2007 (8) TMI 252
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....nformation received, the officers of preventive section of Aurangabad Division. I visited the premises of M/s. Aurangabad Motor Manufacturing Private Ltd. Chitegaon (henceforth called as assessee for the sake of brevity) on 19-12-1998. It was noticed that assessee was receiving dies/moulds on loan/returnable basis from their customer - M/s. Bajaj Auto Ltd. from time to time for manufacturing different spares of motor vehicles and the differential duty payable on the amortised cost of the dies was not included in the rate finalised in the purchase order. The assessee after consultation with its customer paid Central Excise duty of Rs. 1,00,678/- on the clearances made from July, 1998 to July, 1999 towards amortised cost of dies. According to....
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.... The appeal is disposed of by order dated 28-6-2002. It appears that appeal is partly allowed. Learned Commissioner held the assessee liable for penalisation only in forms of Rule 173Q(a) of the Central Excise Rules and hence by changing the designation of the penalty, he has reduced the penalty to Rs. 10,000/- In effect, penalty u/s. 11AC is totally cancel led and instead penalty of Rs. 10,000/- under Rule 173Q(a) is imposed. There is nothing in the order of Commissioner indicating disturbance of any other part of order-in-original. 4. Feeling aggrieved, the department took up the matter before CESTAT and the CESTAT has summarily dismissed the appeal with following observations: "The duty amount involved has been paid by the respondent. ....
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.... M/s. Bajaj Auto Ltd. working under Modvat scheme, in case higher duties were discharged the same would have been taken credit of by the consignee. This ground is urged to claim absence of any wilful intent to evade duty to justify invoking the penal clauses of Section 11AC and 11AB of Central Excise Act." While converting the penalty to one under Rule 173Q instead of Secticn 11AC, the Judge continued in same para 12 by saying, " I observe that even if this argument is accepted ……." the learned Commissioner without saying whether the argument is acceptable or not, has gone hypothetically as if he is accepting the argument and, therefore, has switched over to Rule 173Q for the purpose of imposing penalty. We have already quoted the ord....
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....ere is mens rea or intention on the part of the assessee to evade the duty and suppression etc. I aimed for that purpose. We are afraid, having recorded an affirmative finding on that aspect in para 11 of his "judgment and order, the Commissioner (Appeals) could not have taken diagonally opposite view in para 12 even for the sake of hypothesis and, I therefore, we are convinced that the Commissioner (Appeals) was not justified in converting penalty as one under Rule 173Q instead of as u/s 11AC. The Joint Commissioner in his order-in-original and Commissioner (Appeals) in his order having recorded a finding indicating existence of circumstances as required by Section 11AC, Commissioner (Appeals) was not justified in converting the penalty a....