Tribunal upholds central excise duty demand, penalties, and interests for exceeding exemption limit

Kaneri Industries Versus Commissioner of Central Excise Kolhapur

Kaneri Industries Versus Commissioner of Central Excise Kolhapur - TMI Issues:
Challenge to order confirming demand of central excise duties, imposition of penalty, alleged manufacturing activities, exemption limit under notification, clubbing of total value of goods, clandestine clearances, reliance on statements, lapse of time between investigation and show cause notice, duty liability crystallization, failure to intimate production commencement, registration under Central Excise Rules, exclusion of portion from total clearance, reduced penalty privilege.

Analysis:

The appeal challenges the order confirming a demand of central excise duties, interest, and penalty imposed under the Central Excise Act, 1944. The dispute revolves around alleged manufacturing activities of 'CI castings' and 'motor vehicle parts' during 2007-08, exceeding the exemption limit specified in notification no. 8/2003-CE dated 1st March 2003. The appellant contends that until September 2007, they only supplied castings to job-workers, not engaging in manufacturing. Subsequently, they claim to have carried out machining on automobile parts. The appellant argues that the total value of goods for the entire year was incorrectly clubbed by lower authorities, pushing them beyond the exemption limit. The appellant highlights that the charges were based on allegations against other suppliers, which were set aside, and insists on excluding these values to reduce duty liability.

The appellant relies on legal precedents to challenge the enforceability of the demand. They argue that the time lapse between investigation completion and the issuance of a show cause notice is fatal to the proceedings. The appellant emphasizes that the lower authorities failed to consider this aspect, questioning the basis of the demand. However, the Authorized Representative contends that the duty liability was correctly determined based on admitted activities of the appellant. The failure to notify the commencement of production in September 2007 is highlighted, with authorities doubting the claim of no manufacturing activity before that date. The appellant's registration under Central Excise Rules post-investigation raises suspicions regarding the claim of non-manufacturing activities.

The Tribunal rejects the appellant's arguments, emphasizing the duty liability discharge with interest and the denial of reduced penalty privilege by lower authorities. The Tribunal upholds the duty demand and interest while extending the facility of reduced penalty under section 11AC(1)(d) of the Central Excise Act, 1944 to the appellant. The decision underscores the importance of compliance and evidence in challenging duty liabilities and penalties under the Central Excise Act, 1944.