ORDER
S.L. Peeran, Member (J)
1. This stay and appeal arise from Order-in-Appeal No. 101/99 (M-II) dated 18.6.99 rejecting the appeal of the appellants for non-compliance of the interim Order passed under Section 35F of the Act, by which the Commissioner had directed the appellants to pre-deposit the entire differential duty confirmed in Order-in-Original No. 63/99 dated 4.1.99 passed by Additional Commissioner of Chennai-I confirmed demand of Rs. 6,10,465 in terms of proviso to Section 11-A and Mandatory Penalty of Rs. 3,91,291 under Section 11A.C. and Rs. 20,000 under Rule 173-Q. The proceedings arose as a result of appellants having realised an amount of Rs. 63,77,776 through Debit note raised on various customers during the period from 1994-95 to 1997-98 which have not been disclosed to the department and that these charges represented cost of preparatory work charges including design, drawing and developing charges in dyes and tools that were used in the manufacture of excisable goods supplied to the various customers.
2. Ld. Counsel submits that as soon as they received the show cause notice they had worked out the exact duty liability that would arise and they had pre-deposited an amount of Rs. 1,24,509 and the balance of Rs. 4,85,956 was not liable to be paid as the total cost of the dies are required to be ammortised during its life period in view of its being used repeatedly. They had produced Engineer’s certificate. However, the Additional Commissioner in Order-in-Original had not accepted this certificate including the duty calculation arrived at by the appellants solely on the ground that they had been worked out by the appellants themselves and the same was not acceptable. The Ld. Commissioner (Appeals) has not taken into consideration these points although the same was brought to his notice including a fresh evidence produced in terms of the Certificate issued by Chartered Engineer. However, the Commissioner has merely observed that this aspect can be looked into at the final stage but they were required to have deposited all the sums as confirmed.
3. Ld. Advocate submits that the relief with regard to Rs. 4,85,956 was legitimate in terms of Board’s circulars and the judgment of the Tribunal in the case of Automotive Axils v. CCE, Bangalore as . He submits that the Commissioner (Appeals) has not taken into consideration this ruling despite recorded it in para 4 of his order. He submits that the Additional Commissioner ought to have granted them waiver for the balance of duty and for penalties also as there was no intention to evade duty in the present case.
4. Ld. DR points out that the Commissioner has given detailed findings even in the impugned order besides having given his findings in the interim order. It is not a dismissal per se for non-compliance, but he has also expressed his opinion how the appellants are not likely to succeed at the final stage. He submits that there is clear violation in the present case and the appellants had not disclosed about the realisation of an amount of Rs. 63,77,776 through Debit note raised on various customers for the said period and that they deposited the duty even as per their calculation after issuing the show cause notice. Therefore, the penalty was leviable in the present case. He submits that the calculations arrived at has not been accepted by the Additional Commissioner and therefore they are required to pre-deposit the entire amounts.
5. On a careful consideration of the submission, we notice that the Commissioner (Appeals) has not taken into consideration the amounts deposited by the appellants and also the explanation given by them with regard to the non-deposit of Rs. 4,85,956 in view of the matter having been covered by the judgment of the Tribunal rendered in the case of Automotive Axils (supra), although Commissioner has noted about this citation. Therefore, the order passed by the Commissioner on this aspect, prima facie is not correct. However, the appellants’ claim for relief for the balance is supported by Chartered Engineer’s Certificate, therefore the appellants have made out a prima facie case on merits of the matter. However, the amounts were deposited by the appellants after the issue of show cause notice, therefore there is a case for imposing penalty. Taking into overall facts and circumstances of the case, we direct the appellants to pre-deposit a further sum of Rs. 1,00,000 (Rupees one lakh only) within two months from the date of receipt of this order. On such deposit, the balance of duty and penalty stand waived and recovery thereof stayed.
6. At this stage, Ld. Counsel submits that as the Commissioner has not decided the case on merits, therefore the matter could be remanded to the Commissioner and that they would report compliance to him and with a direction to him that he would hear the appellants before passing the order.
7. As the appeal is likely to be allowed later by remand, therefore, we take up the appeal and remand the case to the Commissioner (Appeals) with a direction that the pre-deposit ordered now by this order shall be taken as deposit under Section 35-F without insisting on further deposit and, hear the appeal of the appellants and dispose it on merits. Thus the appeals is allowed by remand.
8. E/ST/789/99 & E/1640/99 arises from Order-in-Appeal No. 28/99 (M-II)/D dated 24.8.99 passed by Commissioner (Appeals), Chennai in the departmental appeal filed against the Order-in-Original No. 63/99 passed by Additional Commissioner of Central Excise. That Order-in-Original was also appealed by the party before the Commissioner (Appeals) which was rejected under Section 35-F of the Act which has been dealt with by the Bench in the above order. However, in the Revenue appeal, the appellants had also filed a cross appeal in terms of the Order-in-Original No. 63/99 imposing penalty under Section 11AC for a period subsequent to 28.9.96 and penalty under Section 173Q of the Act. The Commissioner on the cross appeal, held that the penalties for this period is sustainable.
9. Ld. Advocate submits that there is no Revenue appeal with regard to the rejection of its appeal for non-imposition of penalty for the period prior to 28.9.96 under Section 11AC for consideration. However, their appeal had already been now remanded with regard to confirmation of penalty under Order-in-Original by the above-mentioned order. Therefore, the impugned order in this appeal could be modified to the extent that the cross appeal is deemed to have been remanded for further consideration.
10. Heard Ld. DR. On a careful consideration of the submission, we notice that the appellants’ appeal pertaining to imposition of penalty subsequent to 28.9.96 under Section 11AC and Section 173Q besides demands have already been remanded for de novo consideration in terms of the above order. Therefore, the impugned order of other Commissioner in Order-in-Appeal No. 28/99 dated 24.8.99 is modified to the extent that the orders on appellants’ cross appeal is set aside and remanded for de novo consideration in terms of the above order. However, the order of the Commissioner (Appeals) dismissing the Revenue appeal pertaining to non- imposition of penalty for a period prior to 28.9.96 is not interfered with. The stay application is also disposed of accordingly. Ordered accordingly.