ORDER
S. Kalyanam, Vice President
1. The appeal is against the order of the Collector of Central Excise dated 24-9-92, levying a duty of Rs. 2,07,900/- and a penalty of Rs. 1,000/-, under the Central Excises and Salt Act, 1944. The proceedings were instituted by issue of a show cause notice invoking the proviso in Section 11A of the Act, inter alia alleging that the appellants assembled and manufactured a diesel generator set without payment of duty and the proceedings culminated in the impugned order.
2. Shri Nazeer, the learned Counsel for the appellant submitted that he is not contesting the durability of the goods in question and he was conceeding that the goods were liable to duty and the learned Counsel urged that the demand is barred by limitation. The learned Counsel submitted that the appellants were bona fide under the impression that the goods were not liable to duty and therefore were not accentuated by any intent to evade payment of duty so as to bring the case within the mischief of the proviso to Section 11A of the Act. The learned Counsel referred to Trade Notice 137/90 issued by Madurai Collectorate dt. 5-12-90 and relied on the same in support of his plea of bona fides. The learned Counsel further submitted that the appellants purchased the parts of the diesel engine, namely : 1. Diesel Engine 2. Alternator 3. Base Frame 4. Control Panel 5. Fuel Tank and batteries and got them assembled at their site by the supplier M/s. Powerica Ltd. and therefore in any event the said M/s. Powerica Ltd., should be construed to be the manufacturer of the goods for levy of duty. The learned Counsel placed reliance on the ratio of the ruling of the Tribunal in the case of 1. Thermo Electric Madras Manufacturers v. Collector of Central Excise referred in 1991 (54) E.L.T. 82 (Tribunal) 2. Cosmic Dye Chemical v. Collector of Central Excise, Bombay, referred in 1995 (75) E.L.T 721 (S.C.) 3. Padmini Products v. Collector of Central Excise referred in 1989 (43) E.L.T. 5 (S.C), in support of his plea.
3. Heard Shri Arulswamy, the learned Departmental Representative, who adopted the reasoning in the impugned order.
4. We have considered the submissions made before us. It is not disputed that the goods in question are excisable and as a matter of fact the issue is conceded before us. The only plea canvassed before us was about the unsustainability of the demand on grounds of limitation in the light of appellants bona fides. We nave gone through the notice referred to supra and we do not find any support in regard to the plea of bona fides therein. On going through the agreement of the appellants and the supplier of the parts we note that the parts were assembled at the premises of the supplier by bringing into existence a diesel generator set, by hired labourers. We therefore do not find any merit in the plea that M/s. Powerica Limited is the manufacturer. In the result in consideration of the entire evidence on record we hold that the impugned order is sustainable in law and on facts of this case. In this view of the matter, we confirm duty levied under the impugned order. At this juncture the learned Counsel pleaded that the appellants are eligible to take Modvat credit and prayed for suitable direction. It is open to the appellants to submit before the learned adjudicating authority details of the various components and their duty paid nature as per law and the adjudicating authority shall consider the eligibility of the appellants, to avail Modvat credit. Shri Nazeer, the learned Counsel made a fervent plea that the penalty is not called for in the facts of the case and prayed for setting aside the same. Taking into consideration the facts and circumstances of the case, we set aside the penalty, in the result the appeal is dismissed, with the above modifications.