2004 (9) TMI 224 - AT - Central Excise

Tribunal remands duty demand case for re-quantification

MEK SLOTTED ANGLES (INDIA) LTD. Versus COMMISSIONER OF C. EX., BELAPUR

The Tribunal allowed the appeal by remanding the case to the adjudicating Commissioner for re-quantifying the duty demand on the complete furniture ... Demand - Valuation (Central Excise) - Limitation Issues:1. Duty liability on goods manufactured and cleared by the appellants.2. Applicability of extended period for raising demands.3. Misdeclaration of goods by the appellants.4. Assessment of duty on complete furniture inclusive of various components.5. Validity of the extended period for demanding duty.Analysis:1. The case involved the duty liability of the appellants on the goods they manufactured and cleared, including parts obtained from outside for final assembly at the customer's site. The Commissioner confirmed a duty amount, considering the value of bought out items and fabrication costs at the customer's site. The appellants argued that the show cause notice issued was time-barred except for a specific period, and the extended period was not applicable beyond that.2. The department contended that the extended period was justified due to the appellants' misdeclaration of goods and willful suppression of facts regarding the manufacture and supply of furniture at the customer's site. However, the Tribunal noted that the department was aware of the appellants' activities based on earlier proceedings and sale contracts scrutiny. Consequently, the Tribunal found the appellants had a valid ground to challenge the extended period's applicability in this case.3. After considering both sides and reviewing the case records, the Tribunal concluded that the appellants were liable to pay duty on the complete furniture, including the value of parts made by them, bought out items, and assembling charges. Nevertheless, due to the department's prior knowledge of the appellants' operations, the Tribunal held that the extended period for demanding duty was not entirely justified in this instance.4. As a result, the Tribunal set aside the impugned order and remanded the matter to the adjudicating Commissioner for re-quantifying the duty demand based on the entire value of the furniture supplied within the normal period of limitation. The appellants were granted a reasonable opportunity to present their case before a fresh order was passed.5. Ultimately, the appeal was allowed by way of remand, providing the appellants with a chance to address the duty liability issue within the appropriate timeframe and under fair circumstances.