INTERSCAPE Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M /s. Interscape (IS) manufacture furniture, wooden and steel falling under Chapters 44 and 94 of the Schedule to CETA. In response to a tender floated by M/s. Etcetra Design Cell, M/s. IS agreed to undertake to make furniture, Plaster of Paris work and interior painting job for total sum of Rs. 54 lakhs. The scope of work was increased later as the work progressed. M/s. IS executed the job at the site belonging to M/s. Omsagar Engineering Pvt. Ltd. The Officers got wind of the fact that M/s. IS was manufacturing furniture and clearing it without payment of duty. They searched the premises of M/s. Omsagar Engineering Works seized some documents and the furniture made by M/s. IS, searched the premises of M/s. Etcetra Design and seized some documents from there as well and finally searched the premises of M/s. IS and recovered more documents. On the basic of various statements made by all concerned, the documents seized, it was alleged that M/s. IS manufactured furniture for M/s. Omsagar Engineering and cleared it without payment of duty. The said furniture lying in the premises of the later was seized on 2 -12 -94 and was handed over to M/s. Omsagar under Supratnama and execution of a B II bond. M/s. Omsagar paid Rs. 24,15,437/ -vide TR6 Challan No. NIL dated 3 -2 -95. The show cause notice as well as the impugned order say that the above sum was paid by M/s. Omsagar towards duty on behalf of M/s. IS.

(2.) IN the impugned order the Commissioner considered various submissions on behalf of M/s. IS and determined the duty liability to be Rs. 16,45,484.57 as against the demand for Rs. 24,15,437/ - stated in the show cause notice. He confiscated the furniture but allowed it to be redeemed on payment of a fine of Rs. 1 lakh under Section 34 of Central Excise Act, imposed a penalty of Rs. 10 lakhs on M/s. IS under Rule 173Q of Central Excise Rules imposed a penalty of Rs. 5 lakhs on M/s. Omsagar Engineering Pvt. Ltd. under Rule 209A of Central Excise Rules, interest under Section 11AB and appropriated Rs. 24,15,437/ - paid by M/s. Omsagar Engineering Pvt. Ltd. towards all liabilities that arose out of the impugned order. Hence these appeals.

(3.) HEARD both sides.