TaxTMI 
TaxTMI 
2016 (7) TMI 1071
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....ing. The bought out items are sold as such without any value addition. The kit comprising of the manufactured and the bought out items are listed below: a. Evaporator assembly b. Liquid Tube c. Hose discharge d. Condenser e. Compressor f. Receiver drier g. Clutch assembly h. Bracket condenser mounting i. Bracket suction hose mounting j. Grommet k. Drain hose l. Bracket compressor mounting m. V-Belt 2.1 It was submitted by the appellant that during the period in dispute (1.3.2000 to 30.6.2000), both the air conditioning machine as well as parts thereof were classifiable under Chapter sub-heading 8415 00 as per Section Note 2(a) to Section XVI. The Section Note 2(a) reads as under: 2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; Prior to the impugned per....
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....nd along with interest. The order also imposed equal penalty on the ground that appellant had willfully misstated the description of their product as parts to avail the exemption of SED which otherwise would not be eligible. The original authority also held that the differential duty was not paid voluntarily and was paid only after the visit of central excise officers on 15.7.2000. Aggrieved by the said the appellant is in appeal before Tribunal. 3. Shri Raghavan Ramabhadran, Ld. Advocate appearing on behalf of the appellant submitted that the appellant always classified their products as parts of car Air Conditioner and never as a complete air conditioner machines. The sequence of events that happened from 1st March 2000 till 19th July 2000 are clear enough to show that the offence case was booked against the appellant only based on the declaration (dated 1.7.2000) received by the department on 10.7.2000. Consequently, there is no intention to evade payment of duty and therefore, extended period of limitation is not invokable and on such score, the proceedings fail. 3.1 He further submits that Penalty under Section 11AC and interest under Section 11AB of the Central Excise Act a....
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....declared the goods as assemblies. He referred to page 36 of appeal paper book and referred to para-22 of the order wherein finding on wilful misstatement is recorded. He also referred to page 35 of appeal paper book and referred to paras 17 to 20 and submits that plea of the counsel that they are law-abiding cannot be accepted. 5. In counter, the ld. counsel submitted that Ld. A.R's argument that the payment was made consequent to the recording of the offense case against the appellant on 15.7.2000 is incorrect. The appellant informed the department of their intention to pay the entire differential duty vide letter dated 1.7.2000, much prior to the booking of the offense case. The argument that the appellant wilfully misstated their product as parts of air conditioner only after the introduction of the exemption to SED vide Notification No. 6/2000-CE is incorrect. The appellant has all along been classifying their product as parts. The 173B declaration filed vide letter dated 6.4.1999 which is much prior to the Budget 2000 clearly disclosed the appellant s product as parts of air conditioner assembly . He submits that when there is no misstatement, no penalty is imposabl....
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....nnai Bench in the case of CCE Chennai Vs Johnson Lifts 2006 (201) ELT 337 (Tri.-Chennai). 7. In our view, penalty imposed under Section 11AC of the Central Excise Act, 1944 is not imposable in the instant case on account of the following : a) The Appellant on their own have filed declaration under Rule 173B of the Central Excise Rules on 01 March 2000 and on 01 July 2000. While the former declaration was filed on the ground that the said levy of Special Excise duty was not applicable to them, the latter declaration was filed to the effect that the Appellant had agreed to pay the Excise duty @ 32% (including the Special Excise Duty). This in our view is a sufficient ground for setting aside penalty imposed, as the circumstances which warrant the invocation of penalty u/s. 11AC is not present in the instant case. b) The Appellant vide their letter dated 01 July 2000 has sought for the revised classification and also the procedure to pay the excise duty for the period 01 March 2000 to 30 June 2000. Having done so, we do not find any merit in the contention of the Learned Commissioner that the Appellant have suppressed the material information from the Department. In this reg....
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....earned Advocate has emphasised that as there was no suppression or wilfull misstatement on their part, imposition of penalty on the Appellants under Section 11AC of the Central Excise Act is not warranted and if their this contention is accepted they would not challenge the demand of duty confirmed against them. We, therefore, first take up this aspect as to whether there was any suppression of facts or misstatement on the part of the Appellants. It has been alleged in the show cause notice dated 30-3-2001 that the Appellants, despite the knowledge that the goods cleared by them are in the nature of air-conditioning machines, misstated the facts and availed the exemption from SED on parts, thereby knowingly evaded the payment of SED during the period 6-3-2000 to 3-8-2000. The Commissioner has given his findings that both plants were manufacturing a complete air-conditioner system in the individual units relying the declarations filed by them on 1-3-2000, 6-3-2000 and 4-8-2000 and they paid the duty only when they came to know that a show cause notice was being contemplated. It is not the case of the Revenue that the Appellants did not file the declarations as required under Rule 17....
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....claiming benefit of exemption Notification cannot amount to wilful misstatement warranting imposition of penalty under Section 11AC of the Central Excise Act. It has been also the consistent view of the Tribunal that when classification list/declaration has been filed by the manufacturer, extended period of limitation cannot be invoked meaning thereby that none of the ingredients mentioned in the proviso to Section 11AC(1) of the Central Excise Act can be alleged against the manufacturer. It has been held by the Supreme Court in Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) that mere failure or negligence on the part of the producer or manufacturer either not to take out a licence in case where there was a scope for doubt as to whether a licence was required to be taken out or where there was a scope for doubt as to whether goods were dutiable or not, would not attract Section 11A of the Act. In the present matters, there is doubt about the nature of the goods whether parts or air-conditioner system and Rules of Interpretation and Section Note are being resorted to ascertain as to benefit of Notification is available or not. Thus penalty under Section 11AC and interest unde....