2008 (4) TMI 589 - AT - Central Excise

Summary

Issues: Classification of Plastic Housing for Video Cassettes without magnetic tapes under Central Excise Tariff Act and imposition of penalty for duty evasion.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the appeal was filed by the Revenue against the order of the Commissioner (Appeals) regarding the classification of Plastic Housing for Video Cassettes without magnetic tapes and the penalty imposed on the respondent under Rule 209A. The Tribunal referred to a previous case, S.M. Enterprises v. Collector of Central Excise, Nagpur, where it was held that such plastic housings are excisable goods classifiable under sub-heading 3926 of the Central Excise Tariff Act. Therefore, the Tribunal set aside the Commissioner's finding on the classification issue.

Regarding the imposition of penalty, the Revenue alleged that the respondent aided another entity, M/s. Shivam Enterprises, in evading duty on branded goods, making them liable for penalty. The Tribunal noted that the respondent supplied various parts to M/s. Shivam Enterprises, which then manufactured the Plastic Housing for Video Cassettes without magnetic tapes and cleared them without paying duty. The Revenue argued that since the branded goods were cleared without duty payment, they should be confiscated, and the respondents should be penalized.

However, the Tribunal found that M/s. Shivam Enterprises, as the manufacturer of the goods, was responsible for paying duty on the branded products they manufactured. As the goods were seized from M/s. Shivam Enterprises, the job worker, who was considered the manufacturer of the confiscated goods, the Tribunal concluded that there was no issue with the penalty imposed on the present respondent being set aside. Therefore, the Tribunal dismissed the appeal, upholding the decision to set aside the penalty on the respondent.