Custom, Excise & Service Tax Tribunal
M/S Rasandik Engineering Industries ... vs Cce, Delhi Iii on 1 May, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 2126 & 1887 of 2005-EX[DB] E/Misc/553/2012 For approval and signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Rakesh Kumar, Member (Technical) 1 Whether Press Reporters may be allowed to see 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 of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Excise Appeal No. 1887 of 2005-EX[DB] [Arising out of Order-In-Original No 9/CE/2005 dated 15.04.2005 passed by Commissioner of Central Excise, Delhi-III] M/s Rasandik Engineering Industries Ltd. Appellants Vs. CCE, Delhi III Respondent
Excise Appeal No. 2126 of 2005-EX[DB] E/Misc/553/2012 [Arising out of Order-In-Original No 268/AKG/GGN/2005 dated 2.06.2005 passed by Commissioner of Central Excise (Appeals), Delhi-III, Gurgaon] M/s Mark Auto Industries Ltd. Appellants Vs. CCE, Delhi III Respondent Appearance:
None for the Appellants Shri. S. Bector, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Mr. Rakesh Kumar, Member (Technical) Date of Hearing/decision : 01.05.2013 FINAL ORDER NO ./ 56358-56359 /2013-Ex(Br) Per Archana Wadhwa (for the Bench):
Both the appeals are being disposed of by a common order as the issue is identical. Both the appellants are job worker of M/s. Maruti Udyog and are manufacturing various parts of motor vehicles for M/s. Maruti Udyog.
2. In or around 1994, M/s. Maruti Udyog imported various moulds for the manufacture of parts under EPCG scheme i.e. at nil rate of duty. The said moulds were supplied to present appellant who used the same in the manufacture of parts. Admittedly the value of moulds supplied by M/s. Maruti Udyog was amortized and included in the value of parts manufactured by the appellants. The value so amortized was without inclusion of basic customs duty as no duty was admittedly paid by M/s. Maruti Udyog at the time of import of the same.
3. Subsequently, as M/s. Maruti Udyog could not fulfill the export obligation, they were required to discharge duty liability in respect of moulds. Accordingly, M/s. Maruti Udyog paid the basic customs duty leviable on the said moulds along with interest as also countervailing duty, by way of raising supplementary invoices. The duty paid by M/s. Maruti Udyog was availed as credit by the present appellant and there is no dispute about the same.
4. The said payment of duty and interest by M/s. Maruti Udyog was in or around March, 2002. Revenue raised an objection that the additional duty paid by M/s. Maruti Udyog along with interest is also required to be included in the value of the parts cleared by the appellants in the past on amortisation basis. The appellants, in terms of directions of the Revenue, paid the duty in or around January, 2003. Thereafter proceedings were initiated against them by way of issuance of Show cause notice proposing confirmation of deposited amount as also for imposition of penalties. The said Show cause notice culminated into passing of impugned order confirming the demand and imposing penalties up to the extent of 100%. Hence, the present appeals.
5. Learned advocate appearing for the appellant submits that even if the Revenues contention is accepted, the amortization of duty and interest by M/s. Maruti subsequently is to be done in the parts manufactured by the appellants right from the beginning i.e. 1994, when the moulds were supplied to the appellants for the first time, in which case, the same would be barred by limitation. Anyhow, inasmuch as M/s. Maruti had paid the duty and interest subsequently, and the duty paid by the appellants is available as credit to M/s. Maruti, the entire situation was revenue neutral and that is why the appellants were ready to pay the duty in question. He clarified that duty paid by the appellant already stand availed as credit by M/s. Maruti Udyog. In such a scenario, learned advocate submits that imposition of penalties to the extent of 100% on the appellant was not warranted and prays for setting aside the same.
6. Learned DR appearing for the Revenue reiterates the reasoning of the adjudicating authority and submits that though the appellant had paid the duty, the imposition of penalty under the provisions of Section 11 AC was appropriate and as such, prays for upholding the order of Commissioner.
7. We have considered the submissions made by both sides. The facts in the present case are peculiar in their nature. Admittedly, when the moulds were supplied to the appellants, the duties and interest etc. was not a part of the cost of the moulds. The appellants have amortized entire cost of the moulds in the cost of parts being manufactured by them. It is only subsequently that M/s. Maruti had to pay the duty along with interest, in which case the value of the moulds got raised. As such, the Revenues contention that said raising of cost of the moulds would be applicable retrospectively and it would be the higher cost of moulds which have to be amortized in the value of the parts does not stand disputed by the assessee and they have discharged their duty liability, on being pointed out by the Revenue. In such a scenario, we are of the view that imposition of penalty upon the appellant is not called for inasmuch as there was no malafide intention on the part of the assessee to amortize the lower cost of the moulds in the value of the vehicle parts. As confirmation of demand of duty has not been disputed by the appellants, we uphold the same and set aside the penalties imposed upon both the appellants.
(Pronounced in the open court)
( Archana Wadhwa ) Member(Judicial)
( Rakesh Kumar ) Member(Technical)
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