2010 (11) TMI 586 - AT - Central Excise

Appellant company's appeal dismissed, upholding duty demands, penalties, and confiscation orders for misdeclared MRP on CTVs.

ONIDA SAKA LTD. Versus COMMISSIONER OF C. EX., NOIDA

The Tribunal dismissed the appeals and upheld duty demands, interest, penalties, and confiscation orders against the appellant company for misdeclaration ... Evasion of duty - Mis-declaration of MRP - Search and seizure - stock taking had been conducted in presence of Shri Ashok Chawla, Senior Manager (Finance & Accounts) and at that time, he admitted the shortage and debited the duty on the spot in the PLA and RG.23A Part-II Register - In view of this, the appellant’s plea that there was no shortage is totally un-acceptable. Regarding demand of Rs. 17,04,388 - it is clear that in respect of certain models of CTVs, though lower MRP had been declared to the central excise department under exchange scheme, those models were never sold under that exchange scheme at lower prices but were sold at the usual higher price, even though the assessable value for payment of duty had been determined on the basis of lower MRP and the appellant company had knowledge about this - there was no provision in Section 4A for enhancing the declared MRP, if the same was not found to be correct, it does not mean that during that period, an assessee coming within the purview of Section 4A was free to declare any false MRP and evade the duty, as it is well settled law that nobody can be allowed benefit from his wrong doing - Appeal are dismissed Issues Involved:1. Recovery of short-paid duty due to misdeclaration of MRP.2. Recovery of central excise duty on CTVs found short during stock taking.3. Imposition of interest under Section 11AB of the Central Excise Act.4. Imposition of penalties under various sections of the Central Excise Act and Rules.5. Confiscation of land, building, plant, and machinery.Detailed Analysis:1. Recovery of short-paid duty due to misdeclaration of MRP:The core issue revolves around the misdeclaration of Maximum Retail Price (MRP) by the appellant company for certain models of Onida brand Colour Television Sets (CTVs) manufactured and marketed by MIRC Electronics Ltd. (MEL). The Department alleged that the appellants declared a lower MRP under an exchange scheme but sold the CTVs at higher MRPs without any actual exchange of old TVs. The evidence supporting this allegation included statements from various officers and employees of the appellant company, MEL, and their distributors and dealers. These statements, which were not retracted, confirmed that the CTVs were sold at higher prices while declaring lower MRPs to the Central Excise Department. The Tribunal upheld the duty demand of Rs. 17,04,388/- and associated penalties, stating that the appellant company was aware of the misdeclaration and benefitted from it.2. Recovery of central excise duty on CTVs found short during stock taking:During a search conducted on 10-12-98, 141 CTVs were found short compared to the recorded balance in the RG-I Register, leading to a central excise duty demand of Rs. 1,54,575/-. The appellant's Senior Manager (Finance & Accounts) admitted the shortage and debited the duty on the spot. The Tribunal found no explanation for the shortage and upheld the duty demand, rejecting the appellant's plea that there was no shortage.3. Imposition of interest under Section 11AB of the Central Excise Act:The Tribunal upheld the imposition of interest on the short-paid duty amounting to Rs. 17,04,388/- under Section 11AB of the Central Excise Act. This was in line with the confirmation of the duty demand due to the misdeclaration of MRP.4. Imposition of penalties under various sections of the Central Excise Act and Rules:Penalties were imposed on the appellant company and individuals associated with MEL under Section 11AC of the Central Excise Act and Rule 209A of the Central Excise Rules, 1944. The Tribunal upheld these penalties, citing the clear evidence of misdeclaration and the appellant company's awareness and involvement in the scheme.5. Confiscation of land, building, plant, and machinery:The Tribunal also upheld the confiscation of land, building, plant, and machinery used in the manufacture of the excisable goods under Rule 173Q(2) of the Central Excise Rules, 1944, with an option to redeem the confiscated property on payment of a redemption fine of Rs. 5 Lakh.Conclusion:The appeals were dismissed, and the Tribunal upheld the duty demands, interest, penalties, and confiscation orders. The evidence, including unretracted statements from various involved parties, supported the findings of misdeclaration of MRP and the resultant evasion of central excise duty. The appellant's arguments were found unconvincing, and the Tribunal affirmed the orders of the lower authorities.