MIDI EXTRUSIONS LTD. Vs. CCE

JUDGEMENT

(1.) In this appeal at the instance of the assessee challenge is against the order passed by Commissioner of Central Excise, Meerut affirming a duty demand of Rs. 28,95,935 under two different show cause notices dated 30.10.2000 and 9.8.2001 Penalty of equal amount imposed is also under challenge.

(2.) The appellant is engaged in the manufacture of aluminium extruded sections classifiable under Chapter sub -heading 7604.29 of the Central Excise Tariff Act, 1985. The allegation in the show cause notice dated 30.10.2000 was that the appellant had indulged in evading duty in association with M/s. WHITE Metals which according to the Revenue is allied company of the appellant. The allegation is that there are common shareholders and Directors in the two companies. The appellant purchases raw materials from M/s. White Metals and sells finished goods to them. It is alleged that the appellant had utilised Rs. 74,349.16 in the year 1997 -98 and Rs. 2 crores in 1998 -99 advanced by M/s. White Metals as interest free advance for working capital, that the invoices would show that prices charged from M/s. White Metals were comparatively lower than the prices charged from other buyers in respect of same kind of goods, that the price of M/s. White Metals was influenced by the interest free loan taken and, therefore, the price for M/s. White Metals was not the sole consideration of sale in terms of Section 4 of the Central Excise Act. It was, therefore, proposed that notional interest @ 18% per annum on the amount of loans taken by the appellant from M/s. White Metals will be included in the value of the goods and the appellant is liable to excise duty on this notional interest which came to Rs. 18,85,030. It was further alleged that the appellant had been collecting additional amount towards Dies Security from its buyers but the said amount was being not included in the value of goods manufactured with the help of such dies by the appellant. Payment for the dues was in addition to the price charged towards sale of the products. Therefore, it was proposed that aggregate amount of the money coming from buyers in the form of security would be included in the assessable value of the goods and duty on the same which amounts to Rs. 2,97,133 would be payable. The appellant had declared in the invoices that there is no flow back/additional consideration directly or indirectly from the buyers which was a mis -representation with intention to evade payment of duty and, therefore, extended period was sought to be invoked.

(3.) After the appellant submitted its reply to the show cause notice another show cause notice dated 9.8.2001 was served on it proposing to recover excise duty amounting to Rs. 7,13,772 for the period July 2000 to March 2001. Apart from interest under Section 11AB there was proposal to impose penalty under Rule 173 -Q read with Section 11 -AC. The appellant submitted its reply to the above show cause notice also.