AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 1450
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....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 Motorcycles, 1073- 1075/14, Hardhian Singh road, Naiwala, ....
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....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. 5,00,000/- each on three directors of M/s Amba Bi-Wheelers under Rule 26 of CER, 2002; and (g) Imposed penalty of Rs. 10,00,000/....
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....iable 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 wherein there was no mention of stock manufactured before 01 June, 2006. The audited balance sheet for the previous period cannot serve the purpose inasmuch as....
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....epartment. 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 the name of Amba Motorcycles and Amba International respectively, partnership firms engaged in import and trading of such imported automobile components and hardware it....
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.... 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 purchases of such goods made during the period from 01 April, 2006 to 03 August, 2006 and deducted the sales made of Rs. 1,87,24,513/- effected during the same period the value of closing stock works out to Rs. 1,74,56,998/- (Cost price) as on 31 May, 2006. These figures are corroborated with the Sales Tax Return, Purchase Invoices, Books of Accounts and Audited Balance Sheets of the appellant. That there is no dispute about the authenticity of the said figures as mentioned in the table hereinabove. These figures as per above table have also not been disputed by the Revenue ....
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....,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 11,81,608 11,81,608 Less Sales made between 1.06.2006 to 3.08.2006 46,21,521(MRP value as Rs.90,61,806/-) 32,26,600 78,48,121 Closing Stock as on 3.08.2006(MRP value as per letter dated 21.08.2006) 31,74,878/- (MRP Rs. 75,84,522/-) 16,78,214/- (MRP Rs. 36,06,948/-) 48,53,092/- (Rs.1,11,91,471/-) 19. The aforementioned work sheet based on the audited records, balance sheet as on 31 March, 2006, Sales Tax Returns, Books of Accounts ordinarily maintained in the course of business was submitted before the court below. Further Amba Motorcycles had been purchasing goods - MV parts from independent vendors and subjecting the goods to process of packing/labeling etc., and have made sales of goods wort....
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....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 within a few days of the date of Notification, by which the activity of labeling, re-labeling and packing, re-packing amounted to manufacture. And further the respondents were under bona fide belief that there was no duty liability on the stock packed before 31 May, 2006. Further value of sales between 01June, 2006 to 03 August, 2006, was less than the value of stock lying packed as on 31 May, 2006. Thus the duty liability was yet to surface and/or arise. Further it has been accepted by Revenue that out of stock aggregating Rs. 1,66,96,969/- at MRP (as per Annexure- I to the Panchnama) included the stock worth Rs. 1,45,43,534/- at MRP being imported goods purchased from M/s Amba International Private Ltd., in duly packed condition, on which appropriate Customs Duty and CVD had already been paid and thus they were mere trading goods. The respondent had produced corroborative evidence being i....
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....l 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 manufacture and these were not aware with the procedures and law governing Central Excise, levied on manufactures. It was only by the fiction of law that the respondents became deemed manufacturers. Appreciating that the appellant were exempt under SSI Notification for their clearances, till the limitation of Rupees Two Crores, but only for the technicality of using brand name of another with respect to some goods that duty came to be chargeable on such goods. Thus appreciating that there is only a venial breach without any contumacious conduct and further taking notice that all such goods were duly accounted for in the books of accounts ordinarily maintained, held that the goods valued at Rs. 1,14,04,676/- at assessable value are liable to confiscation under Rule 25 of CER, 2002, giving option to redeem on payment of RF Rs. 08 lakhs to Amba Bi-Wheelers with further direction that after ....