2002 (10) TMI 544 - AT - Central Excise

Summary

Issues:
1. Differential duty classification under Heading 7308.90 and Heading 8504.00.
2. Clubbing of clearances between two separate entities.
3. Imposition of personal penalty.

Analysis:

Issue 1: Differential Duty Classification
The appellants contested the differential duty imposed due to a change in classification from Heading 7308.90 to Heading 8504.00. They argued that their goods, Transformer Tank Fabrication, should attract the lower rate of duty of 15% ad valorem under Notification No. 160/86-C.E., as they are parts of transformers. The Tribunal agreed, citing the Collector of Customs v. OEM India Ltd. case to support that parts of a product are treated separately. Thus, the differential duty confirmation was set aside.

Issue 2: Clubbing of Clearances
Regarding the clubbing of clearances between the appellants' partnership firm and M/s. Weldone Fabricators Pvt. Ltd., the Revenue contended that the units were one and the same, based on various evidences. These included shared expenses, common staff, and transportation charges borne by the appellants. Despite the appellants' attempts to show financial independence, the Tribunal upheld the demand of duty, concluding that M/s. Weldone was created to divert clearances. The evidence supported the finding of clandestine removal.

Issue 3: Imposition of Personal Penalty
Due to setting aside a major portion of the duty, the penalty was reduced from Rs. 1,85,000.00 to Rs. 50,000.00. The Tribunal adjusted the penalty amount in line with the revised duty liability. The appeal was disposed of with the modified penalty amount.

In conclusion, the Tribunal ruled in favor of the appellants for the differential duty classification issue but upheld the demand of duty based on the clubbing of clearances. The penalty was reduced considering the adjusted duty liability.