Bright Home Appliances vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. BR/37-38/TH-II/2004 dated 24.2.2005 passed by Commissioner of Central Excise (Appeals), Mumbai-IV)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :

CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Bright Home Appliances Appellant Kamlesh C. Solanki

Vs. Commissioner of Central Excise, Thane-II Respondent

Appearance: Shri A.S. Karle, Consultant, for appellant Shri N.N. Prabhudesai, Superintendent (AR), for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing: 2.9.2015 Date of Decision: 2.9.2015

ORDER NO

Per: P.K. Jain

Brief facts of the case are that the appellant is a manufacturer of aluminium utensils. Aluminium utensils are exempt from payment of duty. For the manufacture of aluminium utensils, they require aluminium circles. The appellant is buying from the market aluminium circles and using the same in the manufacture of aluminium utensils and there is no dispute on this. Some time they also purchase aluminium sheets from the market and thereafter make the aluminium circles from the said sheets. The aluminium circles so made are further utilized in the manufacture of aluminium utensils. The appellant was not paying any duty on the manufacture of aluminium circles which was an intermediate product for the manufacture of aluminium utensils. Investigations were taken up against the assessee. During investigation, the aluminium circles valued at Rs.6,64,862/- were detained on 14.1.2004 and subsequently seized on 23.4.2004 under Rule 25(b) of the Central Excise Rules, 2002. Initially a demand notice was issued to the appellant demanding a duty of Rs.11,54,964/- for the manufacture of aluminium circles from January 2001 to 15th January 2004, for confiscation of the goods seized, interest under Section 11AB and penalty on Shri Kamlesh Solanki, partner of the appellant firm, under Rule 26. The case was adjudicated wherein the said demand was confirmed. Redemption fine of Rs.2 lakhs was imposed and a penalty of Rs.1 lakh was imposed on Shri Kamlesh Solanki, partner. Aggrieved by the said order, the appellant filed appeal before the Commissioner (Appeals). The Commissioner (Appeals) upheld all the charges against the appellant. However, the Commissioner (Appeals) extended the benefit of Notification No.6/2000-Sr.No.206. Aggrieved by the said order, the appellants are before us.

2. Learned counsel for the appellant submitted that the goods aluminium circles are not marketable and hence no duty is chargeable on aluminium circles. The learned counsel also submitted that they have already paid the duty determined by the Commissioner (Appeals). They have also paid the interest as also 25% penalty. He also submitted that though the goods were detained and handed over to them under supratnama and there was no provisional release of the goods. Moreover, redemption fine of Rs.2 lakhs on an approximate value of Rs.6 lakhs is on a very high side. He further submitted that the second appellant is the partner in the firm and the unit is a small unit and they are not conversant with the excise procedures and as soon as the departmental people pointed out their mistake in 2004, they paid the estimated duty and, therefore, requested for lenient view.

3. Learned AR, on the other hand, took us through the impugned order and stated that the appellant did not take the registration and, therefore, extended period of limitation has been correctly invoked. Further, the appellant themselves were purchasing the aluminium circles from the market and such aluminium circles were duty paid. Under the circumstances, there can be no reason for them to have any doubt that the intermediate product in the form of aluminium circles will not be chargeable to duty. He further submitted that redemption fine and penalty imposed are not on the higher side.

4. We have considered the submissions made by both the sides. We find that Notification No.6/06 at serial No.206 provides a specific rate of duty of Rs.2,500/- PMT and the said rate is subject to the conditions specified in the Notification. The appellants are undoubtedly satisfying those conditions. It is not under dispute that the appellant themselves were purchasing such aluminium circles from the market. This itself shows that the goods are marketable. We, therefore, do not find any strength in the submissions of the appellant that the goods produced are not marketable. Under the circumstances, we do not find any strength in the appeals filed by the appellants as far as the merit of the case is concerned. We also agree that the extended period of limitation is invokable inasmuch as the appellant had not taken any registration and had not informed about their activities to the department. Therefore, the duty confirmed, interest leviable and the penalty imposed under Section 11AC are upheld. As far as the redemption fine of Rs.2 lakhs is concerned, we find that the value of the goods detained was approximately Rs.6 lakhs only. Moreover, the goods were seized in the factory and were meant for captive consumption only. Even the duty element for the approximately four-year period has been worked out to roughly Rs.1,28,902/-. Keeping in view these facts, in our view, the redemption fine imposed is on a very high side and we reduce the redemption fine to Rs.10,000/- only.

4.1 We also find that penalty of Rs.1 lakhs has been imposed on the partner of the appellant firm. Since the duty amount is only Rs.1,28,902/-, we find that the imposition of penalty of Rs.1 lakh is on a very high side. We also note that the appellant is a small unit. Keeping in view the overall facts and also the conduct of the appellant that they paid the duty during investigation itself, in our view, a penalty of Rs.10,000/- will meet the ends of justice. We, therefore, reduce the penalty imposed on Shri Kamlesh Solanki to Rs.10,000/-.

5. The appeals are dismissed except the reduction in redemption fine and penalty.

(Pronounced in Court)

(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)

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