TaxTMI 
TaxTMI 
2001 (5) TMI 109
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....d from October, 1991 to April, 1996. The Commissioner, Central Excise, under the impugned Order No. 124/97, dated 30-12-1997, confirmed the demand of duty amounting to Rs. 56,14,293/- and imposed a penalty of equal amount on the Assessee Company. She also imposed a penalty of Rs. 25,000/- each on Shri B.R. Punj, Managing Director and Shri R.P. Sharma, Branch Head at Mumbai holding that the fact that the goods came into existence from two different units would not make a difference as items are for the sake of convenience supplied in CKD condition; that the duty earlier was charged on par with air-conditioner but not as air-conditioner and the duty structure was laid down by the Government but not for classification. 3.Shri V. Lakshmikumaran, learned Advocate, submitted that M/s. Fedders Llyods Corporation manufacture air-conditioners, condensing units and cooling units for split air-conditioners at their factories situated at Kalkaji (New Delhi) and Noida; that whenever condensing units with pipe kits and cooling units are cleared together, it is cleared as split air-conditioners on payment of duty on the whole value; that whenever only condensing unit is cleared along with pipe....
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....plete or unfinished; that they simply fit them in customers' premises; that split air-conditioner is always assessed as fully manufactured item; that the Central Board of Excise and Customs clarified vide Circular dated 12-7-1996 that units of split air-conditioner cannot be treated as parts and when cleared separately will not be eligible for concessional rate of duty available to the parts of air-conditioners under Notification No. 56/95, dated 16-3-1995; that they have followed Note 4 to Section XVI as they had classified their product as air-conditioner. 4.The learned Counsel also mentioned that they had no reason to believe that there was manufacture at the point of installation; that the manufacture which is alleged in the impugned Order is out of a strained interpretation and the suggestion of the Department that there is manufacture is not well founded and accordingly question of any suppression on their part does not arise. He said that a reference was specifically raised by M/s. Voltas Ltd. with the Chief Commissioner, Mumbai/Commissioner Excise, Mumbai-III after the duty was made chargeable ad valorem; that M/s. Voltas suggested that if duty is to be paid @ 40% on con....
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....arger Bench of the Tribunal in Srichakra Tyres case. Regarding imposition of penalty, the learned Advocate mentioned that Section 11AC came into effect, only on 28-9-1996 and the entire demand is prior to that date and as such penalty is not imposable as held in the case of Marcanday Prasad Radhakrishnan Prasad P. Ltd. v. CCE - 1998 (102) E.L.T. 705 (T) and appeal has been dismissed against this decision by the Apex Court as reported in 1999 (107) E.L.T. A121; that no penalty is imposable on two other appellants as the Commissioner has not discussed anything in the impugned Order nor given any finding therein. 6.Countering the arguments, Shri R.K. Sharma, learned SDR submitted that only after the registration of a case against M/s. New Gold Air Conditioners, a unit manufacturing 'Cooling unit', the Department came to know that the Appellants were manufacturing and supplying a complete set of split air-conditioners to various customers in Maharashtra, Gujarat and Goa; that the Appellants at their workshop/godown were carrying out certain checks for quality by filling gas; that brand name 'Fedders Lloyd' was also affixed on the cooling unit procured from New Gold Air Conditioners;....
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....premises have the essential character of the complete or finished goods and as such excise duty on split air-conditioner becomes payable by the Appellants before its clearance to the customers' site. Shri Raghunath Prasad Gupta, Commercial Manager of the Appellants at Mumbai, has mentioned in his statement that a complete unit of split air-conditioner was supplied to various customers in and around Mumbai. We also agree with the learned SDR that provisions of proviso to Section 11A(1) of the Central Excise Act for demanding duty for extended period are invokable in the present matter as the fact of manufacture of the split air-conditioner was suppressed from the Department by the Appellants. The letter dated 6-7-1995 from M/s. Voltas Ltd. addressed to the Commissioner, Bombay-III and the Principal Commissioner, Central Excise, Bombay cannot be, by any stretch of imagination, treated as a disclosure of the activity of manufacture of split air-conditioner by the Appellants. The Board's Circular No. 479/45/99-CX, dated 17-8-1999 relates to the question whether fitting of duty paid parts and components of an air-conditioner in a car amounts to manufacture. The activity was not consider....