2017 (2) TMI 1036 - AT - Central Excise

Benefit of N/N. 67/95-CE dt. 16.03.1995 - captive consumption - Department s claim that once invoice is raised to the customer, they were supposed to pay duty even if the goods were not removed from the factory - Held that - Benefit of N/N. 67/95-CE is available for capital goods when they are produced and used within the factory of production - In the instant case, the goods have been sold to M/s Ashok Leyland Ltd. and M/s Volvo India Pvt. Ltd. Since the goods have been sold by the appellants, the N/N. 67/95-CE, is not applicable. Extended period of limitation - Held that - there is positive act on the part of the assessee in form of raising debit notes, recovery of sales tax and raising self invoices without discharging duty thereon. These actions have never been disclosed to the Revenue Authorities. Hence, there is definitive element of suppression - the extended period has rightly being invoked for demanding the Central Excise Duty. Penalty - Held that - Since there was suppression of vital facts and filing of incorrect declaration under Rule 173B for wrongly availing the benefit of exemption 67/95-CE, the penalty under Section 11AC has been correctly imposed - As for the penalty under Rule 9(2) and Rule 173Q of Central Excise Rules, 1944 and Rule 25 of the Central Excise Rules, 2000, we find force in the contention of the appellants that two sets of penalties should not be imposed for the same contraventions. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Interpretation of notification No. 67/95-CE regarding payment of excise duty on dies retained for captive consumption.
2. Applicability of exemption under notification No. 67/95-CE to tools and dies sold to customers.
3. Invocation of extended period for demanding central excise duty.
4. Imposition of penalties under different provisions for the same contravention.

Analysis:
1. The appeal challenged the demand of &8377; 3,86,080/- confirmed by the Adjudicating Authority, along with interest and penalties, under Section 11AC and Section 173Q of Central Excise Rule, 1944. The appellant argued that the objection by the department regarding payment of duty on dies was contrary to notification No. 67/95-CE. The Tribunal found that the appellants raised invoices for dies sold to customers without discharging duty, giving the impression of captive consumption under the said notification. However, since the goods were sold to customers, the notification was deemed inapplicable. The authorities also noted the absence of evidence that the amortization cost of tools and dies was included in the cost of components, indicating non-payment of appropriate duty.

2. Regarding the case law cited by the appellant, the Tribunal differentiated it by highlighting that in the referenced case, the cost of moulds was included in the tools' cost, no debit notes were raised, and no sales tax was recovered. Consequently, the exemption under notification 67/95-CE was deemed inapplicable to the tools and dies sold by the appellants. The Tribunal upheld the Commissioner's decision in this regard.

3. The Tribunal addressed the invocation of the extended period for demanding central excise duty, citing a case where deliberate suppression of facts was absent, unlike in the present case where actions like raising debit notes and recovery of sales tax were not disclosed to the authorities. This lack of disclosure indicated suppression, justifying the extended period for demand.

4. Lastly, the Tribunal considered the imposition of penalties under different provisions for the same contravention. While upholding the penalty under Section 11AC for incorrect declaration and wrongful exemption availing, the Tribunal set aside the penalty imposed under other rules to avoid double penalization for the same offense.

In conclusion, the Tribunal modified the Commissioner's order, adjusting the penalties imposed and disposing of the appeal accordingly.