2008 (2) TMI 112

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....ared to the balance recorded in the RG1 register was detected.  The finished goods, i.e. HDPE pipes of various qualities involving duty of Rs.3,75,791/-, were found short.  The assessee paid central excise duty on such shortage.  Further scrutiny of records revealed that the assessees cleared their goods, viz. HDPE pipes sprinkler irrigation, to various depots all over India, from where they finally sold to customers/dealers.  Price declaration of the finished goods was filed by the assessees and it was noticed that the assessees had charged a higher price for sprinkler coupler than declared in annexure-II.  It was also found that they were charging their customer for one more item, viz. pump connecting nipple (PCN)....

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....al for functioning of portable irrigation system. 2. In the light of the above, show cause notice proposing confirmation of duty already paid on finished goods found short and proposing recovery of duty of Rs.12,20,623/- on the clearance of sprinkler coupler during the period November 1996 to January 1999 and PCN during the period November 1996 to August 1998 and proposing recovery of interest and imposition of penalty and confiscation of land, plant, building, machinery etc., was issued.  The notice was adjudicated by the Additional Commissioner who confirmed the duty on shortage of finished goods and duty of Rs.9,49,880/- and Rs.2,70,743/- together with interest and also imposed a penalty of Rs.16,00,000/- + Rs.1,00,000/- upon the....

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....s manufactured by the respondents is whether they are integral parts of the sprinkler irrigation system.  The Commissioner (Appeals) has only considered that the final products of the respondents are pipes and fittings and has not examined the question as to whether bought out items form an essential part of the sprinkler irrigation system which was cleared to various depots for ultimate sale to customers.  The deputy manager of the respondents as well as the manager of M/s. Mohit Engineering, one of the respondents' customers, have both categorically stated that saddle and PCN are integral parts of the sprinkler coupler and vital for its function.  Therefore, they are both essential items and the value thereof is required to....