TaxTMI 
TaxTMI 
2002 (3) TMI 123
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....Steel Limited, Chennai for fabrication, erection and commissioning of one machine in the coal mine of the appellant at Ghugus Colliery, near Chandrapur in Maharashtra, and fabrication and erection of the second machine at another coal mine of the appellant at Sasti Ballarpur in Maharashtra. The machines were erected at site and made operational in 1992. 2.Two notices (one in respect of each machine) were issued by the department on 4-9-1994, to Coromondal Steel Ltd., Heavy Engineering Corporation Limited, and the appellant. The notices demanded duty from Coromondal Steel Limited on the two machines that it had manufactured. It proposed penalty on the manufacturer, Heavy Engineering Corporation Ltd. and the appellant under Rules 209A and ....
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.... concluded that the machines were not immovable property, being "self propelled and walks, moves in the area of the mines." He found that the machines were capable of bought and sold and marketable. He however accepted the contention that the extended period of limitation was not available to the department having been informed of the manufacturer. He said, "In this regard verification of the records available has been got done and it is seen that the department had conducted certain preliminary enquiries about assembling and erection of the machine. The Supdt. incharge of Range-I, Chandrapur vide his letter dt. 8-10-91 has informed the Asstt. Collector, C. Ex., Chandrapur, about the on-going activities regarding the assembly and testing of....
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....howing known intent to evade payment of duty on the part of M/s. Coromondal Steel Ltd. or deliberate contravention of the Rules by them. In view of the circumstances of the case including the fact that the department was aware about the assembly and erection activities being carried out by them and their interest in the goods were limited for just job-work charges and since they are already a closed unit for years, I do not consider it proper and just to impose any penalty on M/s. Coromondal Steel Ltd., at this stage…….. Also there is nothing on record to show that M/s. W.C.L., Ghuggus and M/s. W.C.L., Sasti-Mine and M/s. Coal India Ltd. had acquired possession of the said machines with reason to believe or with the knowledge that the s....
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....r has fixed is appropriate. 6.As we have noted, the Commissioner has emphasised that there was no intent on the part of Coromondal Steel Ltd., the manufacturer of the goods, to pay duty. He has also emphasised that there is no case for imposition of penalty on any of the persons. In the situation, according to us, there was no justifiable basis for ordering confiscation of the machine. 7.The Tribunal has consistently taken the view that in case where infraction is procedure and technical, penalty on the manufacturer or other persons and confiscation of goods are not warranted. Its decision in Lucknow Paper Distributors and Others v. CCE - 1988 (35) E.L.T. 222, had set aside by majority of two to one, the order of the Collector confisc....
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....do not think confiscation is justified. No doubt, there is no specific provision in Rule 173Q(1) requiring presence of mens rea. However, once the demand for duty has been dropped, and that too in absence of any mala fide intention on the part of the manufacturer, what remains is technical contravention relating to not taking out a licence, not filing classification list, not maintaining accounts etc. These lapses on the part of a manufacturer would be inevitable consequence of its belief, which is not challenged - indeed accepted before us, that no duty was required to be paid. One cannot expect a manufacturer to maintain records, file classification list in respect of goods which he believes are not liable to duty on the view that by chan....