GLOBAL ENTERPRISES Vs. CCE, DELHI-II

JUDGEMENT

(1.) These appeals are against common impugned order dated 31/01/2013 passed by Commissioner of Central Excise, Delhi - II. The main appellant in this case is M/s Global Enterprises (hereinafter, GE), New Delhi, a proprietary concern of Shri Rishi Baluja. GE were engaged in manufacturing/trading of multi media speakers, with or without FM radio, classifiable under Chapter 85 of Central Excise Tariff. The Central Excise officers conducted search and verification in the premises of GE in April, 2011. Follow up investigations were conducted and statements of various connected persons were recorded. Certain excisable goods were also seized. On completion of the investigation a show cause notice dated 27/04/2012 was issued to various persons. The notice proposed classification of multi media speakers with woofer having FM radio, under CETH 85279990 and to be assessed under Section 4A of the Central Excise Act, 1944. A duty demand of Rs. 89,71,607/- was also made covering the period 01/04/2007 to 31/03/2011. Proposals were also made for confiscation of seized excisable goods and to impose penalties under Section 11AC/Rule 26, on various notices. The case was adjudicated. The Original Authority vide the impugned order held that multi media speakers without FM radio and with FM radio are classifiable under CETH 85184000 and 85279990 respectively. Multi media speakers with FM radio were held to be assessable under Section 4A. Duty demand of Rs. 88,27,946/- was confirmed alongwith interest. The seized goods were ordered to be confiscated with an option to redeem on payment of fine of Rs. 2,00,000/-. Penalty of equivalent amount to duty was also imposed on GE under Section 11AC. Penalties of Rs. 1,00,000/- each was imposed on the buyer companies under Rule 26. Original Authority dropped penal proceedings against M/s Krishna Technologies and M/s JMD Computers.

(2.) Revenue filed 6 appeals against the same impugned order contesting non-imposition of penalties under Rule 26 of Central Excise 2002 on 6 individuals for their role in non-payment of duty. Another appeal is by M/s Kaizen Computech Ltd., engaged in trading of multi media speakers in their own brand name, against imposition of penalty under Rule 26.

(3.) The brief facts of the case are that GE were engaged in manufacture/selling/trading of multi media speakers. GE purchased parts of speakers and assembled them into multi media speakers. These speakers were sold with their brand name "EXCEL". They claimed that during the period 2007-2008 to 2010-2011, no duty was payable on these speakers as the value of clearance was within the SSI exemption limit. Multi media speakers with or without FM radio were also received by GE from M/s Krishna Technologies and M/s JMD Computers. GE printed brand names of various buyers on such speakers and packed them for sale. The disputes in the present appeal mainly revolves around two issues :- (a) classification of multi media speakers with FM radio and (b) the use of brand name of others by GE in the manufacture of multi media speakers.