ORDER
S.S. Sekhon, Member (T)
1.1 This appeal has been filed by M/s. Asea Brown Boveri Ltd., Vadodara (Gujarat) (hereinafter referred to as ABB) against the Order-in-Original dated 24-11-2000 passed by the Commissioner of Central Excise, Jamshedpur, wherein he has held that ABB is liable for penalty under Rule 209A of the Central Excise Rules, 1944.
1.2 Proceedings were initiated against M/s. Union Enterprises, Adityapur, Jamshedpur (hereinafter referred to as the manufacturer) and ABB vide show cause notice No. C. No. IV(16)193/IF/TECH/98/15745, dated 14-9-1999 proposing to re-determine the annual capacity of production, under the provisions of Section 3A, of the manufacturer, demand the differential duty and impose penalty on the manufacturer under Rule 173Q and on ABB under Rule 209A.
1.3 The above proposal was based on the allegation that ABB had aided the manufacturer in evasion of Central Excise duty and had dealt with the M.S. Ingots manufactured by the said assessee allegedly cleared in contravention of the provisions of law with an intent to evade payment of duty.
1.4 The allegation was based on the ground that ABB had in a certificate dated 30-8-97 issued to Union of Enterprises indicated the capacity to be 2.5 to 3 tons whereas the minutes of the meeting held between ABB and the manufacturer on 23-8-97 indicates the furnace parameter as inter alia 3.6 MTs. (Average).
2. After hearing the matter and considering submissions on the materials, it is found that :-
(a) The order-in-original in paragraph 7 has held that the supplier of the furnaces in question, i.e. ABB is liable for penalty under Rule 209A of the Central Excise Rules, 1944. However, the Commissioner in the order portion of the Order-in-Original has confirmed the differential duty and imposed penalty only on the manufacturer. Further, no amount of penalty has been quantified in paragraph against ABB. Therefore, as there is no specific order with regard to penalty on ABB, the impugned order is liable to be set aside as far as ABB is concerned.
(b) Further Rule 209A is applicable when excisable goods which are found to be liable for confiscation and to persons who are concerned with the same, the excisable goods in this case would be output of the furnace and not the furnace, which is the capital goods supplied to by M/s. ABB. There is no findings as regards the liability to confiscation of the furnace and also as regards the liability of ABB to have dealt with the production from such furnace which may be held to be liable for confiscation. Therefore, penalty under Rule 209A cannot be imposed on ABB in the facts of this case.
(c) During the period in question duty under Rule 2(7) was defined to mean meant ‘duty payable under Section 3’ of the Central Excise Act, 1944. In view of Rule 209A is applicable where duty was payable under Section 3 and not under Section 3A.
(d) On merits, the Order-in-original has relied on a certificate given by ABB. The certificate clearly indicates that the crucible capacity of the furnace would vary between 2.5 to 3 MTs. when sponge iron is used. The department has not verified the technical data given to the manufacturers by ABB wherein in indicates that 3.39 tons could be produced when bulk charge i.e. steel scrap is used as raw material. The Commissioner has to determine the annual capacity based on the invoices issued by the appellants and not on the certificate by the furnace manufacturer. Reliance is placed on the decision of Jairaj Ispat v. CCE reported in 2000 (115) E.L.T. 346 and Ganapathi Industries Ltd. v. CCE reported in 2000 (122) E.L.T. 406.
3. In view of our findings hereinabove, the findings as regards liability to pay of penalty under Rule 209A are expunged and the appeals are allowed accordingly.