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TMI Blog2018 (4) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... in trading activity, is not amounting to manufacture and these were not aware with the procedures and law governing Central Excise, levied on manufactures. As regards penalties on the respondents under Rule 26 the learned Commissioner have observed that for such penalty, necessary ingredients that is, the knowledge and reasons to believe that the goods which the person had dealt with were liable to confiscation, is completely missing in the facts of the case. Further finding was recorded that the Adjudicating Authority have imposed penalty under Rule 26 without there being any evidence on record in support of the allegations that the respondent(s) had knowledge or had reasons to believe that the goods in question were liable for confiscation under the provisions of Central Excise Law. Appeal dismissed - decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... and name of 'Top' & 'Ninja' manufactured (presumably after 01.06.2006) were seized under Rule 24 of the Central Excise Rules, 2002, as per the details given below: (a) Goods valued at ₹ 3,16,93,424/-(MRP) lying in premises of M/s. Amba Bi-Wheelers; (b) Goods valued at ₹ 49,349/- found lying at transport company; and (c) Goods valued at ₹ 75,92,061/- (MRP) found lying in the premises of M/s Amba Motorcycles, without accountal & without issue of invoice. 7. That from the scrutiny of records resumed and submitted by the Respondents, it appeared that total sale of M/s. Amba Bi-Wheelers, as per their records from 01.06.2006 to 03.08.2006 was ₹ 4,58,17,971/- (MRP) out of which sale of 'Top' & 'Ninja' brands was of ₹ 3,31,00,448/- (MRP) which were cleared without payment of duty of ₹ 35,92,330/- 8. That further, Shri Sunil Kapoor, Partner of M/s. Amba Motorcycles in his statement dated 03.08.2006 admitted that they purchased most of the goods from M/s. Amba Bi- Wheelers and in many cases, they did not receive any bill from M/s. Amba Bi-Wheelers, although they received goods of 'Top' & 'Ninja' brand from M/s. Amba Bi-Wheelers. M/s Amba Motorcycle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 3 (S.C.), excise duty was held not chargeable on the goods repacked/manufactured prior to 01.06.2006. (ii) That with regards to demand of ₹ 9,80,917/- raised in respect of goods cleared from 01.06.2006 to 03.08.2006 from the premises of M/s. Amba Bi-Wheelers to M/s. Amba Motorcycles without issuing invoices, excise duty was not leviable on the stock manufactured prior to 01.06.2006, in the light of Vazir Sultan Tobacco Co. case (supra), since as per audited Balance Sheet and sales made between 01.04.2006 to 31.05.2006, value of closing stock as on 31.05.2006 worked out to ₹ 1,17,01,736/- (cost price), therefore, the goods value at ₹ 90,38,376/- (MRP) alleged to be cleared without bills, belonged to stock prior to 01.06.2006. 11.1. That regarding confiscation of goods valued at ₹ 3,16,93,424/- (MRP) seized from the premises of M/s. Amba Bi-Wheelers, the Commissioner (Appeals) held that the stock worth ₹ 1,45,43,533/- (MRP) belonging to imported goods purchased from M/s. Amba International in duly packed condition, on which customs duty had already been paid and remaining goods valued at ₹ 1,71,49,890/- (MRP) were liable for confiscation, as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance sheet cannot form an evidence relating to date of manufacture of the seized goods. The balance sheet does not reflect the quantity manufactured before 01 June, 2006. Therefore, reliance placed upon the balance sheet is not proper and accordingly, the relief granted for goods supposed to be manufactured prior to 01 June, 2006 is not proper. 13. The learned AR further states that the Commissioner (Appeals) have ignored the statement of Shri Sanjeev Kapoor wherein he inter-alia stated that the goods were received in loose condition and, thereafter, they packed the goods in polythene bags and boxes of Top brand in their premises, that the stickers of Top brand were also affixed on the components, that the corrugated boxes of top brand were also affixed with part number of the item and the vehicle on which to be used with MRP, month of packing, name of packer i.e., Amba Bi-Wheelers Pvt. Ltd., that the above practice was from the beginning, that the sales were made to M/s Amba Motorcycles, Delhi, that he knew that Central Excise duty had been imposed on packing/repacking and labeling of automobile parts from 01 June, 2006. 14. That the learned Commissioner (Appeals) have erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said declaration by him. Thus no case for confiscation of the goods under Rule 25 of CER, 2002, is made out. In view of the declaration admittedly made by the respondents, no case of being clandestinely engaged in manufacturing and clearance of excisable goods is made out. The appellant had produced and filed the following statement of opening stock, purchase, sales and closing stock (cost and MRP) for the period from 01 April, 2006 to 03 August, 2006 in respect of Amba Bi-Wheelers Private Ltd: - Particulars TOP & NINJA Others (Trading) Total Opening Stock as per last audited Balance Sheet as on 31.03.2006(Submitted to the department vide letter dated 21.08.2006) 1,04,04,628 (Cost Price) 44,59,126 1,48,63,754 Add Purchases made between 1.04.2006 to 31.05.2006 2,46,53,413 (Cost Price) 1,08,03,911 3,54,57,324 Less Sales made between 1.04.2006 to 31.05.2006(Submitted to the Department vide letter dated 21.08.2006) 1,87,24,513 (Sale Price) 1,11,28,267 2,98,52,781 Closing Stock as on 31.052006 1,74,56,998 (Cost Price) 51,36,314 2,25,93,312 Add Purchases made between 1.06.2006 to 3.08.2006(Submitted to the Department vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004. 