TMI Blog1999 (8) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... eached buyers premises. On that basis it was held that property in the goods sold did not pass from the appellants to the buyer till the goods reached the premises of the buyer. So the value of the goods at the place where it was sold should be the basis for assessment to duty under Central Excise Act. Assessments were not made taking note of the said value upto the date of inspection by the authorities. It was also found that towards transit insurance charges .40% of the invoice value was realised while .13% alone was actually spent towards insurance charges. On this ground show cause notice dated 24-3-1998 was issued to the appellant calling upon them why - (i) Central Excise duty amounting to Rs. 29,65,532 on value of Rs. 2,61,60,197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Rules, 1944 read with Section 11A of the Central Excise Act, 1944 as proposed in the show cause notice dated 24-3-1998. M/s. Escorts (JCB) Ltd. 23/7, Mathura Road, Ballabgarh (Faridabad) is ordered to pay the aforesaid amount forthwith together with interest leviable as per law. (ii) I confirm the Central Excise duty amounting to Rs. 98,219/- (Rupees ninety eight thousand two hundred nineteen only) voluntarily debited by the party on 18-10-1997 as correctly paid under Rule 9(2) of the Central Excise Rules read with Section 11A of the Central Excise Act, 1944. (iii) I also impose a penalty of Rs. 30,63,751 (Rupees thirty lakhs sixty three thousand seven hundred fifty one only) on M/s. Escorts (JCB) Ltd. 23/7, Mathura Road, Ballabga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seller to the buyer. The property in the goods passed from the seller to the buyer at the factory gate as contended by the Representative of the appellant. Then the value of the goods at factory gate must be the basis for assessment to duty. So, the question that arises for consideration is whether property in the goods sold did, in fact, pass from the appellant firm to the buyer when the goods left the factory gate. It is an admitted case that the appellant got the goods insured when it was sent to the purchaser. Policy was taken in the name of the appellant. In the course of transit if the goods are lost, it is conceded before us, insurance company was to reimburse the appellant. Insurance company was reimbursing the appellant only becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e actual place where the goods were sold. These circumstances justify the authorities taking recourse to extended period of limitation under Section 11A of the Act. 6. On the second issue, namely, practice of taking .40% of the invoice value towards insurance and utilising only .13%, the Department has taken the view that unused portion must be liable for excise duty. It was on this basis that the Commissioner in the impugned order imposed central excise duty amounting to Rs. 98,219. We are not in a position to support this part of the order in view of the Tribunal's decision in Sri Kaliswari Fireworks v. CCE, Madurai - 1998 (98) E.L.T. 93. In that decision this Tribunal observed : "3. The show cause notice proceeds merely on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso be liable to pay a penalty equal to the duty determined therein. According to us the limit fixed therein is the maximum limit and it is not mandatory that in all cases such maximum should be imposed as penalty. Authority is having a discretion to impose lesser penalty. On the facts and circumstances of the case we feel that a lesser amount is to be imposed as penalty on the appellants. We reduce the penalty to Rs. 10 Lakhs. 8. In the result we dispose of this appeal by confirming the order of the Commissioner imposing a duty of Rs. 29,65,532 under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Act, set aside that part of the order which imposed duty amounting to Rs. 98,219 and reduce the penalty to Rs. 10 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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