TaxTMI 
TaxTMI 
2018 (4) TMI 1450
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....e goods through their associate firm M/s Amba Motorcycles, 1073-1075/14, Hardhian Singh Road, Naiwala, Karol Bagh, New Delhi-5. The Directors of Amba Bi-Wheelers are S/Sh. Sanjeev Kapoor, Sunil Kapoor and Sandeep Kapoor, all residing at N-35, Greater Kailash, Part-I, New Delhi, from where also a firm M/s Amba International was operating/importing Auto Parts. The process of packing/repacking, labeling/relabeling Auto Parts being carried by the party under the brand name of 'Top' and 'Ninja' became amounting to manufacture w.e.f. 01.06.2006 vide Notification No. 2/2006-C.E. (NT) as amended vide Notification No. 11/2006-C.E. (NT) dated 29.05.2006 read with Section 2(f)(iii) of the Act. The goods so manufactured were classifiable under Chapter heading 87 of Central Excise Tariff Act, 1985 attracting Central Excise duty @ 16% + Education Cess @ 2% ADV. The party was found not registered with Central Excise Department. 3. Simultaneous searches were conducted on 03.08.2006 on the basis of search warrants issued by the Jurisdictional Assistant Commissioner of Central Excise, New Delhi at 1)M/s Amba Bi Wheelers Pvt. Ltd., 3-C/8, New Rohtak Road, new Delhi - 110005, 2) M/s Amba Motorcycle....
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....to be Rs. 90,38,376/- (MRP) on which duty liability came to Rs. 9,80,917/- 9. That SCN dated 31.01.2007 was issued for confiscation of seized goods, recovery of duty of Rs. 45,73,247/- alongwith interest and for penal action. 10. That the Adjudicating Authority passed O-I-O dated 31.03.2008, whereby he: (a) Confiscated the goods valued at Rs. 3,16,93,424/- (MRP) lying in the premises of M/s. Amba Bi-Wheelers and redeemable the goods on payment of Redemption Fine of Rs. 80,00,000/-; (b) Confiscated the goods valued at Rs. 49,349/- found lying at transport company with an option to redeem the same on payment of Redemption Fine of Rs. 12,5000/-; (c) Confiscated the goods valued at Rs. 75,92,061/- (MRP), found lying in the premises of M/s Amba Motorcycles with an option to redeem the same on payment of Redemption Fine of Rs. 19,00,000/-; (d) Confirmed the demand of Rs. 45,73,247/- on Amba Bi- Wheelers under Section 11A of the Central Excise Act, 1944, alongwith interest under Section 11AB of the Act; (e) Imposed penalty of Rs. 45,73,247/- on M/s Amba Bi- Wheelers under Section 11 AC of the Act; (f) Imposed penalty of Rs. 5,00,....
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.... of Rs. 75,92,061/-, a stock of Rs. 60,84,380/- (MRP) belonged to stock held as on 31.05.2006, i.e., stock manufactured prior to 01.06.2006, was not dutiable and remaining stock of Rs. 15,03,027/- (MRP) packed after 31.05.2006 was also entitled for SSI exemption under Notification No. 8/2003, as they did not cross the SSI exemption limit and Brand name belonged to them. Therefore, set aside the confiscation. 11.3. That regarding confiscation of goods valued at Rs. 49,349/- seized from the premises of the transporter, the respondent had not challenged, therefore, confiscation was upheld. 11.4. That penalties under Rule 26 of CER, 2002, were set aside. 12. Being aggrieved the Revenue is in appeal on the following grounds:- The learned Commissioner (Appeals) have erred by setting aside the demand of duty from Amba Bi- Wheelers Pvt. Ltd., in respect of goods cleared by them to various buyers against invoices valued at Rs. 3,31,00,488/- (MRP) and assessable value of Rs. 2,20,11,825/-, during the period from 01 June, 2006 to 03 August, 2006, on the basis of audited balance sheet submitted by them, by ignoring the statements tendered by Shri Sanjeev Kapoor and Shri Sunil Kapoor w....
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....er dated the 08 August, 2006, but without acknowledgement. Such letter cannot be relied upon especially when there is no evidence of tendering the letter to the Department. 15. The learned Commissioner (Appeals) have further erred in accepting the plea of the respondents that they had filed declaration(s) to the Department, whereas Shri Sanjeev Kapoor had categorically stated that no declaration had been filed as required under the Central Excise Law nor any evidence had been produced in this regard. Accordingly, the learned AR prays for setting aside the impugned order and restoring the Order-in-Original. 16. The learned counsel for the appellant Mr. Bipin Garg supports the findings of the learned Commissioner (Appeals) and further states that the appellant have also filed Cross Appeal No. E/CROSS/99/2012. In the cross objection the respondents have challenged the confiscation of goods in part (Rs.1,71,49,890/- at MRP) and have also challenged the levy of redemption fine of Rupees Eight Lakhs and further levy of penalty was Rupees Two Lakhs. The learned counsel further states that the brand name 'Top' and 'Ninja' belong to the respondents as these brands are registered in th....
