HIRAKUD INDUSTRIAL WORKS Vs. CCE

JUDGEMENT

(1.) THIS appeal of the assessee is against order dated 28.2.94 of the Collector of Central Excise in adjudication of a show -cause notice dated 12.4.91 and its corrigendum dated 21.4.93. The appellants are aggrieved by the demand of Central Excise duty of Rs. 1,80,621.52 confirmed against them and the penalty of Rs. 20,000 imposed on them.

(2.) THE appellants are a unit of the Industrial Development Corporation of Orissa Ltd., with their factory at Hirakud. During the periods of dispute (1.4.86 to 30.9.87 and 1.3.88 to 31.12.89), they had removed certain structural materials from their factory without payment of duty to the sites of their customer viz. the Orissa State Electricity Board for the purpose of construction of transmission towers etc. They had also removed bearing boxes likewise during those periods. The department, by show -cause notice dated 12.4.91 answerable to the Additional Collector of Central Excise, proposed to levy duty of excise on the structural items and bearing boxes, alleging that the structural items and bearing boxes were chargeable to duty of excise under Chapter 73 and Chapter 84 respectively of the CET Schedule. It raised a demand of duty of Rs. 1,92,982.64 on the appellants, invoking the extended period of limitation under the provision to Section 11 A(1) of the Central Excise Act for which it was alleged that the appellants had suppressed production and removal of excisable goods with intent to evade payment of duty. Later on, by a corrigendum, the show cause notice was made answerable to the Collector of Central Excise. In their letters dated 17.10.91 and 25.5.93, the appellants denied the department's allegations and took the stand that the subject items were not chargeable to duty. They also raised alternative grounds for challenging the demand of duty. These included the plea of limitation. They also objected to the value addition made by the Collector. In adjudication of the dispute, the Collector confirmed the demand of duty to the extent of Rs. 1,80,621.52 against the appellants after deducting an amount of Rs. 12,361.12 from the amount demanded in the show -cause notice. The deduction was of the duty demanded on materials which were found to be covered by two gate passes evidencing payment of duty. The Commissioner also imposed a penalty of Rs. 20,000.00 on the appellants under Rule 173Q.

(3.) EXAMINED the records. The description of the items removed by the appellants without payment of duty during the period of dispute, the Tariff enteries whereunder the department held those items to be classifiable, the quantities removed, the value of the items as valued by the department and the duty allegedly payable on such values are as under: <FRM>JUDGEMENT_200_LAWS(CE)12_2002.html</FRM>