VASUNDHARA CONTAINERS AND PIPES Vs. C.C.E.

JUDGEMENT

(1.) These are 3 appeals - 2 filed by M/s. Vasundhara Containers and pipe Ltd., and its Director Shri Penal Shah, and one filed by the Revenue - against Order -in -Appeal Nos. 672 -674/2002, dated 29 -11 -2002.

(2.) Shri Kamaljit Singh, learned Advocate, submitted on behalf of M/s. Vasundhara Containers and Pipes Ltd., that the assessees are engaged in the manufacture of plastic water storage tank of different capacity and section hose pipes; that on their visit of the factory on 11 -7 -1998 the Central Excise Officers found that the actual capacity of roof tank which were declared to be 300 litres was more than 310 litres; that the Officers also found a test report stating that the net capacity of these tanks was 300 litres and the gross capacity was 353 litres making them ineligible for the benefit of Notification No. 4/97 -C.E., dated 1 -3 -97; that the Jt. Commissioner under Order -in -Original No. 17/2001, dated 28 -2 -2001, confirmed the demand of duty against M/s. Vasundhara Containers and Pipes Ltd. besides imposing a penalty Of equal amount on them under Rule 173Q of the Central Excise Rules; 1944, read with Section 11AC of Central Excise Act; that the Jt. Commissioner also imposed a penalty of Rs. 3 lakhs each on two directors, namely, Shri Penal Shah and Shri Pragnesh Shah. On appeal the Commissioner (Appeals), wider the impugned Order, has held that tanks marked with 300 litres capacity and sold at prices up to Rs. 2.85 per litre capacity would be construed of capacity up to 300 litres While the Other tanks charged to prices in excess shall be construed to be of a capacity of more than 300 litres; that the Commissioner (Appeals) has also held that the assessee shall be given adjustment towards Modvat credit on the input materials subject to submissions of evidence of payment of duty; that the Commissioner (Appeals) reduced the penalty to Rs. 1 lakh in respect of assessee -firm and set aside the penalty imposed on Shri Pragnesh Shah while confirming the penalty imposed On Shri Penal Shah.

(3.) The learned Advocate, further, submitted that the assessees are manufacturing tank as per ISI Specification; that the gross capacity of the tank is more than 300 litres on account of technical reasons like inlet and outlet and on account of necessity to provide space for filling and draining; that the net capacity of tank is 300 litres only; that ISI specification No. 1271 provides that the gross capacity of the storage tank should be minimum 5% more than the net capacity; that the learned Commissioner has erroneously held that the tanks of prices ranging from 3.25 to 3.24 per litre capacity are different from tank of prices ranging from 2.65 to 2.85 per litres; that the difference in price is not on account of capacity of tank as has been assumed by the Commissioner (Appeals) but on account of the quality of the tank. He also mentioned that these tanks are bought and sold in the market as tanks of 300 litres capacity only. In fact the words "300 litres" are printed on the tanks; that the storage tanks are bought and sold in the market in standard sizes of 100 litres, 200 litres, 500 litres, 1000 litres and are not bought and sold in odd sizes like 310 litres; that therefore, the Appellants are rightly declaring tanks of 300 litres capacity; that neighter larger period of limitation is invocable nor penalty is imposable in the facts and circumstances of the present matter.