1999 (8) TMI 141 - AT - Central Excise

Tribunal Decision on Central Excise Duty Assessment and Penalty Reduction

ESCORTS JCB LTD. Versus COMMISSIONER OF C. EX., NEW DELHI

The Tribunal upheld the assessment of Central Excise duty at Rs. 29,65,532 based on the value of goods at the buyer's premises. The imposition of duty ... Valuation (Central Excise) - 'Place of removal' - Demand - Limitation Issues involved: Assessment of Central Excise duty on the basis of goods sold, quantification of insurance charges, imposition of penalties under various provisions.Assessment of Central Excise Duty: The case involved the determination of the place where the property in the goods sold passed from the seller to the buyer. The Tribunal found that since the goods were insured by the seller until they reached the buyer's premises, the property did not pass at the factory gate but at the buyer's destination. Therefore, the value of the goods at the buyer's premises was held to be the basis for assessment under Section 4 of the Central Excise Act. The Commissioner's decision to impose duty amounting to Rs. 29,65,532 under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Act was upheld.Quantification of Insurance Charges: The Tribunal disagreed with the Department's view that the unused portion of insurance charges should be liable for excise duty. Citing a previous decision, it was held that collecting equalized insurance charges from all customers did not warrant duty on the differential amount. Therefore, the imposition of central excise duty amounting to Rs. 98,219 was set aside.Penalties Imposed: The appellant contested the penalty imposed under Section 11AC of the Act as excessive. The Tribunal acknowledged that while the section allows for a penalty equal to the duty determined, it is not mandatory to impose the maximum amount. Considering the circumstances, the penalty was reduced from Rs. 30,63,751 to Rs. 10 lakhs.Conclusion: The Tribunal confirmed the duty of Rs. 29,65,532 under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Act. The imposition of duty amounting to Rs. 98,219 was set aside, and the penalty under Section 11AC was reduced to Rs. 10 lakhs. The appeal was disposed of with the above modifications.