1990 (2) TMI 210 - AT - Central Excise

Summary

Issues:
- Levying duty on spare parts and erection charges
- Inclusion of erection/assembling charges in assessable value
- Quantum of penalty
- Confiscation of the truck

Analysis:

The judgment by the Appellate Tribunal CEGAT, New Delhi, involved common issues in two appeals that were heard together. The charge against the appellants was related to the manufacturing and removal of excisable goods without payment of Central Excise duty, valid transport documents, or proper accountal. The Collector of Central Excise Bombay had passed an order levying duty, releasing seized goods on payment of redemption fine, imposing penalties, and confiscating the truck. The appeals were filed against this order.

Regarding the inclusion of spare parts and erection charges in the assessable value, the Tribunal upheld the Collector's decision based on the company's submission during adjudication proceedings. The company had expressed willingness to discharge duty liability for parts supplied under guarantee, leading to the inclusion of these charges in the assessable value.

Concerning the inclusion of erection/assembling charges, the Collector had considered the relationship between the subsidiary and holding companies, concluding that these charges should be included in the assessable value. However, the Tribunal disagreed, citing precedents and held that these charges should be excluded from the assessable value, providing consequential relief to the appellants.

The Tribunal also addressed the quantum of penalty, noting that it was high considering the circumstances. The penalty was reduced from Rs. 25,000 to Rs. 15,000 due to the appellants' bona fide belief that certain goods were not dutiable.

Regarding the confiscation of the truck, the appellants argued that there was no proof of intentional wrongdoing and that the goods were cleared inadvertently. Despite conflicting statements, the Tribunal upheld the confiscation of the truck, which was released upon payment of a redemption fine of Rs. 10,000.

In conclusion, the Tribunal set aside the inclusion of erection/assembling charges in the assessable value, reduced the penalty amount, and confirmed the Collector's order with modifications. The appeal was dismissed with the mentioned adjustments.