2017 (12) TMI 1245 - AT - Central Excise

Demand of differential duty due to wrong calculation - intent to evade - extended period of limitation - Held that - the differential duty demand was raised only due to difference in calculation for value as per CAS-4. This is not a case of clearance without payment of duty. The issue involved is only a calculation on value therefore it cannot be said that the appellant had any malafide intention with intent to evade payment of duty - the demand for the extended period, penalty and interest corresponding to the said demand is set aside - adjudicating authority is free to recalculate the duty if any arise for the normal period and recover for forthwith - appeal allowed by way of remand.

Summary

Issues:
1. Discrepancy in duty payment calculation leading to short payment of duty.
2. Confirmation of duty, education cess, and interest by adjudicating authority.
3. Appeal filed disputing the confirmed amount and penalties imposed.

Analysis:
Issue 1: The appellant cleared goods between July 2000 to January 2005 based on the assessable value calculated under Rule 8 of Central Excise Valuation Rules, 2000. A discrepancy in CAS-4 led to a short payment of duty. Upon audit, the appellant paid the entire duty amount. The adjudicating authority confirmed duty, education cess, and interest, albeit at a lower amount than initially proposed in the show cause notice.

Issue 2: The Commissioner (Appeals) upheld a balance amount of duty, interest, and imposed a penalty, leading to the appellant's appeal. The appellant argued that the discrepancy was a calculation error, not a case of clandestine removal, as they paid duty based on cost construction method without any intention to evade payment. The Commissioner (Appeals) also acknowledged the lack of malafide intention on the appellant's part.

Issue 3: The Tribunal noted that the differential duty demand arose due to a mere difference in calculation under CAS-4, not clearance without payment. Given the absence of malafide intention and the Commissioner's findings, the Tribunal set aside the extended period demand, penalty, and interest. The Tribunal allowed the appeal partially, directing the recalculation of duty for the normal period, if applicable, and recovery thereof.

In conclusion, the Tribunal's judgment favored the appellant, emphasizing the absence of malafide intention and the erroneous nature of the duty calculation discrepancy. The decision highlighted the importance of intent in excise duty matters and set aside the extended period demand, penalties, and interest, modifying the impugned order accordingly.