TMI Blog2019 (6) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... on the actual value, after adjusting the duty earlier paid by them. In respect of the impugned goods, such duty amount paid on provisional basis based on the notional value amounted to ₹ 16,42,425/-, which was, in any case, more than even the enhanced duty demand of ₹ 15,65,921.19/- proposed to be demanded in the corrigendum to the Show Cause Notice - there was nothing mala fide about the practice being followed by M/s. CMS. All the removals, though done only on delivery challans, had been reflected in their R.G. 1 returns. Though specific permission for such removals was not obtained, it cannot be denied that M/s. MOC had got their ground plan endorsed with a portion approved by the jurisdictional Range Superintendent for storing machineries. The appellants could very well have qualified for permission to store the finished goods outside their factory premises in terms of the amendment brought about in Rule 47 ibid with effect from 10.05.1989. At the most, there has been some procedural lapse in not having followed the correct protocol for removal of such goods. We are constrained to note that such a procedural lapse which could have been resolved by suitable war ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineries received by them for repair/re-conditioning; (b) Most of the machineries detained at M/s. MOC were fully finished and some of them required only minor finishing touches; some of them were received for repairs; (c) They cleared machineries only to their group companies and not to any outisders; (d) He furnished the ground plan of M/s. MOC with endorsement by the Range Officer, Range V-B as Approved the portion marked A for storing machineries ; (e) No documentation was done for storage of goods as there was an approval by the Superintendent in the ground plan of Guindy unit. M/s. CMS paid duty on the new machineries manufactured by them and stored at Guindy on the notional value and they would pay appropriate duty on the actual value at the time of clearance of complete machineries after adjusting the duty paid by them. 3. The Department took the view that the endorsement in the ground plan of Guindy unit by the Superintendent did not appear to show that permission was accorded to M/s. CMS to remove and store their non-duty paid goods at the premises of M/s. MOC; that the provisions of Rule 47 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Whether the goods which were held to be excisable are indeed excisable or not in the light of the submissions made by M/s. CMS; and (b) To determine the conduct on the part of M/s. CMS as to whether any mala fide existed. 5.2 The adjudicating authority inter alia held that removal of the goods in dispute without payment of duty cannot be deemed to have taken place with the knowledge and permission of the Department and once again confirmed the demand of ₹ 15,12,454/- and adjusted the said demand from ₹ 16,42,425/- being the excise duty paid by M/s. CMS on provisional basis. The seized goods valued at ₹ 11,29,741/- were confiscated and redemption fine of ₹ 1.5 Lakhs was imposed in lieu of confiscation; the said fine was appropriated from an amount of ₹ 1.5 Lakhs already paid by M/s. CMS while taking possession of the said goods earlier. With regard to the other seized goods valued at ₹ 76,38,105/-, the adjudicating authority held that the goods are liable for confiscation under Rule 173Q ibid, but as the goods were released provisionally pending adjudication in terms of Rule 206(3) of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide intention cannot be attributed to the assessee in a revenue neutral situation. Reliance is placed on the following decisions : a. M/s. Nirlon Ltd. Vs. C.C.E. 2015 (320) E.L.T. 22 (S.C.); b. C.C.E. Vs. M/s. Tenneco RC India (P) Ltd. 2015 (323) E.L.T. 299 (Mad.) (v) It follows that the impugned Order-in-Original holding that the impugned goods are liable for confiscation is not sustainable and penalty is not imposable. (vi) The impugned goods were cleared from the appellant s Tiruvottiyur factory between 29.06.1990 and 20.02.1992. The impugned Show Cause Notice was issued only on 04.09.1992 and therefore, the demand of ₹ 14,16,079/- pertaining to the period from 29.06.1990 to 31.01.1992 is barred by limitation. Extended period of limitation is not invokable since no mala fide intention can be attributed on the appellant for the reasons stated supra. (vii) The remand order of the Tribunal required the adjudicating authority to decide whether M/s. CMS had mala fide intention or not based on the procedure followed by them, viz., entries being made in RG 1 and other accounts. The Ld. C.C.E., how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (xi) The impugned Order-in-Original imposes penalty of ₹ 30,000/- on M/s. MOC (Guindy unit) without stating any reason for the same. Thus, the penalty merits to be set aside on this ground only. (xii) Further, it is a settled legal position that penalty under Rule 209A of the Central Excise Rules cannot be imposed on company. Reliance is placed on the Larger Bench decision of the Tribunal in M/s. Steel Tubes of India Ltd. Vs. Commissioner of C.Ex., Indore reported in 2007 (217) E.L.T. 506 (Tri. LB) 7.1 On the other hand, on behalf of the Department, Ld. AR Shri. B. Balamurugan supported the impugned order. He