality of penalty to duty demanded.

Central Excise Duty Demand and Penalty Imposition:
The appeal challenged the Order-in-Original confirming a Central Excise duty demand of Rs. 3,90,825.57 and imposing a penalty of Rs. 4,00,000 on M/s. Ranchi Packaging Enterprises. The company's premises were searched, revealing a novel modus operandi for removing goods without duty payment. A Show-cause Notice was issued demanding duty of Rs. 4,02,928.52. The appellants argued for exemption under Notification No. 59/88-C.E. and contested the duty liability, claiming they cleared non-printed cardboard boxes not attracting duty. The Commissioner upheld the duty demand and penalty.

Assessable Value Determination and Deduction Plea:
The appellants contested the assessable value calculation and sought deduction of specific items from the total duty liability. They argued that duty collected separately for certain cases should not be part of the assessable value. The Commissioner's failure to discuss these points led to the need for remand for a fresh adjudication on these issues.

Clandestine Removal Allegation:
The Commissioner found evidence supporting clandestine removal of goods beyond doubt, rejecting the appellants' claim of manufacturing exempted cardboard boxes. The appellants' argument that the inputs were misclassified was dismissed based on evidence presented during the search.

Proportionality of Penalty:
The appellants contended that the penalty of Rs. 4,00,000 was disproportionate to the duty demanded. However, the Tribunal viewed the appellants' evasion tactics as warranting a severe penalty, considering the penalty imposed not disproportionate to the confirmed duty demand.

Remand for Fresh Adjudication:
The Tribunal partially set aside the order for reevaluation on specific points, directing the Adjudicating authority to reconsider the assessable value, deduction plea, and penalty proportionality. The appellants were granted the opportunity to present their case during the fresh adjudication process. The appeal was partially rejected and partially allowed by way of remand for further proceedings.