Tribunal upholds Rs. 5000 penalty, no mala fide intent found. Original penalty reinstated, no additional duty penalty imposed.

The Tribunal upheld the penalty of Rs. 5000 imposed by the original adjudicating authority, finding no mala fide intent on the part of the assessee. The Tribunal set aside the increased penalty of Rs. 1.61 lakhs imposed by the Commissioner (Appeals) and restored the original penalty amount. The demand with interest was confirmed, but no additional penalty equivalent to the duty amount was imposed under Section 11AC of the Central Excise Act, 1944. The appeal was disposed of accordingly.

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Issues Involved:
Determining whether the amortized cost of Dies/Moulds provided by the customer for job-work should be added to the assessable value of the product; Assessing the penalty equivalent to the duty amount in case of evasion of duty.

Analysis:

Issue 1:
The main issue in the appeal is whether the amortized cost of Dies/Moulds provided by the customer for job-work should be included in the assessable value of the product. The appellant argued that they did not receive the cost information from the principal manufacturer, causing a delay in paying the duty. Despite the demands being raised invoking a longer period of limitation, the duty was eventually paid after obtaining the necessary information. The appellant contended that there was no suppression on their part. The Larger Bench decision in Mutual Industries Ltd. was cited, which had ruled on a similar issue against the appellant.

Issue 2:
Regarding the penalty equivalent to the duty amount, the original adjudicating authority imposed a penalty of Rs. 5000, considering the absence of mala fide intent or suppression on the part of the assessee. However, the Commissioner (Appeals) increased the penalty to Rs. 1.61 lakhs, equivalent to the duty amount, on appeal by the Revenue. The appellant argued for restoring the original penalty amount imposed by the adjudicating authority. The Revenue contended that in cases of duty evasion, a penalty equal to the duty amount is mandated under Section 11AC of the Central Excise Act, 1944.

Judgment:
After considering the arguments, the Tribunal noted the absence of mala fide intent as found by the original adjudicating authority. The Tribunal agreed that no penalty was warranted in such circumstances. However, since the appellant did not challenge the Rs. 5000 penalty imposed by the original adjudicating authority, that penalty amount was upheld. The Tribunal confirmed the demand along with interest but set aside the Commissioner (Appeals) order and restored the original adjudicating authority's decision on the penalty. The appeal was disposed of accordingly.

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