2019 (5) TMI 970 - AT - Central Excise

Extended period of limitation - excess deduction on account of quantity discount - penalty - suppression of facts - HELD THAT - The Tribunal directed the Adjudicating authority to re-calculate the demand by adding the quantum of discount not passed on to sale price of the goods. Since suppression of facts has been confirmed and the demand for the extended period of limitation has been upheld, therefore, there are no reason in the argument of the learned Advocate that penalty under Section 11AC of Central Excise Act, 1944 should not have been imposed. Appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against OIO No.36/CEX/2008 passed by CCE Nasik
- Admissibility of quantity discount not passed on to the customer
- Re-calculation of duty and penalty

Analysis:
1. The appeal was filed against OIO No.36/CEX/2008 passed by the CCE Nasik. The Appellants were engaged in the manufacture of goods under Chapter 42 and 92 of the Central Excise Act, 1944. Allegations were made that they availed excess deduction on account of quantity discount for the period from May 1996 to June 2000, leading to a demand of duty amounting to &8377; 74,82,028. The Tribunal confirmed the inadmissibility of the quantity discount not passed on to the customer and directed the re-calculation of the assessable value for the extended period.

2. The Appellant contended that the Tribunal's remand order did not include any direction on penalty, making the Adjudicating authority's penalty imposition unlawful. On the contrary, the Revenue argued that the demand was justified due to suppression of facts for the mentioned period. The Tribunal upheld the demand on merit and limitation, leading to the re-computation of the demand by the Adjudicating authority, including the quantity discount not passed on to the sale price of goods.

3. After careful consideration, the Tribunal found that the demand was upheld on merit and limitation for not passing on the quantity discount to the customer. As suppression of facts was confirmed and the demand for the extended period was justified, the Tribunal saw no reason to reject the penalty imposition under Section 11AC of the Central Excise Act, 1944. Consequently, the Tribunal confirmed the Adjudicating authority's order and dismissed the appeal.

4. In conclusion, the Tribunal upheld the demand for duty re-calculation and penalty imposition, based on the inadmissibility of quantity discount not passed on to the customer. The appeal was dismissed, affirming the Adjudicating authority's decision.