ASHIRWAD EQUIPMENTS Vs. COMMISSIONER, C. EXCISE

JUDGEMENT

(1.) PREMISES of M/s. Ashirvad Equipments was visited by the officers of Central Excise and two chits dated 09.2.2001 were recovered. Partner who was present stated that two chits represent the correct amount charged by them in respect of machinery supplied to two customers and he also admitted under valuation of excisable goods involving Central Excise duty to the tune of Rs. 2,64,400/ -. On an appeal filed by the firm, duty demand as well as penalty under Section 11AC equal to duty amount was confirmed. Further, Commissioner (Appeals) in his order also extended the benefit on differential amount realized by them as cum -duty price and directed the jurisdictional Assistant Commissioner to check the calculation regarding the correctness of the amount claimed as payable by the appellants which was Rs. 1,95,172/ -. On an appeal filed by M/s. Ashirvad Equipments (Appellants for short), the Tribunal vide order No. A/841/C -IV/WZB/2006/SMB dated 06.2.2006, set aside the penalty under Section 11AC of Central Excise Act, 1994 and demand for interest under Section 11AB of Central Excise Act, 1944, following the decision in the case of Machine Montell (I) Limited : 2004 (168) ELT 466 (Tri. Larger Bench). Revenue filed appeal before the Hon'ble Gujarat High Court and the Hon'ble High Court has remanded the matter to this Tribunal with following observations:

(2.) SHRI M.A. Patel, Learned consultant on behalf of the appellants submitted that in this case, the appellants had paid duty amount before issue of show cause notice. In such a circumstance, no show cause notice could have been issued in view of the provisions of Section 11A(2B) of Central Excise Act, 1944. He also submits that appellants paid interest on 15.8.2003 and penalty to the extent of 25% of the duty demanded was also paid. He submits that their claim for cum -duty benefit has already been considered and the same has also been sanctioned. It is his submission that as the appellants had paid the duty amount during the course of investigation and interest after determination by the Assistant Commissioner, their case is covered under Section 11A(2B) of the Central Excise Act, 1944 and therefore, no penalty under Section 11AC is imposable. He relied on the decision of the Tribunal in the case of RR Oomerbhoy Pvt. Limited v. CCE Aurangabad, 2009 (171) ECR 187 (Tri. Mum.) and also decision of the Hon'ble Supreme Court in the case of Rajasthan Spinning Mills : 2009 (238) ELT 3 (S.C.).

(3.) I have considered the submissions of both sides. In this case learned consultant submitted that there was no investigation at all by the department and whole case of the department is based on the two chits recovered and the statement of the partner. Therefore, he submits that once the appellants paid duty amount and interest after determination by the Assistant Commissioner/Joint Commissioner, proceedings have to be treated as concluded and no penalty is imposable. He submits that the case before the Hon'ble bench of Tribunal Mumbai was similar to the facts of this case. I am unable to agree with the submissions of the learned consultant. The officers of the department visited the unit on 02.10.2001 recovered the chits dated 09.2.2001. The duty amount was paid on 03.10.2001 Rs. 1,00,000/ - on 11.10.2001 Rs. 1,24,800/ - and balance Rs. 1,600/ - on 22.01.2002. The show cause notice was issued in August 2002 and after the adjudication process was over, the appellants paid interest and also 25% of duty amount towards penalty on 15.8.2003 and 22.7.2003, respectively. In this case the machinery was sold under Central Excise Invoice which reflects the correct value and officers also recovered the chits which showed the correct value. There was a clear admission of undervaluation by the partner. Therefore, this is a clear case of evasion of duty by mis -declaring the value of the goods and therefore, the case is clearly covered by the provisions of Section 11A(2B) of Central Excise Act 1944, is not correct, which is reproduced below: