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2016 (8) TMI 936 - CESTAT NEW DELHI

2016 (8) TMI 936 - CESTAT NEW DELHI - TMI - Demand and imposition of penalty - Confiscation of goods seized - diversion of 1022 pieces of compressors procured by M/s. Thermoking at concessional rate of duty - clandestine removal of gas compressor to M/s. Flevel International and consequent manufacture of air conditioner by the said M/s. Flevel International - Held that:- there is no need for assessing the evidentiary value of all the facts placed on record by the revenue inasmuch as the same ver .....

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mpressor and the consequent demand of duty along with imposition of penalty cannot be upheld. Consequently, the confiscation of the seized goods is required to be set aside. - Clubbing of clearances - units related to each other - Held that:- the issue stand decided in the same appellants case vide the earlier order of the Tribunal wherein both the Members agreed that the allegations of clubbing of clearances cannot be upheld. Reference is made to the decision reported in [2014 (2) TMI 1094 .....

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V Padmanabhan, Member (Technical) Shri Naveen Mullick, Advocate for the Appellants Shri Yogesh Agarwal, DR for the Respondent ORDER Per Archana Wadhwa ( for the Bench ) Both the appeals, one filed by the assessee and the another by the Revenue are being disposed of by a common order as they arise out of same impugned order of the Commissioner vide which he has confirmed demand of ₹ 70,51,800/- along with imposition of penalty upon the assessee and confiscation of the goods seized. However .....

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aina Industrial Area, New Delhi and are engaged in the manufacture of domestic electrical appliances like geysers, washing machines, heat convectors, water coolers and air conditioners etc. During the relevant period, they were availing the benefit of small scale exemption notification No.175/86-CE. However, water coolers manufactured by them were fully exempted from payment of Central Excise duty in terms of notification No. 166/86 dated 1.3.1986. 3. It is seen that M/s. Thermoking is a proprie .....

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the clearances of M/s. Thermoking. It was further noticed during the investigation that M/s. Thermoking i.e. the present appellant is procuring gas compressor for the purpose of use in the water cooler from the other manufacturers, by following the Chapter X Procedure in terms of notification No. 166/86 dated 1.3.86. 4. As such, M/s. Thermoking, after following the due process of Procedure by filing AL-6 application and after executing the B 8 Bond and after procuring L-6 license from appropriat .....

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3 forms etc. which is the requisite procedure for procuring the goods under Chapter X of the Central Excise Rules. Investigations were made at the end of proprietary units of Ms Neera Khanna, which were engaged in the manufacture of air conditioner etc. 6. As a result investigations made by the Revenue, a view was entertained that the gas compressor procured by M/s. Thermoking, free of duty under Chapter X Procedure were actually not used in the manufacture of water cooler at their factory and .....

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all the notices by way of issuance of an earlier show cause notice dated 28.7.1992 (not the subject matter of the present proceedings) proposing clubbing of all the units as also making allegation of clandestine removal of all Air conditioners by Flevel International. The said show cause notice was adjudicated by the Commissioner vide his order dated 14.1.04 vide which he upheld the charges of clubbing of clearances as also the charge of clandestine diversion of 1022 pieces of gas compressor pr .....

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ne removal of gas compressor to M/s. Flevel International and consequent manufacture of air conditioner by the said M/s. Flevel International, there was difference of opinion between two Members of the Tribunal. Whereas the Member (Judicial) held that there is no sufficient tenable and positive evidence in respect of said allegation, Member (Technical) was of the view that Revenue has proved their case in respect of 606 air conditioner held to be cleared without payment of duty. On matter going .....

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orted in [2016 (332) ELT 416 (Del)], the majority order was set aside by resorting to minority order of the Tribunal. It is also seen that the Tribunals order as regards clubbing was appealed against by the Revenue before the Hon ble Delhi High Court and Revenue s appeal was dismissed on 18.2.2015 in the case of CEAC No. 3/2013. 9. The reference to the above developments is necessary inasmuch as the present impugned order also arises out of the same set up of investigation and statement recorded .....

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ant from M/s. Kirloskar Brother and Shreeram Refrigeration have not been used by them in the manufacture of water cooler and stands cleared to others for further manufacture of Air conditioner. 10. As regards the assessee s appeal, we find that the demand of duty to the extent of around ₹ 70.51 lakh stand confirmed against them on the allegations and findings that 1022 pieces of gas compressor received by them at concessional rate of duty under Chapter X procedure from M/s. Kirloskar Broth .....

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s. As observed, the earlier proceedings were subject matter of the Tribunal and Tribunal s decision and vide majority order, the allegations as regards the diversion of 1022 pieces of gas compressor and consequent manufacture of air conditioners by M/s. Flevel International, which were cleared clandestinely were upheld. The said majority decision of the Tribunal was challenged before Hon ble High Court of Delhi, who took note of the fact that the allegations of diversion of 1022 pieces of compre .....

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er cooler and evidentiary value of statement of Shri Pradeep Bhargava which stand relied upon by the adjudicating authority, we find that there is no need for assessing the evidentiary value of all the facts placed on record by the revenue inasmuch as the same very facts and evidences stand scrutinized by the Hon ble Delhi High Court and have been held to be insufficient to uphold the charges. The allegations in the present proceedings is in respect of same number of gas compressors i.e. 1022 pr .....

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