9911796707
TMI Blog1998 (1) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the Department, whose case is that the appellant s premises were searched by the Central Excise officers following information that they had adopted certain methods of evading Central Excise duty by declaring in their price lists submitted to the Department a much lower price for their goods wherein the expenses incurred towards marketing and sales promotion were not included which should form part of the assessable value. But these expenses were passed on off loaded to their associate firms who are the other appellants Ram Laminates Bombay, and Poona, Ram Metal Industrial and another service agent appellant Maharashtra Laminates, Bombay. These firms raised separate bills for such expenses which were substantially on the higher side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice was issued on 27-10-1988 to the appellants proposing to recover differential duty by enhancing the assessable value loading it with the expenses borne by the selling agents and paid back to the appellants and also proposing penalty on the appellant Ram Decorative Laminates under Rule 173Q Central Excise Rules and proposing penalty on the other appellants herein under Rule 209A alleging that they had dealt with excisable goods which were undervalued with an intention to evade payment of duty knowingly. These appellants included the firms Ram Metal Industries Bombay, Ram Laminates Bombay and Poona, Shri R.R. Jhunjhunwala, Chairman and Managing Director of appellant Ram Decorative Laminates, O.P. Mundra, General Manager of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment that as per the practice in the trade they had appointed agents to procure business from dealers and distributors and that these agents charge separately to the dealers for the services rendered to them and such charges included insurance, octroi and transport and that the agents paid the appellants towards the expenses incurred towards insurance, transport, handling charges, etc. In that letter they further stated that recently Excise authorities in the case of some of the units in the trade have sought to include part of the realisation by the agents in the assessable value of the product and in that context the appellants wrote requesting the Department to examine the pattern of sale for correct valuation of Section 4 of the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Coromandel Fertilizer - 1984 (17) E.L.T. 607, whereby Supreme Court has disallowed agency commission given to a selling agent for services rendered by him as a deduction from the assessable value. Collector s finding is hence upheld. 8. It is also found that the Collector has held that only deduction of actual amounts of transportation costs and insurance charges are deductible under Section 4 of the Act. However, this view is no more good law and stands settled against the Department by the Supreme Court judgment reported in 1997 (94) E.L.T. 13, Baroda Electric Meters v. Collector cited and relied upon by the learned Consultant. Though that judgment dealt with excess realisation of transport cost over actuals, the same princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of decorative laminates manufactured by the appellants should be under Tariff Item 68 CET covering goods not elsewhere specified in the tariff, and not as plastic sheets under Item 15A(2) CET for the period prior to March, 1986 in view of the Supreme Court judgment in the case of Collector v. Bakelite Hylam - 1997 (91) E.L.T. 13 holding that laminated sheets being composite material are not classifiable under Item 15A(2) but under Item 68 CET. Before the Collector the same argument had been put forth based on Tribunal decision to the same effect in C.C.E. v. Melamine Fibre Board. Ld. DR, had repelled this contention before us by contending that classification of the goods was not an issue in the show cause notice in this case. The all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This brings us to the question of penalty on all the appellants herein. As for the penalty imposed on the appellants under Rule 209A we find that the SCN has not set out specific allegations against each of them. The Collector s reasoning in this regard is somewhat cryptic by merely saying that the ten appellants knowingly dealt with excisable goods which were undervalued. There is no elaboration as to how this conclusion is arrived at and how the ingredients of Rule 209A are satisfied. Therefore we hold that penalty on these appellants is not sustainable, and it is accordingly set aside. 12. In view of the findings partially in favour of appellants in respect of limitation and on certain aspects of valuation as above, we reduce the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
