9911796707
TMI Blog2005 (2) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... 000, dated 30-5-2000, passed by the Commissioner of Central Excise, Chennai-III Commissionerate. 2.In the impugned order, the adjudicating authority has withdrawn the facility of Rule 56B accorded to M/s. TAFE. He demanded a sum of Rs. 3,91,03,566/- under Rule 9(2) of the Central Excise Rules, 1944 read with proviso to Section 11A(1) of the Act towards the duty payable by M/s. TAFE for the period from December 1994 to March 1999. He imposed equal penalty under Rule 173Q of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944. Interest under Section 11AB was also demanded. Further, a penalty of Rs. 25,00,000/- was imposed on M/s. AMCO under Rule 209A of Central Excise Rules, 1944. 3.The facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-1994 to 26-3-1999. According to him, the fact that M/s. AMCO cleared the goods received under Rule 56B on payment of duty is of no consequence. 4.S/Shri R. Raghavan and T. Balasubramaniam, learned Advocates appeared for M/s. TAFE and Shri Rajesh Chander Kumar, learned Advocate appeared for M/s. AMCO and Shri L. Narasimha Murthy, learned SDR appeared for Revenue. 5.The learned Advocates who appeared for M/s. TAFE made the following submissions :- (i) While obtaining permission under Rule 56B, the appellants informed the Department that M/s. AMCO belong to the group of M/s. TAFE who cleared the goods on payment of duty. (ii) It is not the case of Revenue that no testing was done at M/s. AMCO and on that ground, misdeclarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of duty at AMCO s selling price is not denied. Once it is held that M/s. TAFE and M/s. AMCO are related, for the goods manufactured at TAFE and completed at AMCO, the duty payable is on the price in hands of related person, namely AMCO. (xi) Section 11AC is applicable only in respect of removals after September 1996. This is well settled position. Hence further mandatory penalty equal to the duty is not leviable. In view of the above submissions, longer period to demand the duty cannot be invoked. 6.The learned Advocate appeared for M/s. AMCO submitted the following points :- (i) Penalty of Rs. 25,00,000/- under Rule 209A is not justified as this rule is invocable against a person who acquires possession of or in any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same goods cleared after testing, thereby levying duty twice which is totally impermissible in law. Our attention was also drawn to M/s. AMCO letter dated 17-1-95 to the Commissioner of Central Excise, Bangalore wherein it was suggested to receive goods from M/s. TAFE on payment of duty and then avail Modvat credit. On this, the Commissioner has suggested that Rule 56B procedure would be a better alternative. This was done by M/s. AMCO only to explore the alternative measures. This should not be construed by the Department to hold that M/s. AMCO had wilfully misled the Department. 7.The learned SDR stated that the Order-in-Original has elaborately dealt with all aspects of the case. He urged that the same should be upheld by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be satisfied with the quality of batteries tested by M/s. TAFE. But if the battery is tested and certified by M/s. AMCO then there would not be any problem. In view of the image of M/s. AMCO in the industry, a product tested and certified by them acquires a special value. This is a business reality. The Department cannot insist that all the thousand batteries removed under Rule 56B to M/s. AMCO should be tested. Each industry will have its own method of testing. Rule 56B and other instructions issued by CBEC do not hold that the random testing is not a testing. Hence the finding of the adjudicating authority is incorrect. Under these circumstances, there is no justification to hold that the permission under Rule 56B has been obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
