KORES (INDIA) LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) VIDE the impugned order, the Commissioner of Central Excise, Indore has confirmed a total duty demand of Rs. 98,14,714/ - jointly on M/s. Kores (I) Ltd., M/s. Mars Stationery Pvt. Ltd., M/s. Neha Stationery Pvt. Ltd., M/s. Nandini Stationery Pvt. Ltd. and M/s. Neptune Stationery Pvt. Ltd.

(2.) THE break up of the total duty demand is as follows :

(3.) PENALTY of amount equal to duty has been imposed under Section 11AC of the Central Excise Act on appellants Nos. 5 to 8. Further penalty of Rs. 4 lakhs, Rs. 3 lakhs, Rs. 2.5 lakhs and Rs. 1 lakh under Rule 173Q has been imposed respectively on appellants Nos. 5 to 8. Penalty of Rs. 20 lakhs and Rs. 10 lakhs respectively has been imposed under Rule 209A of the Central Excise Rules on appellant Nos. 1 and 2 while a penalty of Rs. 5 lakhs each on appellant Nos. 3 and 4 has been imposed under Rule 209A. The duty demand has been confirmed on the ground that staple pins shown as having been manufactured by appellant Nos. 5 to 8 during the period from September, 1992 to December, 1996 and cleared without payment of concessional rate of duty by availing the benefit of SSI exemption, under Notification No. 175/86 and Notification No. 1/93 were actually manufactured by appellant No. 1 and that four SSI units (appellant Nos. 5 to 8) were set up as a cover for the purpose of fraudulently availment of exemption from duty by appellant No. 1 who was not eligible to the benefit of SSI exemption since the value of clearances of appellant No. 1 exceeded the ceiling limit prescribed in the above mentioned SSI notification. In other words, the Department has treated appellant No. 1 as the manufacturer of staple pins cleared by appellant Nos. 5 to 8 during the relevant period. Further the duty demand has been calculated by adopting the price at which the staple pins were sold by appellant No. 1 from its sales depot to its customers as the basis for assessment and determination of duty.