1993 (7) TMI 198 - AT - Central Excise

Tribunal Upholds Order with Penalty Reduction, Emphasizes Procedural Compliance

The Tribunal largely rejected the appeal, confirming the Additional Collector's Order-in-Original, except for reducing the penalty amount imposed under ... Value of clearances Issues Involved:1. Eligibility for exemption under Notification No. 80/80-C.E.2. Deductions from aggregate value of clearances.3. Classification and duty liability of parts of weighing machines.4. Inclusion of exempted goods in aggregate value.5. Seizure of goods.6. Imposition of penalty under Rule 173Q.Issue-wise Detailed Analysis:1. Eligibility for Exemption under Notification No. 80/80-C.E.:M/s. Kapoor Engg. Works exceeded the exemption limits specified under Notification No. 80/80-C.E. for the financial years 1980-81 and 1981-82. Their clearances of excisable goods under Item No. 45 and Item No. 68 surpassed Rs. 20 lakhs in 1980-81, disqualifying them from exemption in 1981-82. Additionally, clearances under Item No. 45 alone exceeded Rs. 5 lakhs in 1980-81, making them ineligible for exemption for the excess amount. The declarations were filed late, and no deductions were claimed initially.2. Deductions from Aggregate Value of Clearances:The party claimed deductions for packing and handling charges, supervision/erection charges, trading activities, exempted goods, and cancelled bills. The Additional Collector allowed only the deduction for repairing charges. The Tribunal upheld this decision, noting that the party did not claim any deductions initially and did not provide sufficient evidence for other deductions.3. Classification and Duty Liability of Parts of Weighing Machines:The appellants argued that parts of weighing machines should be exempt under Notification No. 310/77-C.E. However, the Tribunal found no mention of parts in their declaration or sales documents. The notification provided exemption only when parts were used in the production of weigh bridges in the same factory, not when cleared separately. The Tribunal concluded that parts were excisable and dutiable unless used in the production of weigh bridges within the factory.4. Inclusion of Exempted Goods in Aggregate Value:The appellants contended that exempted goods should not be included in the aggregate value of clearances. The Tribunal referred to the definition of 'excisable goods' under Section 2(d) of the Act, which includes goods specified in the Central Excise Tariff, even if exempt from duty. The Tribunal cited several precedents supporting the inclusion of exempted goods in the aggregate value for determining eligibility for exemptions.5. Seizure of Goods:The appellants argued that the seizure of goods was unwarranted. The Tribunal noted that the Additional Collector did not address the seized goods in his order. Consequently, the seized goods were released, and any duty liability related to them was excluded from the confirmed demand.6. Imposition of Penalty under Rule 173Q:The appellants were penalized Rs. 10,000 under Rule 173Q, although the Show Cause Notice did not reference this rule. The Tribunal acknowledged the Additional Collector's competence to impose the penalty but reduced the amount to Rs. 2,000 in the interest of justice.Conclusion:The appeal was largely rejected, with the Tribunal confirming the Order-in-Original of the Additional Collector, Central Excise, Meerut, except for reducing the penalty amount. The Tribunal emphasized adherence to procedural requirements and the importance of timely and accurate declarations for claiming exemptions and deductions.