EAST INDIA UDYOG LTD. Vs. CCE

JUDGEMENT

(1.) THIS application under Section 35F of the Central Excise Act, 1944, is heard afresh pursuant to the direction of the Hon'ble High Court contained in the order dated 11.8.2006, setting aside the earlier interim order of the Tribunal made on 20.6.2006 and remanding the matter back to the Tribunal to decide the application afresh in the light of the law laid down by the Hon'ble High Court of Allahabad in Civil Writ Petition No. 1219 of 2003 (I.T.C. Limited v. Commissioner (Appeals), Customs and Central Excise and Ors. decided on 23.10.2003.

(2.) THE applicant has challenged the order in appeal dated 27.12.2004 made by the Commissioner (Appeals) upholding the order -in -original of the Joint Commissioner (Adj.) made on 18.2.2003 by which demand of Central Excise duty amounting to Rs. 7,67,165/ - was confirmed under Section 11 -A of the Central Excise Act 1944, and penalty of the like amount was imposed on the appellant under Rule 173Q of the Rules of 1944 read with Section 11 -AC of the Act, with a direction to pay interest at the appropriate rate under Section 11 -AB of the Act.

(3.) THE appellant was engaged in the manufacture of transformers falling under sub -heading No. 8504 of the schedule to the Tariff Act. From the scrutiny of their records it transpired that the appellant had collected Rs. 35,98,220/ - on account of equalized freight and Rs. 11,96,563/ - by way of labour and painting charges which fact was neither declared by the appellant nor was the excise duty paid on these amounts. According to the Revenue, the amounts collected on account of equalized freight and labour and painting charges should have been included in the assessable value, in view of the amended provisions of Section 4 of the Central Excise Act, 1944 read with Central Excise Valuation (Determination of price of excisable goods) Rules, 2000. In reply to the show cause notice, the appellant contended that the transformers were to be supplied at various places within the State as per the terms and conditions of the purchase order at fixed price and in addition to that, the appellant was paid fixed freight amount for delivering the goods at the desired destinations, which freight amount was shown in the invoices. According to the assessee, it had not suppressed the information since it had followed the same practice and was not aware about the changes in the definition of transaction value, which was not even pointed out by any of the officer. It was contended that the audit party had noticed the record earlier and it cannot be said that the appellant had suppressed the information. It was also contended that assuming without admitting the alleged facts regarding scrutiny of record, since all the customers were government buyers, there could be no intention of non -payment of excise duty which were to be billed separately.