ARHAM SPINNING MILLS Vs. CCE

JUDGEMENT

(1.) These are three applications by M/s. Arham Spinning Mills and Ors., for waiver of pre -deposit of Central Excise duty amounting to Rs. 64,60,952/ - and equal amount of penalty on the firm and penalty of Rs. 5/ - lakh each on Shri V.K. Kad, Vice President, and Shri D.S. Virdi, General Manager.

(2.) Shri Balbir Singh, learned Advocate, at the outset, mentioned that if at all the duty liability is held against them, it should not be more than Rs. 30/ - lakh and not Rs. 64,60,952/ - as confirmed by the Commissioner; that the duty amount to Rs. 17,07,337/ - has been confirmed on the ground that quantum of freight and insurance had not been added in the assessable value on the ground that the insurance of the goods was taken by the appellants; that this demand is not sustainable at all as the invoices were issued by the applicants from the factory in the name of respective consignees. He has placed reliance on the judgment in the case of Escorts JCB Ltd. v. CCE, 2002 (84) ECC 225 (SC): 2002 (146) ELT 31 (SC) and in the case of Associated Strips Ltd. v. CCE, 2002 (81) ECC 404 (Tri): 2002 (143) ELT 131 (Tri). He, further, submitted that the remaining duty has been confirmed on the ground that the description of the goods in invoices issued under Rule 52A from the factory for transfer of goods to their Ludhiana Depot, was different from the description of the goods mentioned in the invoices issued for the sale of the goods from Ludhiana Depot; that the Department has only found 33 invoices showing the difference in the description of the goods and on the basis of these 33 invoices, the duty has been demanded for the entire period which is not permissible. The learned Advocate, finally, mentioned that on the basis of 33 invoices, duty liability will be approximately Rs. 4.5/ - lakh.

(3.) Opposing the prayer, Shri H.C. Pushkarna, learned DR, reitered the findings as contained in the impugned Order and submitted that the insurance had been taken by the applicants which goes to show that the title in the goods has not been shifted to the customers; that the applicants were indulging in evasion of duty by adopting modus operandi of menting (sic) description of the goods attracting lower rate of duty in Rule 52 A invoices while clearing the goods from the factory, though the goods were of different description attracting higher rate of duty.