ORDER
M.V. Ravindran, Member (J)
1. This appeal is listed on remand by the Hon’ble High Court of Punjab & Haryana, on an appeal by revenue. Hon’ble High Court has passed the following order:
In view of judgment rendered, today, in C.E.A. No. 13 of 2005 (Commissioner of Central Excise, Delhi-Ill v. Machine Montell (I) Ltd. and Anr.), to the extent the penalty and interest levied on the assessee have been set-aside because the duty was deposited before issue of show cause notice and remand the case back to the Tribunal for fresh decision on merits and in accordance with law.
Parties are directed to appear before the Tribunal for further proceedings on 4.9.2006.
2. The issue involved in this case is regarding the amount of the penalty and the interest i.e. payable by the appellant. The learned advocate appearing on behalf of the appellant submits that the non-payment of the duty, for non-inclusion the amount of customs duty, as moulds given to them for manufacturing of components by Maruti Udyog Ltd. was totally unintentional. It was submitted that Maruti Udyog Ltd. themselves paid the duty on the such capital goods in the year 2000 but intimated the appellant only in the year 2002. It is his submission that the payment of the differential duty on the moulds arose due to the reason that Maruti Udyog Ltd. could not complete the export obligation, when they imported these moulds in 1994 under EPCG scheme. It is his submission that there was no intention in as much that they have paid the duty involved immediately after being pointed out by the authorities.
3. Learned DR on the other hand submits that the appellant should have started paying the duty immediately as soon as they were intimated by the Maruti Udyog Ltd. It is his submission that, by non-including this amount in assessable value there was with an intention to evade payment of duty.
4. Considered the submissions made at length by both sides and perused records. It is undisputed that the appellant was using the moulds for manufacturing of component parts. These moulds were supplied by Maruti Udyog Ltd. to the appellant free of cost. It is also undisputed that Maruti Udyog Ltd. imported these moulds under the E.P.C.G. scheme without payment of customs duty/CVD. It is also on record and undisputed by the revenue that when the appellant received the said moulds from Maruti Udyog Ltd., the value of the moulds was included by way of ammortization on the components manufactured. Subsequently when Maruti Udyog Ltd. could not complete the export obligation as undertaken, when the moulds imported under EPCG scheme, they paid the customs duty to the authorities. Maruti Udyog Ltd. Intimated the appellant regarding the payment of customs duty/CVD in the year 2002. Non-inclusion of this customs duty in the costing of components would not indicate that the appellant had intention to remove the components made from the moulds without payment of duty. It is on record that when the appellant used the moulds to manufacture the components of Maruti Udyog Ltd. from 1994, they ammortized the value of moulds, despite the fact that during the relevant period, the issue was being agitated in different legal forums. This would indicate the intention of the appellant to be fair and to be on right side of the law. By not including amount of customs duly which was paid subsequently by Maruti Udyog Ltd., the appellants have not done anything to attract the provisions of Section 11AC and get penalized. There is no mensera which can be attributed for non-inclusion of the duty paid subsequently by Maruti Udyog Ltd. while arriving at the assessable value of the components cleared to Maruti Udyog Ltd.
5. Accordingly, the impugned order to the extent it upholds the penalty imposed on the appellant under Section 11AC is liable to be set aside and I do so. Appeal allowed to the extent of penalty with consequential relief, if any to the appellant.
(Dictated and pronounced in the open court)