2000 (12) TMI 637 - AT - Central Excise

Summary

Issues:
- Central Excise duty demand confirmation and penalty imposition.
- Exemption under Rule 173C(11) of Central Excise Rules, 1944.
- Inclusion of value of duty-free "Wheel Cylinder" in assessable value.
- Application of Supreme Court judgment on assessable value calculation.
- Limitation period for duty demand.
- Imposition of penalty and mala fide intention.

Central Excise Duty Demand and Penalty:
The appeal challenged the Order-in-Original confirming a Central Excise duty demand of Rs. 22,14,365.34 and imposing a penalty of Rs. 3,00,000 on M/s. Coventry Spring & Engineering Co. Ltd., Jamshedpur. The jurisdictional Assistant Collector granted exemption under Rule 173C(11) of the Central Excise Rules, 1944, subject to conditions regarding price declaration in invoices.

Inclusion of Duty-Free "Wheel Cylinder" in Assessable Value:
The issue arose when M/s. T.E.L.Co. started supplying duty-free "Wheel Cylinder" under Rule 57F(2) after obtaining necessary permission, leading to the exclusion of its value in the assessable value calculation for Axle Brake Assembly. The appellants argued that the cost of the wheel cylinder should not be included based on specific remarks in invoices and past payment practices.

Application of Supreme Court Judgment on Assessable Value:
The appellant's advocate referenced a Supreme Court case to support the exclusion of the wheel cylinder's cost from the assessable value, emphasizing the invoicing details and the lack of mala fide intent to evade duty payment. The Tribunal analyzed the legal precedents cited and their applicability to the case at hand.

Limitation Period for Duty Demand:
Regarding the limitation period for duty demand, the appellants contended that the demand was time-barred due to specific remarks in invoices and the absence of suppression of facts. The Tribunal considered the timeline of events, assessable values, and the submission of relevant documents to determine the validity of the limitation argument.

Imposition of Penalty and Mala Fide Intention:
The Tribunal assessed the imposition of the penalty in light of the appellant's argument that there was no mala fide intention to evade duty payment, especially considering the availability of Modvat credit to T.E.L.Co. if duty differentials were paid. The Tribunal concluded that there was no justification for invoking the extended period under proviso to Section 11A(1) of the Central Excise Act.

Conclusion:
The Tribunal upheld the order on merits but set aside the decision on the limitation period, ultimately allowing the appeal with consequential relief to the appellants. The judgment provided a detailed analysis of the legal provisions, factual circumstances, and precedents to arrive at a comprehensive decision on the issues raised in the appeal.