DATAFIELD INDIA LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ONE of these appeals is by the assessee (100% EOU) and the other by the Revenue, both against an order of the Commissioner. In the impugned order, ld. Commissioner demanded duty of Rs. 10,85,732/ -from the assessee for the period October 1994 to June 1999 in adjudication of a show -cause notice dated 10.6.99. He also confiscated certain quantities of waste under Rules 173Q and 226 of the Central Excise Rules, 1944 with option for redemption against payment of a fine of Rs. 1000/ -. The Commissioner also imposed penalty equal to duty on the assessee under Section 11AC of the Central Excise Act and Rules 9(2), 173Q and 226 of the Central Excise Rules. The assessee's appeal is against the above order of the Commissioner. The contention of the Revenue, raised in Appeal No. E/263/01, is that the adjudicating authority erred in granting the benefit of Section 4(4)(d)(ii) of the Central Excise Act to the assessee while computing the demand of duty.

(2.) AFTER examining the records and hearing both sides, we note that the assessee never questioned excisability of the goods before the lower authority. In the present appeal, however, they have made a feeble claim that the subject commodity was not excisable. The item is telephone cable (seconds), which was disposed of by the assessee during the period of dispute at throwaway price. These sales were made under cover of statutory invoices, which indicated payment of duty on the sale price. Investigations conducted by the Department revealed that the assessee had received from their buyers amounts in excess of what were mentioned in the above invoices. Officials of the company, in their statements, admitted this fact. The statement of accounts recovered by the Department from the assessee's premises and similar statements recovered from a former General Manager of the company indicated collection of extra amounts by the assessee from their buyers. The above statements also indicated that the assessee had procured raw materials duty -free and diverted the same without payment of duty. On the basis of the investigative results, the Department issued a show -cause notice invoking larger period of limitation and demanding differential duty of over Rs. 29.59 lakhs from the assessee, and proposing penalties on them under Section 11AC of the Act and under the Central Excise Rules, The demand was contested. The impugned order was passed in adjudication of this dispute.

(3.) AFTER perusal of some of the relevant invoices, under which the subject clearances were made during the period of dispute, we find that the assessee paid duty on the value of goods mentioned in these invoices. From the record of evidence in this case, it appears that the appellants admitted that they had collected additional amounts from their buyers and had not paid duty thereon. They also admitted diversion of raw materials without payment of duty. The assessee claimed before the adjudicating authority the benefit of Section 4(4)(d) (ii) of the Act in respect of the cables (seconds). They themselves worked out the deductions and submitted a worksheet to the Commissioner covering the period of dispute. This worksheet mentioned a total amount of duty of Rs. 9,00,760.63 as payable by the assessee. Ld. Commissioner accepted this worksheet after holding that the assessee was eligible for the benefit of Section 4(4)(d)(ii). However, his order demanded a higher amount of duty from the assessee. At this stage, the assessee can be aggrieved only by this discrepancy found in the impugned order as regards the quantum of duty payable by them. However, the assessee is seriously challenging the penalty imposed on them. It is submitted that a composite penalty was imposed under Section 11AC and various provisions of the Central Excise Rules without any break -up. It is submitted that Section 11AC was not in force during a major part of the period of dispute and, therefore, penalty equal to the entire amount of duty cannot be sustained. Ld. Counsel has reiterated these grounds of the assessee's appeal and has prayed for vacating the penalty. Ld. SDR has reiterated the grievance of the Revenue, which is against grant of the benefit of Section 4(4)(d)(ii) to the assessee. That, in cases of this nature, the sale price of the goods should be treated as cum -duty price and abatement of duty from such price should be allowed in determination of assessable value is a legal position well -settled by now and the same is no longer amenable to challenge. Hence, at the outset, the Revenue's appeal is dismissed.