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TMI Blog2010 (12) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed the demand of ₹ 1,80,276.38p against the appellant company on account of the amount collected towards price variation while appropriating the said amount which was already deposited. The Joint Commissioner has also confirmed the demand of ₹ 4,78,213.82p against the appellant company in respect of the amount collected from the customers towards repairing and handling charges. The said demand has been confirmed along with interest payable thereon in terms of Section 11AB of the Central Excise Act, 1944 and has also imposed penalty of ₹ 8,00,863.41 under Section 11AC of the said Act read with Rule 173Q of the erstwhile Central Excise Rules, 1944. Besides personal penalty of ₹ 25,000/- has been imposed against the appellant Shri R.L. Gupta, ₹ 50,000/- penalty was imposed against the appellant Shri Madhukar Mishra and penalty of ₹ 5,000/- against the appellant Shri Hanuman Singh while exercising powers under Rule 209A and 210 of the erstwhile Central Excise Rules, 1944. The penalty of ₹ 50,000/- has also been imposed against one Shri P.R. Yadav, General Manager of the appellant company. However, he expired during pendency of the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary bills from Railways, and the appellants have already paid the same and have not contested the order in that regard. The issues in these appeals, therefore, are confined to two items, one relating to acetoning charges and other pertaining to the repair and handling charges. The appellants have also disputed the personal penalty imposed and have also raised the issue relating to bar of limitation. 6. The learned advocate for the appellants placing reliance in the decision in the matter of Government of India v. Madras Rubber Factory Ltd. reported in 1995 (77) E.L.T. 433 (S.C.), Indian Oxygen Ltd. v. Collector of Central Excise reported in 1988 (36) E.L.T. 723 (S.C.), Baroda Electric Meters Ltd. v. Collector of Central Excise reported in 1997 (94) E.L.T. 13 (S.C.), Collector of Central Excise, Bombay-III v. Century Spg. & Mfg. Co. Ltd. reported in 1997 (94) E.L.T. 16 (S.C.); Saurabh Gases v. Commissioner of Central Excise, Meerut reported in 2005 (183) E.L.T. 401 (Tri.-Del.), M. Hariraju v. CCE, Hyderabad reported in 1998 (100) E.L.T. 203 (Tri.), S.R. Jhunjhunwala v. CCE, Mumbai-II reported in 1999 (114) E.L.T. 890 (Tri.), Vijayawada Bottling Co. Ltd. v. CCE, Guntur reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e variation. 7. The DR on the other hand, relying upon the decision in the matter of Kota Oxygen (P) Ltd. v. CCE, Jaipur reported in 2000 (121) E.L.T. 369 (Tri.) as well as in 2001 (128) E.L.T. A68 and Best Liquifiable Gases Ltd. v. CCE, New Delhi reported in 1997 (95) E.L.T. 228 (Tri.) submitted that the authorities below after taking into consideration, the process of manufacturing and use of acetone by the appellants has arrived at correct finding regarding liability of duty on acetylene charges and this finding is clearly borne out from the records and in that regards, drew our attention to the contents of the show cause notice, reply thereto and the contents of the orders passed by the authorities below. He, further submitted that the statements of Shri R.L. Gupta and Shri P.R. Yadav clearly disclose admission of the relevant facts which lend clear support to the findings arrived at. He further, submitted that both the deponents had clearly admitted the peculiar modus operandi adopted by the appellants in relation to collection of acetoning charges and regarding the bifurcation of the value of DA gas, a part thereof being included in the amount disclosed in the invoice t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shi Gases Pvt. Ltd. reported in 1989 (42) E.L.T. 423 (Tri.). 11. In Best Liquifiable Gases Ltd., the Tribunal dealing with similar issue having arisen in similar set of facts placing reliance in the decision in the matter of Rishi Gases Pvt. Ltd., had held thus :- "4. The connection between acetone and acetylene gas has been considered by the Tribunal in the decision in Collector of Central Excise v. Rishi Gases Pvt. Ltd. 1989 (42) E.L.T. 423 (Tribunal). The Tribunal referred to Kirk Othmar's Encyclopaedia of Chemical Technology which stated that acetone is a solvent for acetylene and that a specified quantity of solvent is added to cylinders as it dissolves many times its own volume of acetylene and its purpose is to increase the amount of acetylene that may be safely charged and shipped. It was also noticed that acetylene is highly explosive substance and cannot be marketed without acetone. It is thus clear that the excisable product manufactured and cleared by the appellant is acetylene gas dissolved in acetone and packed in metal containers. That being so, acetoning charges should be part of the assessable value." [emphasis supplied]. 