TaxTMI 
TaxTMI 
2026 (9) TMI 290
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....mption (SSI) vide Notification No. 08/2003-CE dated 01.03.2003. The appellant after crossing the turnover of Rs.1.50 crore obtained Central Excise registration. 3. The Department alleging that the electronic auto / taxi fare meters manufactured by the Appellant which are exclusively meant for use in autos and taxies are to be considered as parts and components of automobile, and as per Sl. no 97 of Notification No. 11/2006-CE(NT) dated 29.05.2006 as amended, Appellant is liable to pay excise duty on the maximum retail price (MRP) valuation by availing an abatement of 33.3% which was subsequently reduced to 30%. Accordingly, for the purpose of computing the turnover to avail SSI exemption, value as per Section 4A of Central Excise Act, 1944 has to be adopted and based on that it was held that Appellant had crossed the limit of Rs. 1.50 crore even before obtaining central excise registration. 4. Accordingly, a show cause notice was issued and Adjudication authority as per order dated 29.04.2011 confirmed the demand along with interest and also imposed penalty. Aggrieved by the said order, an appeal was filed before the Commissioner (Appeals) and Commissioner (Appeals) as per th....
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.... meter is not at all essential for the functioning of an automobile. Therefore, the impugned goods viz., 'auto / taxi fare meters' by no stretch of imagination can be called as 'Parts, components and assemblies of automobiles'. A 'fare meter' cannot be a part of automobile since it is not essential for functioning of automobile. In order to qualify as a 'part' it has to be an essential component of the whole without which the whole cannot function as held by the Hon'ble Apex Court in the case of Commissioner of C. Ex., Delhi Vs. Insulation Electrical (P) Ltd. [2008 (224) ELT 512 (SC)] wherein it is held that:- "18. After considering in detail, the difference between the 'accessories and 'parts', this Court in the case of Pragati Silicons (supra) came to the conclusion that 'accessory' is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product. 19. Chapter 9401 covers all types of seats and not only the seats of a car and a seat is complete even without the rail assembly from seat, adjuster/assembly slider seat and rear back lock assembly. They are n....
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....s. They cannot also be called accessories. We do not find on record copies of the order placed by overseas buyers on Bajaj and API to know whether the overseas buyers wanted auto-rickshaws taxis or auto-rickshaws simplicitor. These documents would not be in the possession of the appellants. The Department had by issue of Show Cause Notice set aside the order in appellants favour passed by the A.C., Central Excise. One would expect the Department to place a copy of this order before the Bench. That has not been done." 10. As regards the demand confirmed by invoking the extended period of limitation and imposition of penalty, Learned Counsel submits that; the entire issue in this proceeding relates to genuine and bona fide interpretation of statutory provisions, which are not free from doubt. It is well settled that when the issue relates to interpretation of statutory provisions there cannot be any question of mala fide on the part of the assessee and does not call for imposition of penalties. Hence, penalties imposed in the impugned order under various sections cannot be sustained in law. In this regard, attention is invited to the decision of the Honorable Supreme Court in UOI ....
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....ny evidence in this regard has been produced either in Show Cause Notice or Order-in-Original or Order-in-Appeal. 12. Learned Authorised Representative (AR) reiterated the finding in the impugned order and reiterates the findings in the Order-in-Original dated 29.03.2011 wherein it is held at that; "Further it has also been revealed that the said electronic auto the taxi fare meters are tested in their factory and then wrapped in bubble sheet and about 25 such meters are packed in a carton box and dispatched to the dealers. At the time of dispatch, empty carton boxes are sent for each meter to the dealer because the meters will have to be tested and certified by the Legal Metrology Department of the respective states. After such testing by the dealers, the unit carton boxes are used to pack the meters. MRP of the product is mentioned on the unit carton boxes sent. At the time of sale by the dealer, the meter will be installed in the vehicle and sold. Since the meter is on retail sale, the unit carton box is used. The above facts are not in dispute. Further, Notification No. 11/2006-CE dated 29.05.2006, Notification 14/2008 CENT dated 01.03.2008 and Notification 49/2008 CENT date....
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....ue. Thereby they have violated Rules 4, 6, 9, 11 & 12 of Central Excise Rules, 2002 and duty of Rs. 15,27,062/- is liable to be recovered from them under the proviso to Sub-section (1) of Section 11A of Central Excise Act, 1944 along with interest under Section 11AB of Central Excise Act, 1944 and penalty under Section 11AC of the Central Excise Act, 1944." 13. In rejoinder, Learned Counsel for the Appellant submits that as per the impugned order, Adjudication authority itself admits that issue being interpretive in nature and there being no seizure and confiscation of goods, I take a lenient view for imposition of penalty under Rule 26 on the Proprietor of M/s Smart Technology System as per the ratio of the case laws cited as relevant to the issue. And thus, in the absence of any appeal filed by the Department challenging the said finding, no allegation can be made that the Appellant had suppressed the facts for evasion of excise duty and thus the demand confirmed by invoking the extended period of limitation is unsustainable. As regards penalty on the appellant under Section 11AC of the Central Excise Act, 1944, Learned Counsel submits that it is unsustainable. 14. Heard bo....