2007 (8) TMI 130 - AT - Central Excise

Appellate tribunal rules in favor of Pan Masala manufacturer in duty short-levy case

DINESH POUCHES LTD. Versus COMMISSIONER OF C. EX., JAIPUR

DINESH POUCHES LTD. Versus COMMISSIONER OF C. EX., JAIPUR - 2007 (218) E.L.T. 539 (Tri. - Del.) Issues:1. Assessment based on ex-factory price vs. consignment basis2. Change in legal provisions regarding 'place of removal'3. Short payment of duty and imposition of penalties4. Contention on merit and limitation5. Production of sale invoices to support contentionsAnalysis:The appellant, a manufacturer of Pan Masala and Gutka subject to Central Excise Duty, faced a demand alleging duty short-levy due to a change in legal provisions regarding the 'place of removal.' The demand claimed a duty shortfall of approximately Rs. 1.3 lakhs for a specific period. The appellant disputed the demand both on merit and limitation grounds. On merit, the appellant argued that duty quantification was incorrect, highlighting issues such as freight relief, cum-duty valuation, and all sales from C&F agents' premises not being considered. The appellant also contended that assessments during the relevant period were a continuation of past practices, and there was no intention to evade duty, thus challenging the applicability of Section 11A.Both the adjudicating authority and the first appellate authority rejected the appellant's contentions, noting the absence of supporting sale invoices. However, upon review, it was found that the lower authorities' findings were contrary to the record. The appellant had submitted all invoices and a detailed chart of the freight element, indicating that the appellant's claim of excess duty payment was not unfounded. Additionally, the contention regarding limitation was analyzed in light of the factual situation. It was concluded that the appellant's assessment practice did not result in significant revenue loss, indicating no intent to evade duty. The data presented suggested no duty evasion, attributing the notice to inadequate consideration of facts and law.Consequently, the appellate tribunal set aside the impugned orders, allowing the appeals in favor of the appellant. The decision highlighted that there was no justification for finding an intention to evade duty and that the notice stemmed from improper evaluation of relevant facts and legal aspects. The appellant was granted consequential relief based on the findings, emphasizing the importance of accurate assessment and compliance with legal provisions.