2002 (10) TMI 196 - AT - Central Excise

Summary

Issues:
1. Liability of ABB for penalty under Rule 209A of the Central Excise Rules, 1944.
2. Application of Rule 209A in the case.
3. Interpretation of duty under Rule 2(7) of the Central Excise Act, 1944.
4. Verification of technical data provided by ABB for determining annual capacity.

Analysis:

1. The appeal was filed by M/s. Asea Brown Boveri Ltd. against the Order-in-Original holding them liable for penalty under Rule 209A. The proceedings were initiated against the manufacturer and ABB based on the allegation that ABB aided the manufacturer in evading Central Excise duty. The allegation was supported by discrepancies in capacity information provided by ABB, leading to the imposition of penalty.

2. The Tribunal found that while the order-in-original held ABB liable for penalty under Rule 209A, the actual order confirmed the duty and penalty only on the manufacturer. As there was no specific penalty order against ABB, the Tribunal set aside the penalty as far as ABB was concerned. Additionally, Rule 209A applies to excisable goods liable for confiscation, not capital goods like furnaces supplied by ABB, leading to the conclusion that penalty under Rule 209A cannot be imposed on ABB in this case.

3. The Tribunal noted that during the relevant period, duty under Rule 2(7) was defined as 'duty payable under Section 3' of the Central Excise Act, 1944. Since Rule 209A applies where duty is payable under Section 3 and not Section 3A, the application of Rule 209A to the case was deemed incorrect.

4. On the merits, the Tribunal highlighted the reliance on a certificate provided by ABB regarding the furnace capacity. However, the technical data provided by ABB indicated a higher production capacity than mentioned in the certificate. The Tribunal emphasized the need for the Commissioner to determine annual capacity based on verified data, such as invoices, rather than relying solely on certificates. Precedents were cited to support this approach. Consequently, the findings regarding the penalty under Rule 209A were expunged, and the appeals were allowed accordingly.