Customs, Excise and Gold Tribunal - Mumbai
M.B. Chandran, Rohini Fabricators Ltd. ... vs Commissioner Of Central Excise, ... on 3 September, 2001
JUDGMENT Jyoti Balasundaram, Member (J)
1. Duty demands of Rs. 11,91,314/- and Rs. 37,66,911/- have been confirmed against M/s. Rohini Coil Industries and Rohini Fabricators Ltd. respectively. In addition to duty demands as set out above penalties under Rules 173Q(1) and 226 read with Section 11AC and interest under Section 11AB have been imposed and further penalty of Rs. 60,000/- has been imposed Shri M.B. Chandran Proprietor of Rohini Coil Industries and a penalty of penalty of Rs. 2 lakhs has been imposed upon Shri M.B. Chandran in his capacity as director of Rohini Fabricators Ltd.
2. The duty demand arises as a result of the Commissioner's findings that goods manufactured by the applicants had ben misdeclared as Heat Exchangers etc. falling for classification under CET sub-heading 84.04 while they were actually parts for use in refrigeration or air conditioning machinery classifiable under sub-heading 84.19. The finding of the Commissioner is based upon the statements of various buyers, who have stated that all the goods supplied by the applicants were used in air-conditioning and refrigerating equipment, upon purchase orders placed upon applicants clearly showing that the orders were for parts meant for use in air conditioning and refrigerating equipment and also upon advertisement of the applicant themselves who have held themselves out as manufacturers of parts of equipments of air-conditioning and refrigeration plants.
3. We have heard Shri Naresh Thakkar Ld. Counsel and Shri B.B. Sarkar Ld. DR. We find that prima facie there is sufficient evidence on record to hold that the description of the goods was incorrect since in the present case classification clearly depends upon the use of the equipment parts. In other words classification under sub-heading 84.04 or 84.19 is based upon the use of the item and the purpose of the item, and since the applicants did not disclose that they were clearing parts such as heat exchangers etc. for air-conditioning and refrigeration equipments, prima facie there is a misdeclaration on the part of the applicant. The contention of the Ld. Counsel that the duty demand also included some trading activity has been dealt with by the Commissioner in paragraph 111 & 114. We find that the submission has been rejected for lack of substantiation. We find that the submission that the applicants did carry out trading activity is not borne out by any document. Infact the Commissioner has stated that worksheet showing calculation of duty does not include invoices issued by the in respect of their trading activity. (sales of bought out items). Therefore we see no prima facie in this submissions. The contentions of the applicants that out of the various persons whose statement have been relied upon, only three were offered for cross examination and therefore there has been a violation of principles of natural justice is also prima facie not acceptable, since it is not only on the basis of the statement that the case against the applicant has been made out, but also on the basis of the specific purchase order and the advertisement of the applicant themselves regarding their product.
4. The applicants raise the plea of financial hardship. They state that M/s. Rohini Coil Industries has made small profit of about Rs. 19000/- while Rohini Fabricators Ltd. has made a small profit of Rs. 36,000/-. We have gone through the balance sheet as on 31.3.2001 place before us these are not certified, and further both the units are not loss making unit.
5. Having regard to totality of facts and circumstances we direct M/s. Rohini Coil Industries to deposit Rs. 6 lakhs towards duty demand and M/s. Rohini Fabricators Ltd. to deposit Rs. 18 lakhs. On such predeposit balance duty and entire penalties shall stand waived and recovery thereof stayed pending these appeals. As far as Shri M.B. Chandran is concerned we direct predeposit of Rs. 20,000/- out of the penalty of Rs. 2 lakhs imposed upon him in his capacity as director of M/s. Rohini Fabricators Ltd. On such deposit as stated above the requirement of predeposit of balance duty and penalties involved shall stand dispensed with and recovery thereof stayed pending these appeals. Time for predeposit is 8 weeks from today.
6. Failure to comply with this direction shall result in vacation of stay and dismissal of appeals without further notice.
7. Compliance to be reported on 13.11.2001.
(Pronounced in Court)