COMMISSIONER OF CENTRAL EXCISE Vs. PURUSHOTTAM INDUSTRIES LTD.

JUDGEMENT

(1.) The respondents are engaged in manufacture of M.S. Pipes falling under CET sub -heading 7306.90. On 22.8.95 the preventive officers of Central Excise Division visited their factory premises and in the course of preventive checks and physical verification of finished goods, a quantity of 14.435 MT of M.S. Pipes were found in excess of recorded balance in RG -1 Register and the same were seized. Certain records were resumed for scrutiny and it was found that the respondents were filing classification lists from time to time mentioning therein the description of goods as MSC/M.S. Pipes with market/buyer brand names and MSC/M.S. Pipes and tubes with own brand/unbranded. The pipes and tubes with market/buyer's brand names were cleared on payment of normal rate of 15% ad valorem and the pipes bearing their own brand/unbranded were cleared on payment of concessional rate of duty under notification No. 1/93 -CE dated 28.2.1993 as amended. It appeared from the record that the assessees had originally bifurcated MS. Pipes manufactured and cleared by them into two categories so that they could keep the value of their own brand of pipes below the exemption limit of Rs. 3 crores, prescribed in the Notification so that they could have avail benefit of SSI benefit thereunder.

(2.) ON 14.11.94, the Superintendent of Central Excise, wrote to appellants asking them why they are not mentioning brand name(s) of the other person(s) on the invoices, in response to which the assessees replied on 30.11.94 that it is a market practice of not mentioning size or brand name on the invoices and further that it would not have any revenue implication, if they did not mention the brand name in their invoices. Statement of Shri V.K. Agarwal, Director of the appellant was recorded under Section 14 of the Central Excise Act 1944 on 12.3.97 and 12.3.99. In his statement dated 12.3.97 on being questioned about the manufacture of unbranded and branded goods, he stated that they had manufactured MS Pipes of own brand in the name of 'PP' PURSHOTTAM and 'PIL', on which they had availed the benefit of SSI exemption. He further stated that they had also manufactured market brand pipes which were easily saleable in the market and those brands were not brand of anybody such as 'JTL' as shown. They did not avail benefit of SSI exemption on such pipes.

(3.) THUS , it appeared that the assessees had willfully shown some of their pipes as 'market/buyer brand pipes', without mentioning the name of specific brand in the records. The value of clearance of both categories of pipes manufactured and cleared by the assessee during the period 1993 -94 exceeded the exemption limit of Rs. 3 crores in the financial year 1994 -95, hence the assessees were not eligible to avail benefit of exemption in terms of SSI notification for the financial year 1995 -96. It was found that Central Excise Duty to the extent of Rs. 6,25,000/ - has been short paid during the financial year 1995 -96. Show cause notice proposing recovery of duty on the above basis and proposing penal action was issued to the assessees: the demand was confirmed on adjudication by the Joint Commissioner of Central Excise who also imposed penalty of amount equal to the duty under the provisions of Section 11AC of Central Excise Act, 1944 and penalty on the Director of the respondent Company under Rule 209A of the Central Excise Rules. The demand was confirmed by denying the benefit under the notification.