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....2,25,93,312 Add Purchases made between 1.06.2006 to 3.08.2006(Submitted to the Department vide letter dated 21.08.2006) 1,29,12,024 (Cost Price) 81,74,119 2,10,86,143 Less Sales made between 1.06.2006 to 3.08.2006 1,66,64,068 (MRP Rs. 3,33,28,136/-) 88,99,851 (MRP Rs. 1,27,14,072/-) 2,55,63,919 (MRP Rs. 4,60,42,208/-) Closing Stock as on 3.08.2006(MRP value as per letter dated 21.08.2006 Submitted to the Department) 1,47,04,798 (MRP Rs. 3,14,09,285/-) 52,11,568 (MRP Rs. 85,89,365/-) 1,99,16,367 (Rs.3,99,98,650/-) 17. The said statement being based on the audited records of the respondents and books of account maintained, the learned Commissioner have rightly appreciated that Amba Bi- Wheelers were having closing stock of goods valued at Rs. 1,04,04,628/- at cost price as on 31 March, 2006 of 'Top' and 'Ninja' brand goods and further after adding purcha....
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.... other companies the names of some of them were stated in their statement which have also been taken notice in the show cause notice. M/s Amba Motorcycles also submitted details of closing stock and turnover based on audited balance sheet, books of account etc., for the period from 31 March, 2006 to 03 August, 2008, on 21.08.2006 during the adjudication proceedings as follows: - Particulars TOP & NINJA Others (Trading) Total Opening Stock as per last audited Balance Sheet as on 31.03.2006 1,17,01,736 55,06,700 1,72,08,436 Add Purchases made between 1.04.2006 to 31.05.2006 9,77,649 9,77,849 Less Sales made between 1.04.2006 to May 31, 2006 53,47,169 30,76,498 84,23,667 Closing Stock as on 31.05.2006 71,03,172 35,61,875 1,06,65,047 Add Purchases made between 1.06.2006 to 3.08.2006 &nb....
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.... - CE. As they did not cross the SSI limit during the said period from 1 June, 2006 to 03 August, 2006. Thus it is established that Amba Motorcycles had stock of motor vehicle parts of 'Ninja' and 'Top' brand of Rs. 1,17,01,736/- at cost price held by them as on 31 March, 2006, as per the audited balance sheet and thus was stock packed prior to 31 May, 2006, and further the same was not procured from Amba Bi- Wheelers Private Ltd., as have been alleged by Revenue. 20. As regards confiscation of goods worth Rs. 3,16,93,424/- seized from the premises of Amba Bi-Wheelers Private Ltd., on the ground that same were bearing the brand name 'Top' and 'Ninja' was not owned by them and had been stocked with intention to remove without payment of duty. The learned Commissioner (Appeals) have found that the seizure was uncalled for and unwarranted as no clause of Rule 25 had been contravened as the goods in question were accounted for barring marginal and negligible arithmetical discrepancy. It was also noticed by learned Commissioner that the respondent Amba Motorcycles had filed, as well as Amba Bi- Wheelers had filed the required declaration (SSI) duly acknowledged by the Department with....
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....to Central Excise Duty being imported goods received in fully packed condition of 'Top' brand. It was further held that the remaining goods worth Rs. 1,71,49,890/- at MRP (Rs.3,16,93,424/- - Rs. 1,45,43,534/-) having assessable value at Rs. 1,14,04,676/- after allowing the rebate of 33.5% will be held liable to confiscation as the same had been packed/manufactured by affixing the brand name of some other person after 31 May 2006 without obtaining Central Excise Registration, related to the period after 01 June, 2006. It was further held that the appellant is not entitled to SSI exemption on these goods. Accordingly, confiscation of goods valued at Rs. 1,45,43,534/- at MRP was set aside. The learned Commissioner also accepted the contention of Amba Bi-Wheelers that they were under bona fide belief that they would be covered by the SSI exemption and duty liability has still to surface till the stocks packed before 31 May, 2006, were finally exhausted. The learned Commissioner appreciating the law being duly made applicable to packing, re-packing was made dutiable with effect from 1 June, 2006, prior to that the respondents are merely engaged in trading activity, is not amounting to m....
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....essary ingredients that is, the knowledge and reasons to believe that the goods which the person had dealt with were liable to confiscation, is completely missing in the facts of the case. Further finding was recorded that the Adjudicating Authority have imposed penalty under Rule 26 without there being any evidence on record in support of the allegations that the respondent(s) had knowledge or had reasons to believe that the goods in question were liable for confiscation under the provisions of Central Excise Law. It was also observed that the stocks seized from the respondents was duly accounted for in the books of accounts and that did not establish that there was an attempt to remove the goods in question clandestinely without issue of invoices/bills. Accordingly, the learned Commissioner was pleased to allow the appeal in part of Amba Bi-Wheelers and further pleased to allow the appeals of the other respondents. 23. The respondent-assessee Amba Bi-Wheelers is in cross objection against retention of confiscation of goods worth Rs. 1,14,04,676/- at assessable value. The learned counsel points out from the impugned order that, the learned Commissioner (Appeals) have accepted t....