9911796707
TMI Blog2000 (12) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of Rs. 2,44,440.00 has been confirmed in respect of 23 numbers of split type air conditioners manufactured and removed by the appellant without payment of duty, as per findings of the adjudicating authority. An amount of Rs. 1,69,956.00 has been confirmed by denying the Modvat credit involved in respect of the inputs which were lying in stock or under process or for the finished goods at the time of opting out Modvat scheme. Penalty of Rs. 2 lakhs has also been imposed under the provision of Rule 173Q(1) for the various violations committed by the appellants. 2. Briefly stated the facts of the case are as under :- 2.2 The appellants were engaged in the manufacture of room air conditioners of different capacity and models classifiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volving duty to the tune of Rs. 2,91,690.00. The above allegation was made on the ground that though the appellants records show the purchase of raw materials for the manufacture of split type air conditioners, there are no corresponding clearance documents for the same. An amount of Rs. 1,29,723.11 was proposed to be denied as Modvat credit in respect of the modvatable inputs lying in stock either as such or in process on the date when the appellant opted for exemption under Notification No. 75/87. An amount of Rs. 4,04,443.27 availed as Modvat credit by the appellant was also proposed to be disallowed on the ground that the same was not available to the appellant inasmuch as the same was availed without filing a declaration with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate value of clearances. Subsequent to the clearances of 5 lakhs, the prices were maintained at more or less the same level and since duty was now being paid by them, the said prices became cum-duty and on deduction of duty element from the said prices, assessable value is bound to come down and get reduced to the extent of duty as compared to the earlier period. This he explains that inasmuch as the appellants were availing Modvat credit and paying duty by utilising the same there was no need to increase the price of the air conditioners due to payment of excise duty. He submits that the Commissioner has adopted wrong basis by observing that the appellant deducted duty element on inputs, which is not the correct position. He further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice and the discussions of the adjudicating authority. 7. We have given our careful consideration to the submissions made from both the sides. From the show cause notice we find that the appellant took the central excise licence on 29-6-1988. It has been alleged in the notice that the aggregate clearance value of the bills raised by the said company up to 28-6-1988 i.e. the day before taking the central excise licence was to the tune of Rs. 8,35,000.00. Thereafter the appellant cleared first clearance value limit of Rs. 5 lakhs in each financial year based upon the aggregate value of their bills/invoices. The show cause notice gives the table showing the clearance value of the appellants product for each financial year which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r note that the snow cause notice gives the details of the costing factor and the manner in which the costing has been adopted by them. Having already held that the prices adopted by the appellant were not genuine prices, the manner of arriving at the correct assessable value based upon the investigations conducted from the other similarly situate air conditioner manufacturers and based upon the cost data cannot be faulted. Accordingly we confirm the demand of duty of Rs. 13,80,426.50 against the appellants. 9. As regards the confirmation of demand of duty of Rs. 2,44,440.00 in respect of 23 numbers of split air conditioners manufactured clandestinely and removed by the appellant, we find that the adjudicating authority has taken into con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of opting out of Modvat credit and availing exemption notification, it is seen that the issue has since been decided by the Larger Bench decision of the Tribunal in the case of Khanbhai Esoofbhai Ors. v. CCE, Calcutta, 1999 (107) E.L.T. 557 (Tri.) = RLT (LB) CEGAT-1193. It has been held that the credit involved in respect of the inputs in stock and inputs contained in under-processed material or final product in stock, on the final product being exempted are required to be reversed. As such following the ratio of the decision we confirm the said demand of duty against the appellants. 11. As regards Modvat credit of Rs. 4,04,443.77 we find that the adjudicating authority in para 5.2 of his order has held the said amount as not being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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