2004 (7) TMI 607 - AT - Central Excise

Successful appeal on Order-in-Appeal confirming Order-in-Original due to no intention to suppress facts

The appeal challenging the Order-in-Appeal confirming the Order-in-Original was successful. The Tribunal found that there was no intention to suppress ... Demand and penalty - Limitation Issues:Challenge to Order-in-Appeal confirming Order-in-Original; Inclusion of input value in final goods; Penalty imposition; Suppression of facts; Extended period invocation; Applicability of precedent judgments.Analysis:The appeal challenged the Order-in-Appeal confirming the Order-in-Original, where the appellants were accused of not including the value of inputs from a specific entity in the assessable value of final goods manufactured on a job work basis, leading to penalty imposition.The appellant's counsel argued against confirming demands on an extended period, citing lack of suppression and full disclosure of details to the Department. Reference was made to the Modvat credit entitlement if duty had been paid, emphasizing revenue neutrality and absence of intent to evade duty, questioning the sustainability of the penalty under section 11AC.The JDR relied on the Additional Commissioner's findings on suppression of facts, countered by the appellant's submission of a working sheet indicating a limited amount willing to be discharged, disputing the need for an extended period invocation.Upon careful consideration, it was observed that the Department had verified records and documents, including declarations and registers, showing receipt of inputs and payment of duty, making it clear that there was no intention to suppress facts. Precedent judgments, like the one in Amco Batteries Ltd., were cited to support the argument that in the absence of suppression, the larger period invocation and penalty under section 11AC were not sustainable.The Tribunal referenced the Apex Court's observations on the need for positive evidence of suppression to invoke extended periods, emphasizing the lack of fraudulent intent or willful misstatement in this case. Consequently, the demands invoking a larger period were set aside, and the penalty under section 11AC was annulled, directing a reevaluation of duty liability for a six-month period only.In conclusion, the appeal was allowed by remand for reassessment based on the terms outlined, emphasizing the absence of suppression in evading duty and the necessity to determine duty liability for a limited period.This detailed analysis of the judgment highlights the key legal issues addressed, arguments presented, and the Tribunal's reasoning leading to the final decision.