FLASH FORGE LTD. Vs. COMMISSIONER OF CENTRAL

JUDGEMENT

(1.) THIS appeal arises from OIA No. 164/05 CE dated 30th December 05 by which the Commissioner (Appeals) Visak has confirmed OIO No. 90/03 -04 dated 30th March 04 passed by Additional Commissioner of Central Excise. He has modified the Additional Commissioner's order only to the extent of reducing the redemption fine of seized goods to Rs. 15 lakhs. The Order is under challenge. The Original Authority confirmed demands of Rs. 13,51,828/ - in terms of proviso to Section 11A(1) of Central Excise Act, 1944 read with Rule 12 and 9 of CE Rules. He has also imposed like sum as penalty under Section 11AC of Central Excise Act. The goods were also seized and released on redemption fine. There are also penalties imposed in the matter which has been confirmed by the Commissioner (Appeals).

(2.) THE brief facts are that the appellants are manufacturers of pipe fitting and forging falling under Chapter Sub -heading No 7307.00 and 7308.90 of Central Excise Tariff Act, 1985 and were availing SSI exemption from payment of whole of duty of excise for clearances up to rupees Rs one crore. The department on information and on investigation found that the appellants had not reversed/paid the amount equivalent to Cenvat credit on inputs lying in stock and inputs contained in finished and semi -finished goods lying in stock as on 1.3.03, therefore, the goods were seized and proceedings were initiated. The entire seized documents have been examined by both the authorities and the allegation made in the show cause notice with regard to non -reversal of Cenvat credit on the inputs has been confirmed. The appellants have filed miscellaneous application raising legal grounds.

(3.) WE have heard both sides on this miscellaneous application and seen the reply filed by the Commissioner. The counsel contends that the grounds are legal in nature in as much as they were eligible for the benefit of time bar as there was no suppression of facts and the details were recorded in the RT 12 returns. Learned Counsel submits that the demands are within time but as there was no suppression of facts, the question of imposing like sum as penalty under Section 11AC of the Act does not arise. He also contends that confiscation was not required to be done, as there was no violation of any Central Excise rules. The question of applying Section 25 of the CE rules does not apply as the contravention pertains to Cenvat Credit rules.