12. The Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the Apex Court refused to interfere in the order of the Tribunal wherein it had been held that the cost of packing would include expenses on maintenance and repairs of tonners/cylinders which were durable and returnable and further, that show cause notice admitted that the maintenance and service charges were cost of packing. As already held above, acetone has nothing to do with the packing or maintenance or repairs of the packing material. 16. In Saurabh Gases case, while relying upon the decision of the Apex Court in Vijayawada Bottling Co. Ltd. v. CCE reported in 1997 (94) E.L.T. 433 (S.C.), it was held that unloading, testing, repair and rental charges of the cylinders are not includible in the assessable value of the industrial gases. Needless to say that acetone does not relate to the activities relating to unloading, testing, repair and rental charges of the cylinders. 17. In Vijayawada Bottling Co. Ltd. case, the dispute was related to service charges relating to process of packing after the manufacture of aerated waters and not in relation to any activity in the course of manufacture of aerated waters. The circular dated 7-7-89 in para 2 thereof observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to repair and handling charges and therefore, it could not be included in the assessable value. As already seen above, the acetone forms part of the manufacturing process and apart from contention that the same does not form part of the manufacture, no other reason has been disclosed to exclude the cost thereof from the assessable value. Because the same was not disclosed in the invoice, the respondents are justified in contending that there was clear suppression of the said fact from the department with intention to evade the payment of the proper duty by the appellants. 20. Being so, on this count also, we do not find any fault with the impugned order. 21. The next point that is sought to be raised is in relation to bar of limitation. The authorities below in this regard, after referring to various facts which have been placed on record and duly corroborated by cogent evidence have arrived at the finding that the appellants were fully aware of the collection of charges in relation to above factors, which were not disclosed to the department and this is revealed from statements recorded by Shri P.R. Yadav, Shri R.L. Gupta and others. We have not been pointed out a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed on the appellant is liable to be set aside and I do so." 25. As far as Rule 209A is concerned, same reads thus : "Penalty for certain offences. - Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding three times the value of such goods or five thousand rupees, whichever is greater." Plain reading of the said Rule would disclose that in order to impose personal penalty, a person must be shown to have knowledge or reason to believe that excisable goods were liable for confiscation under the Act. The contention on behalf of the appellant that there is no finding by the authorities below about those relevant aspect of the provisions of law and therefore, imposition of penalty under Rule 209A is bad in law. Indeed the orders passed by the authorities below nowhere disclose any such finding nor any other finding which could reveal the authorities having considered this relevant aspect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the different provisions prescribe different penalties for such different defaults, nothing can prevent the competent authority from imposing penalties under all such provisions. In other words, it all depends upon the statutory provisions as regards the authorities power to impose penalty, not to forget the provisions of Article 20 and 21 of the Constitution of India. Undisputedly, the penalty imposed in the case in hand, could have been imposed under Rule 173Q for the default prior to 28-9-1996. Similarly, penalty imposed could be lawfully imposed under Section 11AC with effect from 28-9-1996. Being so, we do not find any infirmity in the imposition of penalty while exercising the powers under Section 11AC in relation to period from 28-9-1996 and exercising the power to impose penalty under Rule 173Q in relation to the period prior to 28-9-1996. 30. As far as the claim regarding Cenvat credit is concerned, since the same is required to be claimed in accordance with the provisions of law before the competent authority which has to satisfy himself on the basis of materials to be placed before him in support of such claim, it is too premature to deal with this aspect. Nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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