2000 (4) TMI 295 - AT - Central Excise

Summary

Issues involved: Appeal against Order-in-Original confirming duty on computers cleared without payment, imposition of penalty, redemption fine in lieu of confiscation.

In the judgment, the appellants, M/s. Sheth Computers Pvt. Ltd., Shri Rajesh Rasiklal Sheth, and Shri Lachhman Das & Company, appealed against the Order-in-Original confirming duty on computers cleared without payment, imposing penalties, and redemption fine in lieu of confiscation. The appellants contended that mere assembly of computer systems does not amount to assembly of computers, thus no duty is payable. M/s. Lachhman Das & Co. argued that they purchased a computer without knowledge of duty evasion, hence not liable for confiscation.

The Tribunal referred to a previous case where assembling data processing units from duty-paid parts was considered manufacturing. The appellants admitted to assembling computers from brought-out items, as confirmed by Shri Rajesh's statement. Consequently, the Tribunal found no merit in the appeal by M/s. Sheth Computer Services Pvt. Ltd.

A penalty of Rs. 10,000/- was imposed on Shri Rajesh Sheth under Rule 209A of Central Excise Rules, as he was the Director of the appellants' firm. However, since there was no evidence of mala fide intention to evade duty, the penalty was deemed unsustainable.

Regarding M/s. Lachhman Das & Co., they argued that they purchased a computer without knowledge of duty evasion and had no intention to evade payment. The Tribunal found the confiscation of the computer unjustified, setting aside the redemption fine of Rs. 35,000/- imposed on them. Consequently, the appeals filed by M/s. Lachhman Das & Co. and Shri Rajesh Sheth were allowed, while the appeal by Seth Computers was dismissed.