9911796707
TMI Blog2000 (12) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... duties not paid on the clearances of sub-assemblies, in terms of Rule 9(2), Rule 57F(1)(ii) of the C.E. Rules, 1944 and Section 11D of the Act, read with the proviso to Section 11A(1) of the Act, as respectively applicable and as specified in the Annexure II to this order. 12.2. I impose a penalty of Rs. 32,00,000/- (Rupees thirty-two lakhs only), on M M under Rules 9(2), 52A, 173Q 226 of C.E. Rules, 1944 for the contraventions ibid. 12.3. I also order for confiscation of the Plant Machinery of the assessees, under Rule 173Q of the Central Excise Rules, 1944. However, I give an option to the assessee to redeem the same on payment of redemption fine of Rs. 10,00,000/- (Rupees ten lakhs only) under Section 34 of the Central Excise Act, 1944. 2. The facts of the case in brief are that appellants are engaged in the manufacture of Light Commercial Vehicles. They are availing the benefit of credit of duty paid on inputs under the Modvat scheme. While they are manufacturing light commercial vehicles, they are also selling spares from their Spare Parts Division. Certain irregularities were observed during the course of checking the stocks and verification thereof. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ican Auto Service reported in 1996 (81) E.L.T. 71 and further by the decision of this Tribunal in the case of CCE v. Asia Brown Boveri Ltd. reported in 2000 (120) E.L.T. 228 (Tribunal-LB). 7. We considered the submissions of both sides on this issue. We find that this Tribunal in the case of CCE v. American Auto Service cited by the appellant held that rate of duty when Modvat inputs on which credit was taken and are utilised, removed for home consumption under Rule 57F(1)(ii) of Central Excise Rules, 1944, the duty suffered earlier and already utilised to be paid back and not the effective rate of duty as prevalent at the time of removal of goods for home consumption is applicable. Assessment finalised at original manufacturer's end is not to be reopened at purchaser's end. From this, we find that since duty on these goods was already assessed at the original manufacturer's premises, therefore there was no question of fresh assessment and hence we observe that this remaining demand is fully covered by this decision. We further note that in the case of CCE v. Asia Brown Boveri (supra) this Tribunal further observed that requirement of Rule 57F(1)(ii) is for demand of duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls were Excise Duty has been reduced from 23% to 20%". It was observed by the department that there was further noting reading as Since we are not showing excise duty separately, prices to be revised and to be circulated . The department also alleged that there were statements of the employees of the company stating that this was the practice; that prices were being revised from time to time; that according to this circular, the prices were actually revised. Therefore, the department alleged that since the appellant collected duty on spare parts sold from their spare parts department, therefore the duty must be deposited with the Government as required under Section 11D. It was also alleged that Sec. 12A required that duty should be shown separately. To avoid payment of duty, the appellant had devised the system of showing composite price in their sale bills meaning thereby duty was included in the price. The appellant explained that these parts which were cleared and sent to the spare parts department were declared by the assessee under Rule 57G as inputs; that no evidence has been produced to prove that they were non-Modvatable items. It was submitted by the appellant that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sent back to them to verify this aspect. Ld. Counsel submits that though it was proved before the ld. Commissioner that correlation was done to the extent of 64%, he ignored the correlation and failed to extend the benefit even for those inputs where proof was furnished. 10. In reply to the contention of the Counsel for the appellant, ld. DR submitted that the Commissioner examined the statements furnished by the appellant and by stating that entries did not lead anywhere, the ld. Commissioner has rightly confirmed the demand. 11. We have carefully considered the submissions on this aspect. We find that demand on this score is more than Rs. 1.07 crore. We further note that emphasise of the Counsel for the appellant was that they had been able to reconcile 64% of the entries to prove that no Modvat credit was taken on the goods. Counsel went to the extent of showing that they will be able to establish it by the records maintained by the appellant. We find that it is a vital issue to find out whether the statement of the assessee is correct in which he has stated that 64% of the inputs were non-Modvatable on which no Modvat credit was taken. We find that this statement has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same accordingly. 15. Regarding confirmation of the demand of Rs. 16,66,902.53, the allegation was that appellant indulged in the manufacture and clearance of sub-assemblies without accountal and without payment of duty thereon to their spare parts department. Counsel for the appellant submitted that the allegation of the department is that spare parts department of the appellant was sending Spare Parts Transfer Notes and that on the date of sending of this STPN records do not show the clearance movement of the assemblies and therefore the allegation of the department was that assemblies were removed without payment of duty. The department has relied upon the latter from the Manager to the Chief Materials Manager in which it was stated By a copy of this letter, we are requesting ............. to quickly follow up the excise formalities as even this cabin was transferred without excise gate pass . Ld. Counsel submitted that this letter has been given importance out of proportion; that was only to show that the excise formalities should be completed; that negative inference drawn by the department was not desirable. Ld. Counsel submits that even today, if they are required to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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