2004 (5) TMI 471

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....hich had invoked the extended period of limitation under the Proviso to Section 11A(1) of the Central Excise Act, 1944. A major part of the demand is on account of enhancement of value of the goods and the remaining part (amounting to Rs. 1.6 lakhs) on account of denial of SSI exemption. There is also a penalty of equal amount on the appellants under Section 11AC of the Act, which is based on a finding of suppression of facts. 2. We have heard both sides. It appears from the records and submissions that the demand is on the goods cleared by the appellants to M/s. Widia (India) Ltd., (M/s. WIL). The tool tips required for the manufacture of the final product (tools) had been supplied by M/s. WIL and, in that transaction, a discount t....

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....o Versat is much lower as compared to the price charged to wholesale buyer (i.e., one fifth of the price) Price charged by Widia to the appellants is lower. (To others 24% discount and to the appellants 58% discount). Versat manufactured Microphones using the "Microphone capsules" purchased from AKG. Appellants manufactured Brazed Tools using the "Tool tips" purchased from Widia. Microphones were manufactured with the brand name of AKG. Brazed tools were manufactured with the brand name of Widia. Alleged that Versat supplied Microphones at a depressed value to AKG in view of purchase of "microphone capsules" from AKG. Alleged that appellants supplied Brazed Tools at a depressed value to Widia in view of purchase of "Too....

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....ppressed by the appellants and, if so, how? The necessary finding of suppression of facts, based on evidence and reasoning, is conspicuously missing in the impugned order. On account of this, a major part of the demand of duty prima facie appears to be hit by time-bar. For the same reason, the appellants seem to have a strong case against penalty as well inasmuch as the penalty of equal amount imposed under Section 11AC is also squarely based on suppression. 4. In the result, the appellants have established a strong prima facie case warranting full waiver of pre-deposit and stay of recovery in respect of the penalty as well as the duty computed on the differential value of the goods. As far as the demand of duty based on denial of S....