drew our attention to paragraph 3.26 of the impugned order wherein the adjudicating authority has analysed the endorsement of the Superintendent of Central Excise, Madras-V Division, Group B on the ground plan of M/s. MOC and has concluded that the endorsement simply meant that a portion was earmarked for the storing machineries. It does not in any manner state or imply that the portion was earmarked for storing of the machineries manufactured and to be cleared without payment of duty from M/s. CMS, Tiruvottiyur. No e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rer to store his goods in any other space outside such premises without payment of duty. No such permission of CBEC has been obtained or produced but this enabling clause of amendment of 1989 indicates that when there is a shortage of space, it is cause enough to permit the storage outside and such permission being procedural should not visit the appellant with a heavy liability of confiscation on such goods. (b) We also find that, in the facts of this case, a majority part of the goods on which duty of ₹ 15,12,454/- determined were subsequent to provisional release cleared on payment of duty of ₹ 16,42,425/- and therefore, we cannot come to any conclusion that there was any intent to evade payment of duty and if there has been any contravention of Rule 173Q it would be only contravention of Rule 173Q(1)(a) in the facts of this case. (c) We find that photocopies of R.G.1, which were produced before us, were part of the seized records and were available to the adjudicator to determine whether there was a mention to cover the present goods under seizure or otherwise of having been stored at Guindy and whether the Commissioner has consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n note of the CESTAT remand directions to allow the appellants to submit all materials to prove how the goods which have been held to be excisable were not excisable were not excisable when they were removed from the premises of Tiruvatriiyur to Guindy premises . However, in response, the adjudicating authority has concluded in paragraph 3.14 of the impugned order that : what is required to be seen is whether the goods are capable of being marketed. It is not necessary that the goods have to be actually marketed and it is enough if the goods are capable of being marketed. Even this goalpost of excisability arrived at by the adjudicating authority has been subsequently changed by the adjudicating authority in paragraph 3.17, as under : As long as a goods is a result of manufacturing process and have mobility and marketability and find place in the schedule to the Central Excise Tariff, they are excisable goods. 9.3.4 We are unable to appreciate such reasonings adopted by the adjudicating authority to hold that all the goods removed from the premises of M/s. CMS are excisable goods. Interestingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been consistently maintaining that goods like Cooker Parts, Channels, Channels Long, Can Yoke Assy/ Overload, Clutch, Cam indexing unit, Cooker tank, Cooker legs are bought-out items and had produced invoices in support of that contention. However, the adjudicating authority has not accepted the veracity of these invoices and in paragraph 3.21 of the impugned order has merely concluded I also find that the cooker parts are identifiable goods with a distinct use and they have mobility and marketability . He further notes that the act of removal of parts from M/s. CMS s factory made them ineligible for the exemption under Notification No. 217/86 as amended... 10. In the event, we find that the impugned order is only a rehash of the earlier adjudication order No. 37/1993 dated 15.11.1993. There has been no attempt to seriously apply the observations, findings and directions of the Tribunal in the remand order dated 16.10.2000. 11.1 As succinctly observed by the Tribunal in the earlier Final Order dated 16.10.2000, the issue of removing the goods from M/s. CMS to M/s. MOC was only due to the constraint of space and size of the machines which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achineries manufactured by them and transferred to Guindy unit, albeit on a notional value, and, at the time of clearance of complete machineries, they would pay the appropriate duty on the actual value, after adjusting the duty earlier paid by them. 12. From the facts on record, we also find that in respect of the impugned goods, such duty amount paid on provisional basis based on the notional value amounted to ₹ 16,42,425/-, which was, in any case, more than even the enhanced duty demand of ₹ 15,65,921.19/- proposed to be demanded in the corrigendum to the Show Cause Notice. 13. We find that all these factoids had been conveyed to the Department by the appellant in their letter dated 16.03.1992 pursuant to the visit of the officers on 05.03.1992. It is also pertinent to note that Shri. S. Thiagarajan, Cost Accountant of M/s. CMS in his statements dated 10.03.1992 and 10.06.1992 had very much reiterated the same facts. We therefore find that there was nothing mala fide about the practice being followed by M/s. CMS. All the removals, though done only on delivery challans, had been reflected in their R.G. 1 returns. Though specific permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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