2000 (8) TMI 908 - AT - Central Excise

Issues:
1. Assessment of excise duty on paper.
2. Allegations of short/less payment of excise duty.
3. Refund claims and differential duty.
4. Tolerance limits for nominal weight in excise duty assessment.
5. Change in status of assessee and liability for duty.
6. Responsibility for payment of duty on goods manufactured before acquisition.
7. Trade practices and government-fixed tolerance limits.
8. Remand for de novo adjudication.

Analysis:

1. Assessment of excise duty on paper:
The case involves M/s. I.P.P. Limited, a paper manufacturer, subject to excise duty levied at ad valorem and specific rates under the Central Excises and Salt Act. Additionally, a duty of excise as "cess" was imposed by the Ministry of Industry on paper and paperboard. The dispute arises from discrepancies between nominal and actual weights of paper reams, impacting duty assessment.

2. Allegations of short/less payment of excise duty:
The Superintendent Central Excise issued show cause cum demand notices to the appellant, alleging various discrepancies leading to short payment of excise duty. These included higher invoiced values, non-inclusion of wrapper weight, incorrect cess payment, and impermissible trade discounts. The Commissioner (Appeals) upheld some demands while allowing duty refunds and remanding others for further assessment.

3. Refund claims and differential duty:
The Commissioner (Appeals) addressed downward variations in price but upheld the requirement for the appellant to pay differential duty in case of upward price revisions. The appellant challenged this decision, emphasizing the commercial trade practice of invoicing based on nominal weight even if it differs from actual weight, supported by Indian Standard Institution's tolerance limits.

4. Tolerance limits for nominal weight in excise duty assessment:
The appellant argued for the acceptance of nominal weight in excise duty calculation, highlighting the industry practice and Indian Standard Institution's tolerance limits. The Commissioner (Appeals) decision was critiqued for not considering the commercial norms followed in the paper trade regarding invoicing based on nominal weight.

5. Change in status of assessee and liability for duty:
The appellant contested the Commissioner (Appeals) finding of no change in the assessee's status post-acquisition by the Government of West Bengal. The appellant's acquisition of the company through public auction was cited to assert a change in entity and status, impacting liability for past demands.

6. Responsibility for payment of duty on goods manufactured before acquisition:
The Tribunal emphasized that duty liability rests with the person chargeable as per Rule 7 of the Central Excise Rules. It was clarified that the appellant, having acquired the concern post-manufacture and clearance of goods, cannot be held responsible for duty demands predating their ownership without involving the actual manufacturer.

7. Trade practices and government-fixed tolerance limits:
Recognizing the trade practice of a "Bakers Dozen" and the importance of accepted norms in determining consignment weight, the Tribunal directed the Assistant Commissioner to consider trade practices and government-set tolerance limits to reevaluate any undercharges, setting aside the previous findings for a fresh determination.

8. Remand for de novo adjudication:
In light of the above analysis, the Tribunal allowed the appeal for remand, directing the Assistant Commissioner to conduct a fresh assessment considering the legal provisions, trade practices, and tolerance limits to ensure accurate determination of excise duty liability.

This comprehensive analysis of the judgment delves into the intricate legal and factual aspects of the case, addressing each issue raised and providing a detailed breakdown of the Tribunal's findings and directives for further adjudication.

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