Customs, Excise and Gold Tribunal - Mumbai
Auro Pumps Pvt. Ltd. And Jayesh G. Desai vs Commissioner Of Customs And Central ... on 15 March, 2005
ORDER Moheb Ali M., Member (T)
1. These two stay applications, one by M/s. Auro Pumps Pvt. Ltd. and another by its managing director, arose out of the order of the Commissioner of Central Excise (Appeals), Vadodara.
2. Briefly the facts are that the applicants are engaged in the manufacture of centrifugal pumps of various models primarily designed to handle water and to handle liquids other than water such as chemicals etc. The department's contention is that the applicants have cleared centrifugal pumps by misdeclaring them as the ones that are required to handle water whereas the pumps cleared are meant for handling liquids other than water. The pumps that are required primarily for handling water attract nil rate of duty whereas the power driven processed pumps classifiable under subheading 8413.19 of the schedule to CETA are chargeable to the central excise duty at appropriate rates. The allegation is that the applicant company cleared processed pumps in the garb of pumps meant for primarily handling water and thereby evaded duty. The other allegation is that brand name belonging to a foreign company is used on the goods cleared and thereby attracting duty under notification meant for small scale industries. On the first count, a demand for Rs. 12,51,125/- is raised and on the second, the demand for Rs. 7,33,525/- is made In addition, a penalty of Rs. 1,00,000/- is imposed on the managing director.
3. Heard both sides.
4. The learned advocate argues that 397 nos. of centrifugal pumps were actually cleared without payment of duty is erroneous. In regard to the second allegation, it is argued that the unit has not used the brand name belonging to another on the pumps cleared. It is only on the accessories some stickers were affixed and this does not amount to manufacturing goods with the brand name of another person. The investigation carried out by the officers does not suggest that the company cleared processed pumps in the garb of pumps meant primarily for drawing water. It is also submitted that wherever pumps falling under sub-heading 8413.19 were cleared, appropriate duty was paid. Financial hardship was also claimed and in support of this claim, the statement of accounts for the financial year 2003-2004 was submitted. In regard to the penalty imposed on the managing director, it is argued that imposition of penalty under Rule 209A is uncalled for as he had no role to play in evasion of any kind of duty.
5. We observe that the issue of classification of impugned pumps is a matter which has to be gone into in detail when the final hearing is taken up. At the prima facie stage, it is not possible to come to a conclusion that various pumps cleared by the company attract nil rate of duty. Insofar as the allegation that a brand name belonging to a foreign company is used, we observe that the applicant has made out a strong prima facie case in his favour. The same goes for the penalty imposed on the managing director. As the applicants failed to make out a strong case in their favour insofar as the classification of the pumps cleared by them, we direct the applicant company to deposit Rs. 4,00,000/- towards duty by 30.4.2005 and report compliance on 6.5.2005. Upon such deposit, further deposit of duty and penalty imposed on the company is waived. Failure to deposit the duty as directed above will result in dismissal of the appeal without further notice. The stay application of the managing director of the company is allowed.
6. Compliance on 6.5.2005.
(Operative part pronounced in court)