TMI Blog2010 (3) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... artner of the said firm, is aggrieved by the penalty imposed on him. M/s. Shrinath Enterprises is his proprietorship, which is also challenging the penalty imposed on it. In a show-cause notice dated 20-7-2000, the department asked M/s. Mahavir Plastics to show-cause to the jurisdictional Commissioner of Central Excise, as to why :- (a) Central Excise duty amounting to Rs. 17,13,341/- on the cloth clips of plastics manufactured and removed clandestinely by M/s. Mahavir Plastics, Vasai (East) should not be demanded and recovered from them under proviso to sub-section (1) of Section 11A of Central Excise Act, 1944 (as detailed in annexure-B to show cause notice); (b) Central Excise duty amounting to Rs. 2,29,293/- on Tablet box and lids (Plastic containers with lids) falling under CSH No. 3923.90 of CETA, 1985 manufactured and removed clandestinely by M/s. Mahavir Plastics should not be demanded and recovered from them under proviso to sub-section (1) of section 11A of Central Excise Act, 1944 (as detailed in Annexure-C to show cause notice); (c) Central Excise duty amounting to Rs. 44,138/- on snap Button (fasteners) of plastics falling under CSH No. 3926.90 of CETA, 1985 manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show-cause notice were contested. In adjudication of the dispute, ld. Commissioner of Central Excise confirmed the aforesaid demands of duty against M/s. Mahavir Plastics under the proviso to Section 11A(1) of the Central Excise Act, 1944 and imposed on them a penalty equal to the total amount of duty under Section 11AC of the Act. Interest on duty was demanded under Section 11AB of the Act. Penalties of Rs. 11.00 lakh each were imposed on M/s. Shrinath Enterprises and Shri Upendra Shantilal Kapadia under Rule 209A of the Central Excise Rules, 1944. Hence the present appeals. 3. We have examined the records and heard both sides. In the written submissions filed on behalf of the appellants, we come across the following break-up of the demand of duty raised on M/s. Mahavir Plastics, for the period 1-4-98 to 24-1-2000. S. No Item Amount of duty demanded (a) Top and bottom holders of cloth clip alleged to be complete cloth clip classifiable under sub- heading No. 3924.90 Rs. 17,13,341/- (b) Caps, nozzles, containers, lids and accessories of plastics classifiable under sub-heading 3923.90 Rs. 2,29,293/- (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 57B on inputs which were used in or in relation to the manufacture of other final products manufactured by them. The Tribunal negatived the Revenue's view and held that the exemption was admissible to the assessee in as much as the condition No. 10 was not referable to any MODVAT Credit on the inputs which were used in or in relation to the Manufacture of other final products manufactured by the assessee. This view was followed by this Tribunal in the remaining cases citied by the advocate. The ld. Counsel has, however, fairly pointed out that the Tribunal's first decision in N.M. Nagpal's case was set aside by the Hon'ble Supreme Court, which remanded the matter to the Tribunal vide order dated 3-5-2006 in Civil Appeal No. 1571/01, [2008 (222) E.L.T. 486 (S.C.)] [CCE, Delhi v. N.M. Nagpal (P) Ltd.]. It is pointed out, fairly enough, that the Remanded case was decided by this Tribunal in favour of the Revenue. In this connection, ld. Counsel has produced a copy of final order Nos. 732-733/2006-EX dated 9-8-2006 in appeal Nos. E/228/00-B and E/1343/01-C. The Tribunal, in the said final order, had a fresh look at condition No. 10 ibid and it was held to the effect that the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termining the assessable value of the goods. We, therefore, hold that the assessee's claim under Section 4(4)(d)(ii) of the Act is liable to be considered by the lower authority, in the event of re-quantification of duty. In so far as their claim of MODVAT Credit on inputs is concerned, we have not found any finding in the ld. Commissioner's order and, therefore, he has got to consider this claim as well. 7. The item mentioned at (c) above, is snap fastener, otherwise called snap button. This item, which was also found to have been cleared without payment of duty by the assessee during the period of dispute, was classified by the ld. Commissioner under sub-heading 3926.90 of the CET Schedule. M/s. Mahavir Plastics claimed classification of the item under SH 9606.10 on the ground that the said item was specifically covered by SH 9606.10 of the tariff schedule. On a perusal of the relevant tariff entries, we find that buttons, snap fasteners, etc. were specifically covered by heading 96.06 and that buttons and button blanks were specifically classified under SH 9606.10 of the tariff schedule as it stood during the material period. The ld. Counsel has also invited our attention to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was known to the department. From 1-4-98, there was no requirement of payment of duty on account of the exemption notifications and, therefore, no duty was paid during this period. The ld. Counsel, on this basis, submits that the allegation of suppression of facts would not be tenable against the assessee in as much as such facts were very much within the knowledge of the department. In this connection, reliance has been placed on Pushpam Pharmaceuticals Company v. CCE, Bombay - 1995 (78) E.L.T. 401 (S.C.) and Tamil Nadu Housing Board v. CCE, Madras - 1994 (74) E.L.T. 9 (S.C.). In both the cited cases, it was held to the fact that, where the relevant facts were known to both the parties, the omission by one to do what he might have done and not that he must have done does not render it suppression of facts for the purpose of Section 11A(1) of the Central Excise Act. On the other hand, it is argued by the ld. SDR that the relevant facts were not at all disclosed to the department during the material period and that such facts were covered only through subsequent investigations. The assessee admittedly did not maintain statutory records covering manufacture and clearance of dutia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ueries, on the other hand, Shri Upendra Shantilal Kapadia asserted that they did not choose to pay duty on the goods under market compulsions. In the circumstances, we are unable to accept the plea made by the ld. Counsel based on bona fide belief or the case law cited by him in support of such plea. Yet another glaring evidence against the assessee can be found in one of the documents relied upon in the show-cause notice, which is a letter dated 23-3-99 of M/s. Mahavir Plastics addressed to the Superintendent, Central Excise Range office. That letter read thus :- "We have not manufactured any clips in the current year". 13. The ld. Counsel has made an endeavour to explain this submission of the party by pointing out that the assessee meant to say that they had not manufactured any clips as such in the year 1998-99. We wish, M/s. Mahavir Plastics could have given this explanation in their letter itself. Thus, by and large, the Revenue has been able to make out a case of suppression of facts against the assessee. Accordingly, it is held that no part of the demand of duty is time-barred. 14. The ld. Counsel has also submitted that, in a case of this nature, there can be no pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evasion of duty. Under Rule 209A, a person, who is sought to be penalised, should be found to have acquired possession of, or to have dealt with, excisable goods in any other manner with the knowledge or belief that the goods are liable to confiscation under the Act or Rules. In the impugned order, it appears, the ld. Commissioner has not addressed the penalty-related issue in the light of this provision of law. We are of the view that this issue also requires to be re-considered in the correct perspective in so far as M/s. Shrinath Enterprises are concerned. As regards Shri Upendra Shantilal Kapadia, the ld. Counsel has been able to challenge the penalty imposed on him, successfully on the strength of case law. He has cited CC (EP) v. Jupiter Exports - 2007 (213) E.L.T. 641 (Bom.), wherein it was held by the Hon'ble High Court that, where a partnership firm was penalized under Section 112 of the Customs Act, 1962, separate penalties could not be imposed on its partners. Shri Upendra Shantilal Kapadia was a partner of M/s. Mahavir Plastics. We have already held that M/s. Mahavir Plastics are liable to be penalized under Section 11AC. Therefore the separate penalty imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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