2000 (11) TMI 1090 - AT - Central Excise

Summary

Issues:
- Appellants cleared parts of Cranes and machines on payment of duty at the rate leviable on complete machines.
- Demand of differential duty and penalty imposed on the appellants.
- Contention regarding clearing complete Cranes and Gangsaw machines.
- Interpretation of Circular No. 252/86/96-CX regarding removal procedure for consignments.

Analysis:
1. The appellants filed an appeal against the order-in-appeal dated 7-10-99 passed by the Commissioner (Appeals) regarding the clearance of parts of Cranes and Gangsaw machines at the duty rate applicable to complete machines. The demand for differential duty and imposition of a penalty of Rs. 5,000 were contested by the appellants.

2. The appellants argued that they were manufacturing complete Cranes and Gangsaw machines, which are bulky and transported in disassembled conditions for re-assembly at the site. They received orders for complete machines during the relevant period and cleared them under a consolidated invoice with different Challans. The contention was that duty should be levied on complete machines as they were clearing them as such.

3. The Revenue claimed that the appellants cleared parts of Cranes and Gangsaw machines separately, making them liable for duty as parts. Reference was made to Circular No. 252/86/96-CX, which outlines the procedure for the removal of consignments where complete machines are cleared in parts. It was argued that the appellants did not follow this procedure, justifying the demand for duty on machine parts.

4. The Tribunal analyzed the invoices and the show cause notice, noting that the goods were described as complete Cranes or Gangsaw machines. The Revenue had previously admitted that the appellants were clearing complete machines but in parts. Citing precedents, the Tribunal held that when complete machines are cleared in parts for transportation convenience and assembled at the site, they should be assessed as complete machines. Therefore, the demand for duty on parts was set aside.

5. Despite the favorable decision on the duty demand, the Tribunal upheld the penalty of Rs. 5,000 as the appellants did not follow the procedure outlined in Circular No. 252/86/96-CX. The appeal was disposed of with the duty demand being set aside, but the penalty being upheld due to non-compliance with the circular.

This detailed analysis of the judgment addresses the issues raised by the appellants regarding the duty demand and penalty imposition, the interpretation of the Circular for consignment removal, and the Tribunal's decision based on legal precedents and arguments presented by both parties.