TaxTMI 
TaxTMI 
2003 (3) TMI 380
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....and that the benefit of neither Notification No. 75/87 nor Notification No. 1/93 was available. It was alleged that the goods bore the brand name "North Star" which belonged to the "North Star Icemaker Equipment Corporation of U.S.A" and, therefore, the benefit of the SSI exemption was not available on these goods. It was further claimed that additional consideration in the guise of consultancy charges was collected from the buyers through M/s. Rifostar Equipment Sales (RES). M/s. Rifostar Equipment Sales was a sister unit of NIEC and Shri C.S. Gandhi, partner of NIEC was the Director of RES. It was further alleged that the value of several bought out components had not been added when computing the assessable value of the machines. The duty allegedly short-levied also was on the count that on behalf of the assessees, M/s. Rifostar Equipment Sales were collecting consultancy charges, which charges were also addable to the assessable value. On this ground and on the ground that the duty under sub-heading 8419.00 was higher, the total demand of duty amounting to Rs. 1,15,28,519/- was alleged to be short-levied and was demanded. Allegation was also made that penalty was imposable upon....
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.... permitted redemption thereof on payment of fine of Rs. 10 lakhs. He imposed penalties of Rs. 5 lakhs on Shri C.S Gandhi and Rs. 1 lakh on M/s. Rifostar Equipment Sales, under the provisions of Rule 209A of the Central Excise Rules, 1944. These appeals arise out of this order. 4. We have heard Shri V. Sridharan, Advocate, along with Shri S.P. Sheth, Advocate, for the appellants and Shri B.B. Sarkar, DR for the Revenue. 5. We have carefully considered the submission made and have seen the citations. 6. At the outset Shri Sridharan referred to a miscellaneous application filed in October, 2002, for placing on record additional grounds. We have seen this application. The first ground is that as follows : "The applicant say and submit that the product is correctly classifiable under sub-heading 8419.00 of CETA, 1985." Counsel, however, did not persue this ground. 7. The competing entries in this case read as below : "8418.00 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air-conditioning machines of heading No. 84.15 "8419.00 Machinery, plant or laboratory equipment, whether or not electrical....
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.... "North Star" was written with a marker (emphasis added). Evidence of such pathetic proportion does not suffice to deny the benefit of this notification. 13. As regards the consultancy charges, Shri Sridharan referred to the Annexure 'C', to the show cause notice, which shows that the consultancy charges were collected only in the case of 9 machines out of 63 machines sold. It was the claim of Shri Sridharan that the consultancy charges were not collected from every buyer and there were no nexus to the manufacturing operations or costs. In the light that the collection was not made from every buyer, it is accepted that the consultancy charges was not addable to the assessable value. It is therefore, not material whether the assessees had requested their clients to split the orders and to request for consultancy from M/s. Rifostar Equipment Sales. If it had been the intention to divert a part of the assessable value, under the guise of the consultancy charges then the practice could have been adopted for all the clients and would not have been limited to 9 out of 63. 14. The Commissioner, in para 8 of his order has dealt with includability in the assessable value of the ....
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.... The manner in which the value of the bought out items was sought to be kept out of the assessable value, proves the existence of mala fides of part of NIEC. The demand for the extended period on this ground would sustain. 19. The total demand allegedly for the duty short-levied is the composite figure on various grounds. The show cause notice does not show as to the quantum of duty short-levied per charge. If the entire duty was demanded on the ground that the correct classification was under Heading 84.19, then the plea of Shri Sridharan that on the Commissioner's finding no demand would remain tenable. But out of the multiple factors allegedly resulting in the duty short-levied, we have upheld only the addability of the value of bought out items. In the absence of any material for re-determination of the duty short-levied, we would have to remand the proceedings to the competent adjudicating authority for re-determination of the duty on this count. 20. We have also considered the submission on the aspects of penalty on M/s. Rifostar Equipment Sales which is essentially for their having aided and abetted NIEC by accepting consultancy charges. Since we have held that c....