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TMI Blog2010 (5) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant in turn took MODVAT credit on the raw materials and manufactured the above mentioned goods and cleared them to Balmer Lawrie on payment of duty. M/s. Balmer Lawrie were paying labour charges for furnishing the containers and also paid a fixed amount of Rs.50,000/- per month towards services enumerated below, rendered by the appellants:- (a) provide covered space of a minimum area of 2000 sq. ft. for the purpose of storage of materials; (b) provide open space of a minimum area of 12,500 sq. ft. including electrical power upto a maximum of 5HP for taking up furnishing work of housing containers/insulated containers etc.; (c) provide all necessary facilities including manpower and personal computer and undertake the stores m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicated by the Deputy Commissioner confirming the demand raised, together with interest, and imposing penalty equal to duty. The Commissioner (Appeals) rejected the contention of the assessees regarding non-inclusion of the charges and the contention that the demand was barred by limitation as the assessees were under a bonafide belief that they were not required to include the charges in the assessable value and that there was no intention to evade payment of duty and further in any event, for the period post-August 1996 when everything came into the knowledge of the Department as all statements were recorded in this month, the allegation of suppression post-August 1996 could not be sustained. He, however, held that penalty under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the demand for the period subsequent to August 1996 is not sustainable as suppression cannot co-exist with knowledge and it is not disputed that all the facts came to the knowledge of the Department by August 1996 when the statements of the officials were recorded. We, therefore, set aside the demand for the period subsequent to August 1996. Interest under Section 11AB and penalty under Section 11AC are also set aside as a consequence of the setting aside of the demand for the period subsequent to August 1996. However, we uphold the penalty of Rs.50,000/- imposed under Rule 173Q and Rule 226 for the period prior to 28.9.1996.
3. The appeal is thus partly allowed as above.
Dictated and pronounced in open court. X X X X Extracts X X X X X X X X Extracts X X X X
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