ORDER
V.K. Jain, Member (T)
1. Heard Shri S. Sarkar/ Consultant on the Stay application filed by the Appellant. The Consultant submits that the appellant has imported Air-Conditioning equipment which was ultimately used in the SCP machine. They had taken the Modvat credit of CVD duty paid at the time of importation. He also submits that the AC Equipment imported from Germany was brought into the factory for being used in or in relation to manufacture of SCP machine. After taking credit of countervailing duty paid at the time of importation of AC, the AC was taken to the shop floor, inspected, tested in connection and conjunction with the required parameters of the SCP machine and was ultimately cleared as an indispensable component of the SCP machine. The value of the AC was included in the price of the SCP machine as a whole that was charged from the customer and on which the appropriate excise duty was paid. The landed cost of the imported equipment is Rs. 1.8 Crore. When they have cleared the machine from the factory they have declared value as 16 lakhs and paid the Central Excise duty of Rs. 2 lakhs. He submits that since the machine was used as a part of SCP machine they should be given dispensation from duty and penalty.
2. Heard Shri J.R. Madhiam, ld. JDR. He draws our attention to Para 3.2 of the Commissioner (Appeal’s) order where he has observed that the excise duty paid by the assessee on the impugned Air-conditioning unit at the time of clearance thereof should not have been less than the amount of credits availed against the same. The assessee have availed Modvat credit aggregating to Rs. 78,83,307.71 (Rs. 75,07,912.13 as BED and Rs. 3,75,395.58 as SED) against the impugned Air-conditioning unit vide RG 23A Part-II entry Sl. No. 1992 dated 19.1.1992 whereas they had paid duty aggregating to Rs. 2,73,735.00 only (Rs. 2,48,850.00 as BED and Rs. 24,885.00 as SED) under the cover of which the said Air-conditioning unit was cleared by the assessee. Thus the Commissioner has found that the appellant have paid less duty of Rs. 76,09,572.71 at the time of the clearance of the Air-conditioning unit in question.
3. Heard both the sides. After hearing both the sides, we do not find that the assessee has made a case for dispensation of duty and penalty. Prima-facie the case is in the favour of the Revenue. We direct the appellant to pay Rs. 76,09,572 within a period of 8 weeks. After deposit of the above amount, the penalty shall be dispensed with. Compliance to be reported within 10th August 2005.
Dictated and Pronounced in the open Court.