2002 (4) TMI 740 - AT - Central Excise

Tribunal overturns penalty and interest, orders recalculation of duty demand.

The Tribunal set aside the penalty and interest imposed, directing the Adjudicating Authority to recalculate the duty demand in accordance with the law, ... Valuation - Place of removal - Deductions - Demand - Limitation Issues involved:- Whether the demand of Central Excise duty is barred by limitationRs.- Whether the demand of duty has been calculated in accordance with the law laid down by the Supreme Court in M.R.F. caseRs.Analysis:Issue 1: Demand of Central Excise duty barred by limitationThe Appellant argued that the duty demand for the period from 1-10-96 to 1-8-99, issued on 3-1-2001, was based on their understanding of the law at the time. They contended that the allegations of under-invoicing and suppression to evade duty were unsupported by evidence. The Appellant referenced Circulars and legal precedents to support their position that there was no intent to evade duty. The Appellant also highlighted discrepancies in the calculation of duty, proposing an alternate method for determining the duty amount demandable.Issue 2: Calculation of duty in accordance with M.R.F. caseThe Respondent argued that the duty demand was not time-barred as the Appellant did not disclose the actual place of removal where goods were delivered to buyers. The Respondent contended that the Appellant's claim of deductions for freight and insurance expenses was inadmissible as the place of removal was deemed to be the destination of the buyers. The Respondent maintained that the Appellant suppressed facts with intent to evade duty. The Tribunal clarified the definition of 'place of removal' under Section 4(4)(b) and emphasized that the Appellant's belief based on Section 4(2) was unfounded. The Tribunal agreed with the Respondent that the extended period of limitation was applicable due to non-disclosure of the actual place of removal. However, the Tribunal found merit in the Appellant's argument regarding the incorrect quantification of duty and remanded the matter for re-computation in line with legal provisions and Supreme Court guidelines.In conclusion, the Tribunal disposed of the appeal by setting aside the penalty and interest imposed, directing the Adjudicating Authority to recalculate the duty demand in accordance with the law, while retaining the discretion to impose penalty and interest as deemed appropriate.