2012 (7) TMI 842 - AT - Central Excise

Tribunal Upheld Duty & Penalty for Third-Party Inspection Charges

M/s. Liquid Controls India Pvt. Limited Versus Commissioner of Central Excise, Vadodara

The Tribunal upheld the duty and penalty imposed by the adjudicating authority, amounting to Rs. 3,16,808/-, due to non-inclusion of third-party ... Waiver of pre-deposit of duty - Demand of differential duty - Non inclusion of amount received or collected by assessee from third party inspection charges - Held that:- appellant herein did not produce any evidence substantiating this claim as regards third party inspection being done at the behest of their clients right from the adjudicating authority level to till today. It is also on record that the Range Officer Incharge of the appellant’s factory had specifically sought for these documents which were not provided by the appellant - appellant having not produced the documents before the lower authorities and claiming that he has got the documents needs to be gone in to details by adjudicating authority. To ensure that appellant appear and produce the documents in respect of the claim that inspection charges which are charged by them to their clients are on their special request, we find that appellant needs to be put to some condition - Conditional stay granted. Issues:- Stay petition for waiver of pre-deposit of duty and penalty- Non-inclusion of third-party inspection charges in duty calculation- Lack of evidence for inspection charges being client-requested- Requirement for appellant to produce documents- Direction for deposit and compliance by appellant- Adjudicating authority to decide on the caseAnalysis:The judgment pertains to a stay petition seeking the waiver of pre-deposit of duty and penalty amounting to Rs. 3,16,808/-, which were confirmed by the adjudicating authority and upheld by the first appellate authority. The differential duty was imposed due to non-payment of dues, specifically related to the appellant's failure to include amounts received from third-party inspection charges for their final products. The appellant argued that the inspection charges were based on client requests and were not mandatory, with service tax being paid on such amounts. However, the appellant failed to provide evidence supporting this claim at various levels of the proceedings. Consequently, the Tribunal directed the appellant to deposit Rs. 25,000/- and produce the necessary documents by a specified date for further consideration by the adjudicating authority.The Tribunal emphasized that it was not expressing any opinion on the case's merits and left all issues open for the adjudicating authority to decide. The decision to dispose of the stay petition and appeal was contingent upon the appellant's compliance with the deposit requirement and the subsequent production of documents. The judgment underscores the importance of substantiating claims with evidence and the need for procedural fairness in adjudicating such matters. Ultimately, the case was remanded to the adjudicating authority for a detailed examination based on the documents to be provided by the appellant, ensuring adherence to the principles of natural justice in the process.