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2023 (11) TMI 559 - AT - Central ExciseShort payment of duty - division of total value of Modem viz. value of hardware and value of software - it is alleged that such bifurcation of value is with intention to evade payment of duty as the software was invoiced as software for PC - HELD THAT - The learned Commissioner (A) has held held that The above fact of not including the value of software in the assessable value in the impugned two months was kept under wraps till they paid duty for the said clearances only on 20.07.2004. Here the facts to be noted are the appellants had adopted the above practice only for a short period which was discontinued on their own obviously on the premise that the practice is wrong. However, the duty for the impugned period was paid much after. No contrary evidence has been placed by the appellant to rebut the aforesaid findings of the learned Commissioner (A). Also, there are no merit in the pleading of the learned advocate for the appellant that harbouring a bona fide belief, on the basis of the judgment in the case of PSI DATA SYSTEMS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE 1996 (12) TMI 47 - SUPREME COURT the appellant had split the value of Modem into Hardware and software. The evidence on record is otherwise. Even though the purchase orders by the customers were for the total value of the Modem, and the software is embedded to the Modem being indispensable, it is the appellant who has knowingly split the value of modem artificially as value of Hardware and value of Software so as to evade payment of duty. There are no merit in the contention of the learned advocate for the appellant that the Appellant were under a bonafide belief in declaring the value of software separately. Appeal dismissed.
Issues involved: Appeal against Order-in-Appeal regarding duty payment on Data Communication Equipment.
The appeal was filed against Order-in-Appeal No.202/2011-CE (de novo) dated 15.7.2011 passed by Commissioner of Central Excise (Appeals-I), Bangalore. The case involved the appellant, engaged in manufacturing Data Communication Equipment like 'Modem' and 'Network Terminators', classified under Chapter Subheading 8517 of Central Excise Tariff Act, 1985. The appellant was also engaged in trading related products. Allegations were made regarding the bifurcation of the value of Modem into hardware and software with the intention to evade duty payment. A show-cause notice was issued, leading to the confirmation of demand with interest and penalty by the adjudicating authority. The appeal was made against this order, resulting in a remand by the Tribunal to reconsider penalty and interest imposition in light of a Supreme Court decision. Regarding the imposition of penalty and recovery of interest, the learned Commissioner (A) upheld the order of the adjudicating authority based on the appellant's alleged suppression of product value. The appellant's advocate argued that the duty was paid under a bona fide belief following a Supreme Court judgment. The Revenue's representative countered this, stating that the appellant knowingly split the value of the Modem to evade duty, as evidenced by a statement from the CFO. The Tribunal noted this was the second round of litigation, with the Revenue challenging the setting aside of penalty and interest in a previous order. The learned Commissioner (A) analyzed the facts and legal principles, concluding that the appellant suppressed facts to evade duty payment. The Commissioner highlighted discrepancies in the appellant's actions, such as splitting the value of the Modem into hardware and software despite the software being integral to the product. The Commissioner found no merit in the appellant's argument of bona fide belief based on a previous judgment. The Tribunal, after hearing both sides and reviewing the records, upheld the impugned order and dismissed the appeal. No contrary evidence was presented to challenge the findings, and the Tribunal found no merit in the appellant's contention of acting under a bona fide belief. In conclusion, the Tribunal upheld the decision of the learned Commissioner (A) regarding penalty, interest, and duty payment on the Data Communication Equipment, based on the appellant's alleged suppression of facts to evade duty.
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