1990 (8) TMI 257 - AT - Central Excise

Appeal allowed, duty demand unjustified due to lack of comparability. Time-barred and penalty set aside.

The tribunal allowed the appeal, setting aside the duty demand as unjustified due to the lack of comparability between Sodium Silicate purchased from ... Value of comparable goods Issues:(i) Whether the price of Sodium Silicate charged by other manufacturers is comparable to that manufactured and used captively by the appellants.(ii) Whether the demand of duty for the period specified in the show cause notice is time-barred.(iii) Whether the penalty imposed on the appellants can be upheld in the absence of a proposal in the show cause notice.Analysis:Issue (i):The appellants argued that the Sodium Silicate purchased from other manufacturers cannot be considered comparable to their captively manufactured Sodium Silicate due to significant differences in quality, manufacturing process, and other factors. They emphasized that the burden to prove comparability lies with the department, and no analytical data was provided to establish comparability. The tribunal agreed, stating that all relevant differences should be recognized and adjusted in the value of goods. As the Collector did not consider these differences and solely relied on the price of Sodium Silicate from other manufacturers, the duty demand was deemed unjustified.Issue (ii):Regarding the time-bar of the duty demand, the appellants contended that there was no wilful misstatement or suppression of facts on their part. They highlighted that the department could have easily verified the price differences if necessary. The tribunal noted that the absence of a definition for comparable goods means the appellants couldn't be expected to know about comparability. As the charge of suppression or misstatement of facts was not substantiated, the demand was deemed time-barred, especially as the corrigendum to the show cause notice was issued beyond the statutory period.Issue (iii):The appellants argued that the penalty imposed was illegal as there was no proposal for it in the amended show cause notice. The tribunal agreed, setting aside the penalty as there was no mention of it in the notice. The absence of a proposal for the penalty rendered its imposition unlawful.In conclusion, the tribunal allowed the appeal, setting aside the impugned order and providing consequential relief to the appellants based on the findings on the issues discussed.