18. As regards the demand of duty amounting to ₹ 9,61,683/- with Education Cess of ₹ 19,234/- on clearances of ₹ 90,38,376/- at MRP, assessable value of ₹ 60,38,376/- alleged to have been cleared by Amba Bi- Wheelers Ltd., to Amba Motorcycles, without the invoice, it is stated that Amba Motorcycles were the owners of that 'Top' brand and made their own purchases from suppliers and not from Amba Bi-Wheelers Private Ltd. However at times they called upon Amba Bi-Wheelers to pack the goods purchased by them (Amba Motorcycles from independent Vendors) and such movement of goods was on Job Work cooperation basis, done only intermittently and there was no purchase/sale transaction between them. These facts are also supported by the statement of the partner Mr. Sunil Kapoor who had stated that purchases were made from other companies the names of some of them were stated in their statement which have also been taken notice in the show cause notice. M/s Amba Motorcycles also submitted details of closing stock and turnover based on audited balance sheet, books of account etc., for the period from 31 March, 2006 to 03 August, 2008, on 21.08.2006 during the adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore 31 May, 2006, before the amendment in the Third Schedule to the Central Excise Act came into being and thus such stock was not dutiable as held by Apex Court in the case of Vazir Sultan Tobacco Co. Ltd. (supra). It have been further held that even the stock if any packed after 31 May 2006, was eligible for SSI exemption under Notification No. 8/2003 - CE. As they did not cross the SSI limit during the said period from 1 June, 2006 to 03 August, 2006. Thus it is established that Amba Motorcycles had stock of motor vehicle parts of 'Ninja' and 'Top' brand of ₹ 1,17,01,736/- at cost price held by them as on 31 March, 2006, as per the audited balance sheet and thus was stock packed prior to 31 May, 2006, and further the same was not procured from Amba Bi- Wheelers Private Ltd., as have been alleged by Revenue. 20. As regards confiscation of goods worth ₹ 3,16,93,424/- seized from the premises of Amba Bi-Wheelers Private Ltd., on the ground that same were bearing the brand name 'Top' and 'Ninja' was not owned by them and had been stocked with intention to remove without payment of duty. The learned Commissioner (Appeals) have found that the seizure was uncalled for and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly packed condition. Accordingly appreciating the evidence on record the learned Commissioner have observed that the purchase of fully packed 'Top' brand goods by Amba Bi-Wheelers from Amba International is established and, therefore, the same cannot be treated as dutiable. Accordingly it was held that stock worth ₹ 1,45,43,534/- lying with Amba Bi-Wheelers cannot be subjected to Central Excise Duty being imported goods received in fully packed condition of 'Top' brand. It was further held that the remaining goods worth ₹ 1,71,49,890/- at MRP (Rs.3,16,93,424/- - ₹ 1,45,43,534/-) having assessable value at ₹ 1,14,04,676/- after allowing the rebate of 33.5% will be held liable to confiscation as the same had been packed/manufactured by affixing the brand name of some other person after 31 May 2006 without obtaining Central Excise Registration, related to the period after 01 June, 2006. It was further held that the appellant is not entitled to SSI exemption on these goods. Accordingly, confiscation of goods valued at ₹ 1,45,43,534/- at MRP was set aside. The learned Commissioner also accepted the contention of Amba Bi-Wheelers that they were under bona fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packed after 31 May, 2006, and further they were entitled to SSI exemption as they did not cross SSI limit during the said period and further brand name 'Top' and 'Ninja' belong to them. Accordingly, the learned Commissioner (Appeals) was pleased to set aside the confiscation of the goods valued ₹ 75,92,061/-. 22. As regards penalties on the respondents under Rule 26 the learned Commissioner have observed that for such penalty, necessary ingredients that is, the knowledge and reasons to believe that the goods which the person had dealt with were liable to confiscation, is completely missing in the facts of the case. Further finding was recorded that the Adjudicating Authority have imposed penalty under Rule 26 without there being any evidence on record in support of the allegations that the respondent(s) had knowledge or had reasons to believe that the goods in question were liable for confiscation under the provisions of Central Excise Law. It was also observed that the stocks seized from the respondents was duly accounted for in the books of accounts and that did not establish that there was an attempt to remove the goods in question clandestinely without issue of invoices ..... X X X X Extracts X X X X X X X X Extracts X X X X
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