TMI Blog2004 (12) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... ued on 2-12-98 under the proviso to Section 11A(1) of the Central Excise Act. It alleged "wilful misdeclaration, suppression of facts and contravention of rules with intent to evade payment of duty" for the purpose of invoking the proviso. In the impugned order, ld. Commissioner justified the invocation of extended period of limitation by recording a finding of "suppression" in para 52 of the impugned order. He also imposed a penalty of over Rs. 1 crore on the assessee under Rule 173Q of the Central Excise Rules for the period November, 1993 to 28-9-1996 and another penalty of Rs. 40 lakhs under Section 11AC read with Rule 173Q for the period 29-9-96 to September, 1998. 2.We have examined the records and heard both sides. Ld. Sr. Counsel has chosen to address the penalty issue first. According to him, both the penalties are liable to be vacated in view of the fact that the entire amount of duty had been paid prior to issuance of the show cause notice. Ld. Sr. Counsel has relied on the Tribunal's Larger Bench decision in C.C.E., Delhi v. M/s. Machino Montell (I) Ltd. [2004 (168) E.L.T. 466 (Tri. - LB), as also on the Tribunal's decision in. M/s. Rashtriya Ispat Nigam Ltd. v. C.C.E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and finished goods have been addressed today by ld. Counsel, Shri S. Jaikumar. It is submitted that duty was correctly paid on the components cleared by Unit No. 1 to Unit No. 2, on the basis of assessable value arrived at by the 'cost of production' method under Rule 6(b)(ii) of the Valuation Rules. The Revenue also valued these goods under the same provision. The only objection raised by the Revenue is that certain overheads were not included in the assessable value. It is contextually pointed out that the assessee would not mind accepting this objection of the Revenue. Ld. Counsel, however, pleads strong case on limitation against the demand of duty on components. Referring to the findings recorded in para 52 of the impugned order, ld. Counsel submits that ld. Commissioner wrongly invoked the larger period of limitation by recording a finding which is beyond the scope of the show cause notice. It is also submitted that the assessee had no intention to evade payment of duty inasmuch as any duty paid by Unit No. 1 would be available as Modvat credit to Unit No. 2. Therefore, according to ld. Counsel, the demand of duty on components is time-barred. 5.Referring to the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de out of Service Station without payment of duty during the period of dispute. The statement of Shri Lakshminarasimhan regarding the quantum of such replacements was corroborated by Suryaprakash. According to ld. SDR, in view of such admission by the Company official, the demand of duty on the replacements cannot be validly contested on the ground of lack of evidence. It is pointed out by ld. SDR that Shri Suryaprakash admitted undervaluation of components also. On the limitation issue, the Commissioner's findings are reiterated. 8.After giving careful consideration to the submissions, we find that, on the penalty issue, the appellants have a good case based on case law. It is an admitted fact in this case that the entire amount of duty demanded was paid prior to the issuance of show-cause notice. It has been held in the cases cited by ld. Sr. Advocate that, where duty was paid prior to the issuance of show-cause notice, no penalty was liable to be imposed on the assessee under Section 11AC or under Rule 173Q. Therefore, the penalties imposed in this case under the said provisions of law are liable to be vacated. 9.On the demand of duty on waste and scrap, again the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t period was not such as to affect the production of the document or the accuracy of the contents; and (d) the information contained in the statement reproduced or is derived from information supplied to the computer in the ordinary course of the said activities." Ld. Sr. Counsel has argued that the above conditions were not fulfilled in respect of the computer print-out taken from the personal computer of Shri Sampath Kumar. It appears from the statement of Shri Sampath Kumar and the averments in the memorandum of appeal that it is an admitted fact that Shri Sampath Kumar was the person having lawful control over the use of the computer. The computer was not shown to have been used regularly to store or process information for the purposes of any activities regularly carried on by the company. It was also not shown that information of the kind contained in the computer print-out was regularly supplied by the Company to the personal computer of Shri Sampath Kumar in the ordinary course of activities. Again, it was not shown that, during the relevant period, the computer was operating in the above manner properly. The above provision also casts a burden on that party who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch clearances. This proposition is acceptable to the assessee. As a matter of fact, they have conceded duty liability of Rs. 18,74,461/- on admitted replacements. Shri Lakshminarasimhan stated that 90% of the original equipments were cleared by way of replacements. This statement was given by a person who was in-charge of the Service Station from where the subject clearances were made only for a brief period of 9 months (January to September, 1998). What was stated by Shri Lakshminarasmihan was not corroborated by anybody in charge of the Service Station for the period of dispute. No independent positive evidence of clandestine removal is also available in respect of the equipments. There is no rebuttal to the assessee's case that the finding that 90% of the OE clearances were replacements is not supported by anything contained in the registers maintained in the Service Station. We do not find sufficient evidence to support the Commissioner's finding that 90%, OE clearances were replacements attracting levy. 12.The appellants seem to have a good case on the limitation issue as well. Ld. Commissioner, in para 52 of his order, recorded a finding of suppression of "the fact" and mis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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