Commissioner Of Central Excise, Delhi vs M/S Action Construction Equipment (P) ...

The assessee replied to the show cause notice. The assessee denied that ACE Industries was a dummy unit as alleged by the department. Thereafter, a team of officers from the department visited the premises of ACE Industries. On verification of the records, the department found that ACE Industries was a division of the assessee and that division was dealing in spare parts of the mobile cranes. The department further found that no manufacturing activity took place at the premises of ACE Industries. On 11.6.1999 the proprietor of ACE Industries was examined. His statement under Section 14 of the 1944 Act was recorded in which he confessed that no manufacturing activity was being undertaken at the premises occupied by ACE Industries, and that the entire set up was a devise to evade duty and, at the same time, to avail of the benefit of exemption notification no. 8/99 dated 28.2.1999. He further confessed that the mobile cranes in question were actually manufactured by the assessee and not by ACE Industries.

Being aggrieved by the impugned order of the adjudicating authority, the assessee moved an appeal before the Commissioner (Appeals). By the impugned decision the appellate authority held that, ACE Industries was a non-functional unit created by the assessee to evade excise duty and claimed exemption as a small scale unit; that the said cranes were manufactured by the assessee but they were cleared in the name of ACE Industries and, therefore, there was a clear violation and evasion of duty under Rule 173Q of the Central Excise Rules. The appellate authority further recorded that the assessee had paid the duty pursuant to the order of the adjudicating authority. On account of the said evasion, the department assessed and imposed the duty of Rs. 4,10,144/-. The appellate authority, however, took the view that the normal price which is the basis of the assessable value is cum-duty price. On that basis the appellate authority reduced the assessable value from Rs.26,63,440/- fixed by the adjudicating authority to Rs.22,09,827/- and correspondingly the liability of the assessee stood reduced from Rs.4,10,144/- to Rs.3,53,573/-. Accordingly, the assessee seeks refund.

We are not prepared to examine this question. As stated above, vide order dated 22.9.2003, the appellate authority has held that the price charged by the assessee should be treated as cum-duty price and accordingly reduced the assessable value from Rs.26,63,440/- fixed by the adjudicating authority to Rs. 22,09,827/- Against the order of the appellate authority the department filed an appeal only on the ground that the decision of this Court in Maruti Udyog Ltd. (supra) was pending re-consideration vide Review Petition (C) No. 75/2003. In this connection, the department placed reliance on the Board circular No. 749/65/2003-CX dated 26.9.2003, which is quoted hereinbelow:

The Hon'ble Supreme Court vide its Order dated 9-12-2004 has dismissed the Review Petition (C) No. 75 of 2003 in Civil Appeal No. 3783 of 2000 and other related matters filed by the Department. Copy of the judgment is enclosed [See: 2004 (179) E.L.T. A102].

In view of above the above Circular dated 26-9-2003 is hereby withdrawn.

It is requested that this may be brought to notice of all concerned for taking action accordingly."

In the circumstances, on the facts of this case, there is no merit in this civil appeal and the same is dismissed.