9911796707
TMI Blog2005 (10) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... dio (P) Ltd. (JSAPL) manufacture recorded audio cassettes (RCs) falling under Chapter Heading 8524.32 of the Schedule to CETA, 1985. On 18-12-97, the Officers of Central Excise intercepted a tempo carrying 139 cartons of recorded audio cassettes. The cartons contained 27800 Nos of recorded cassettes duly packed in book case inlay card covers (IC covers). These inlay card covers are made of polypropylene. The goods in question were consigned to M/s. Magna Sound (I) Ltd. Investigation revealed two aspects - (a) the IC covers in which the RCs were packed were supplied by M/s. Magna Sound to JSAPL and (b) JSAPL has not included the cost of these IC covers in the assessable value of the audio cassettes. The RCs numbering 27800 were seized as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on one M/s. Suma Plastics who manufactured the IC covers and supplied them to M/s. JSAPL and further imposed a penalty of Rs. 25,000/- on the partners of M/s. Suma Plastics. 4. In appeal the Commissioner of Central Excise (Appeals) set aside the order of the Deputy Commissioner. The Commissioner s reasoning was : (a) The show cause notice is barred by limitation inasmuch as it was issued on 9-6-98 covering a period March, 1997 - December, 1997 alleging that M/s. JSAPL undervalued the RCs. But the same issue in respect of the same assessee was the subject-matter of another notice dated 5-11-97 by which the appellants were asked to show cause why the cost of IC covers should not be included in the value of RCs. This notice itself aro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmission on the part of the Revenue that a notice was issued on the same subject to M/s. JSAPL. We are unable to see any merit in the contention of the Revenue that since RCs were seized in December, 1997 on the allegation that they were undervalued (non-inclusion of cost of IC covers, resulted in undervaluation, according to the Department), the Department could invoke larger period of limitation even when a show cause notice on the same issue was pending adjudication. Normally, a seizure of excisable goods would lead to investigation, which in turn reveals the past deeds of an assessee. The larger period of limitation can be invoked in such cases. Here the facts are different. Recorded cassettes were seized in December, 1997 on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of pre-recorded cassettes have to be included in the assessable value of the said cassettes. To a pointed question by the Bench, the Respondents agreed that arrangement between the M/s. JSAPL and their customer M/s. Magna Sound is on principal-to-principal basis but M/s. JSAPL is discharging the duty on the RCs in the capacity of a job worker. This case therefore stands on the same footing as that of Sagarika Acoustronics. It is evident that M/s. Magna Sound buys the IC covers from M/s. Suma Plastics and supplies them to M/s. JSAPL who in turn uses them in the manufacture of RCs. We reject the plea that RCs can be cleared without IC covers as they are merely packing material. If that were to be the case, there is no need for the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turer (M/s. JSAPL) it is the latter who has to declare the correct value of the goods at the time of clearance. Failure on his part cannot be fastened on to the customer unless the record suggests that he has acted in connivance with the manufacturer. There is no such evidence. We, therefore, uphold the order of the Commissioner setting aside the penalty on M/s. Magna Sound and reject the Revenue s appeal on this aspect. 12. Penalties on the respondents, M/s. JSAPL and its Directors are imposable inasmuch as they have deliberately cleared the goods in contravention of various Central Excise Rules. They were aware as early as in November, 1997 itself that the Department was of the view that the cost of inlay covers has to be added to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
