1997 (4) TMI 153 - AT - Central Excise

Tribunal rules in favor of appellant in duty dispute appeal

PATSON TRANSFORMERS (P) LTD. Versus COLLECTOR OF C. EX., BARODA

The Tribunal ruled in favor of the appellant in an appeal against the Additional Collector's confirmation of a demand for differential duty. The dispute ... Demand - Limitation - Valuation Issues:1. Appeal against confirmation of demand of differential duty by Additional Collector of Central Excise.2. Dispute regarding clearances of active parts of transformers between two units of the same company.3. Allegations of suppression of facts and evasion of duty.4. Interpretation of Notification 118/75 and Notification 120/75.5. Jurisdiction of Additional Collector to issue a fresh show cause notice.Analysis:1. The appeal was filed against the Additional Collector's order confirming a demand for differential duty raised in a show cause notice. The dispute involved the clearance of active parts of transformers between two units of the same company, with the Assistant Collector alleging sales to related persons and misuse of Notification 120/75 for lower pricing.2. The issue of suppression of facts and evasion of duty was raised, with the Assistant Collector alleging that the appellant cleared goods at lower prices to evade duty. The appellant contested these allegations, arguing that the show cause notice was barred by time as it pertained to a period beyond six months prior to the notice.3. The Additional Collector held that the benefit of Notification 120/75 could not have been availed for clearances between the two units. However, the Tribunal found that the appellant was entitled to the benefit of Notification 118/75, which exempted goods intended for use in another factory of the same manufacturer from excise duty.4. The Tribunal observed that the appellant had paid duty on the goods transferred between its units, despite being eligible for exemption under Notification 118/75. It was noted that the appellant had not evaded duty intentionally, as evidenced by the duty payments made and the set-off availed by the receiving unit.5. The Tribunal concluded that the show cause notice was time-barred and set aside the impugned order, allowing the appeal. It was held that there was no suppression of facts with the intention to evade duty, as the appellant had paid duty despite being eligible for exemption under Notification 118/75.In summary, the Tribunal ruled in favor of the appellant, finding that there was no intentional evasion of duty and that the show cause notice was barred by time.