TaxTMI 
TaxTMI 
2004 (1) TMI 225
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....ssifiable under sub-heading 8432.00. On verification, it was noticed by the Department that the goods are actually used in the manufacture of Internal Combustion Engines by their customers M/s. Kerala Agro Machinery Corporation Limited, Angamally, Ernakulam district. Since parts of IC Engines are classifiable under sub-heading 8409.00 of the Central Excise Tariff Act, 1985, therefore, a Show Cause Notice was issued to the appellants for demanding duty/differential duty involved under Rule 9(2) of Central Excise Rules, 1944 read with Section 11A of Central Excise Act, 1944. The Show Cause Notice was adjudicated by the Commissioner of Central Excise, Bangalore-II Commissionerate under Order No. 2/98, dated 30-4-1998 where he confirmed the differential duty of Rs. 30,42,131/- and imposed mandatory penalty of equal amount under Section 11AC of Central Excise Act, 1944. He also imposed a penalty of Rs. 5,00,000/- on the appellants under Rule 173Q of the Central Excise Rules, 1944. Against this Order-in-Original No. 2/98, dated 30-4-1998, the appellants had filed an appeal before the CEGAT, Chennai. The Tribunal vide its Final Order No. 2913/99, dated 16-11-1999 had remanded the entire m....
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.... and also classification of essential parts as per Section Note 2(b) of Section XVI. He relied on the following decisions. (1) Diesel Components Works, Patiala v. CCE - 2000 (120) E.L.T. 648 (T) = 2000 (40) RLT 641 (2) CCE v. Bansal Industrial Corporation - 2000 (118) E.L.T. 119 (T) = 1997 (23) RLT 379 (E.R.) (3) CCE v. M.P. (I) Ltd., v. CCE, Pune - 1990 (46) E.L.T. 68 (Special Bench) (4) Bajaj Auto Ltd. v. CCE, Pune - 1994 (74) E.L.T. 599 (Tribunal) (sic) (5) CCE v. Mahendra Engineering Works - 1993 (67) E.L.T. 134 (Special Bench) (6) Kirloskar Oil Engineers Ltd. v. CCE, Pune - 1998 (27) RLT 334 6.Regarding time-bar issue, Shri Sampath pleaded that duty was being paid on the said goods under the very same sub-heading 8432.00 and in all the classification lists, they have classified the goods which were approved under sub-heading 8432.00. From 1-3-1994, they claimed the exemption after the issuance of Notification....
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....bsp; M.P. Tapes - 1998 (103) E.L.T. 128 (T) = 1998 (27) RLT 692 (4) Elgi Equipments - 2001 (128) E.L.T. 52 (S.C.) 9.Smt. Radha Arun, SDR appearing for the Department, pleaded that the plea of the appellants regarding classification is not correct. She relied on the decision of the Tribunal in the case of Sree Ganesh Gears Pvt. Ltd. v. CCE, Bangalore reported in 2002 (139) E.L.T. 307, Luman Metal Industries v. Collector of Central Excise, New Delhi reported in 2001 (130) E.L.T. 338, Punjab Tractors Limited v. Commissioner of Central Excise, New Delhi, reported in 2002 (149) E.L.T. 596. She pleaded that in the case of Sree Ganesh Gears Pvt. Ltd. v. The Commissioner of Central Excise, Bangalore, the cases relied upon by the appellants have been distinguished. She pleaded that part of the part cannot be considered as part of the whole in all the situations. In the present case, the parts are specially designed for the IC engines. Therefore, they are correctly classified under 8409.00. She conceded that penalty under Section 11AC is not imposable for the period prior to 28-9-1996. Regarding the time-bar issue,....
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....cise, Pune reported in 1994 (74) E.L.T. 599, it was held that 'Unspecified parts of such IC engines are also motor vehicle parts and hence legible for exemption under Notification No. 167/79-C.E., dated 19-4-1979'. At that time, in the Tariff under consideration, the parts which were dutiable as motor vehicle parts were specified and the issue was for allowing exemption under Notification 167/79-C.E., dated 19-4-1979. In the case of Diesel Components Works, Patiala v. Commissioner of Central Excise reported in 2000 (120) E.L.T. 648 (T) = 2000 (40) RLT 641, it was held that principal use of components manufactured by the appellants was admittedly as parts of locomotives. In other cases relied upon by the appellants in this case, there was no specific entry for these parts, hence these were taken as parts of the main machine/item. However, in the present case, there is no dispute that the parts in dispute are used in the IC engine. Therefore, the ratio of the decision relied upon by the appellants is not applicable. We find that in this case, the appellants are selling the parts to M/s. Kerala Agro Machinery Corporation Limited, Angamally, Ernakulam district who are partly using thes....
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....pplicable thereto and also SSI exemption Notfn. and were paying duty accordingly. It is an undisputed fact that the assessee had not disclosed the fact to the department either before 1-2-1994 or after that date that the said items were actually the parts of IC Engines and not of the Power Tillers. In the circumstances and without prejudices to the above observations of the Tribunal, I am of the humble view that there cannot be any two situations (one where there was no suppression, when the assessees were paying duty and vice versa) so long as the conduct of the assessee remained the same throughout the disputed period. Hence, the assessee have to be held to have suppressed the facts from the department with an intention to evade payment of duty. In his another attempt to convince the authorities that there was no intention on the part of the assessee to evade payment of duty, the whatever duty that became payable and paid by the assessee would have been taken as Modvat credit by the customer and thereby there would be revenue neutralization. In support of his argument, the Counsel has cited the letter dated 7-4-1997 of the Superintendent of Central Excise, Angamally Range II, Ker....