2008 (7) TMI 203 - AT - Central Excise

Tribunal Upholds Duty Demands on Hydrogen & Helium, Imposes Penalties

GOYAL MG GASES PVT. LTD. Versus COMMISSIONER OF C. EX., GHAZIABAD

The Tribunal upheld duty demands on hydrogen trolleys and helium quads, confirming penalties totaling Rs. 1,29,66,911. A penalty of Rs. 2,50,000 on the ... Demands - hydrogen trolleys and helium quads - department makes a submission that the cylinders were fitted in the premises of the appellant and hence the manufacture of hydrogen trolleys, helium quads by the appellant is proved – no evidence to dispute that impugned structures were mfd. by job-worker - Even otherwise mere fitting of cylinders in the slots meant for them and testing will not amount to manufacture - question of adding the value of cylinders to determine the value does not arise Issues:1. Duty demand on hydrogen trolleys and helium quads.2. Imposition of penalty on the Vice-President.3. Denial of Modvat credit on diverted tanks.4. Clearance of raw materials and components.5. Clearance of LP/HP vaporizers.6. Clearance of pressure building coils.7. Clearance of gas filling spares.8. Classification and manufacturing of hydrogen trolleys and helium quads.9. Inclusion of cylinder value in assessing trolleys and quads.10. Imposition of penalties and reduction for lack of evidence of duty evasion.1. Duty Demand on Hydrogen Trolleys and Helium Quads:The case involved duty demands on hydrogen trolleys and helium quads due to alleged non-payment after completion of manufacturing processes. The Commissioner confirmed a total demand of Rs. 1,29,66,911 and imposed penalties. The appellant argued that activities were carried out by job workers, some exempt from duty, and disputed the Commissioner's findings based on presumption.2. Imposition of Penalty on the Vice-President:A penalty of Rs. 2,50,000 was imposed on the Vice-President of the appellant-company. The appellant contended that penalties were not justified as there was no intention to evade duty, attributing discrepancies to accounting errors and lack of reconciliation.3. Denial of Modvat Credit on Diverted Tanks:The appellant admitted liability for diverted tanks and cleared gas filling spares but sought to set aside penalties. The Tribunal upheld the demand for tanks and spares, emphasizing the importance of proper documentation and compliance.4. Clearance of Raw Materials and Components:Issues related to the clearance of raw materials and components were raised, with the Department confirming demands based on discrepancies in duty payments and documentation. The Tribunal upheld the Department's findings, stressing the need for accurate record-keeping and compliance with excise regulations.5. Clearance of LP/HP Vaporizers:The appellant's contentions regarding the clearance of LP/HP vaporizers were refuted by the Department, leading to the confirmation of the duty demand. Lack of evidence regarding the consignment's history and duty payments resulted in the Tribunal upholding the demand.6. Clearance of Pressure Building Coils:Disputes arose over the clearance of pressure building coils, with the Department asserting separate clearance and pricing, contrary to the appellant's claims. The Tribunal upheld the Department's findings, emphasizing the importance of substantiated evidence in excise matters.7. Clearance of Gas Filling Spares:Issues concerning the clearance of gas filling spares were addressed, with the Tribunal confirming the demand and stressing the appellant's admission of liability. Proper documentation and compliance were highlighted as crucial aspects in excise duty assessments.8. Classification and Manufacturing of Hydrogen Trolleys and Helium Quads:The core issue revolved around the classification and manufacturing of hydrogen trolleys and helium quads. The Tribunal examined evidence from both sides, concluding that the burden of proof lay with the Department. Lack of conclusive evidence led to the Tribunal accepting the appellant's claims regarding job workers' involvement in manufacturing.9. Inclusion of Cylinder Value in Assessing Trolleys and Quads:The Department argued for including cylinder values in assessing hydrogen trolleys and helium quads, emphasizing the essential character imparted by cylinders. However, the Tribunal found no evidence of manufacturing by the appellant, rendering the question of cylinder value inclusion irrelevant.10. Imposition of Penalties and Reduction for Lack of Evidence of Duty Evasion:Regarding penalties, the Tribunal acknowledged discrepancies as accounting errors rather than deliberate duty evasion. The penalty on the company was reduced to Rs. one lakh, citing leniency due to lack of evidence of clandestine activities. Individual penalties were set aside for lack of grounds.This comprehensive analysis of the judgment covers all the issues involved, providing detailed insights into the legal proceedings and outcomes.